In his biography of Elon Musk, historian Walter Isaacson describes a game of Texas Hold ‘Em poker in which Musk went all in — on every hand.
“Isaacson uses the anecdote to show that Elon Musk is a badass because he takes risks. But for anyone without the means to just buy more chips, going all in every time is a terrible strategy! Nobody should play like that,” says SFI External Professor Paul Smaldino, a cognitive scientist at the University of California, Merced.
The anecdote bears relevance to Smaldino’s recent paper, in which he and his colleagues propose a model for how a person’s resources and environment incentivize learning strategies that influence their personal proclivity toward risk. The model, published in Psychological Review, makes predictions that mirror many aspects of modern society, such as how wealth inequality leads vulnerable communities to rely on traditions to manage risk more so than wealthier communities, which can make them slow to adapt when conditions change. This can help explain political polarization and why cautious attitudes persist for generations following shocks like recessions and wars.
“We’re basically linking short time scales — within a person’s lifetime — and generational time scales to gain an overall view of why people vary in their disposition toward risk,” says University of California, Merced Ph.D. student Alejandro Pérez Velilla, who is the first author on the study.
The model mimics a person’s journey from childhood, when their families and mentors protect them from the consequences of their risks, into adulthood, when their risks come with greater ramifications. Over time, they gain personal experience and also learn from the experiences of their peers and elders. And over generations, the ways people learn about risk become better adapted to their environments.
The model predicts that a “wealth buffer,” or a cushion created by having ample resources, allows people to feel comfortable taking risks with the potential for rewards, as well as losses. Without a wealth buffer, people become cautious because they can’t afford to lose anything. In the United States, “politicians have exploited the fact that people in less affluent areas are sensitive to risks and have targeted them with rhetoric about how risky the world feels because of how it’s changing,” Smaldino says. That could explain why political polarization tends to mirror economic inequality.
When wealth buffers are ample, individuals tend not only to take more risks, but also to learn in more exploratory and experimental ways. But when wealth buffers are low and the stakes are high, that increases the degree to which risk tolerance is passed down from one generation to the next, so a distaste for risk — and therefore change — is likely to persist long-term. That could create an obstacle to implementing new policies, even when they’re designed to improve conditions.
That logic could explain why some cultures are more risk-averse than others, and how that impacts their resilience to rapid change. “We think all these things are entangled,” Smaldino says.
Read the paper “The development of risk behaviors and their cultural transmission” in Psychological Review (December 2025). DOI: 10.1037/rev0000599