Big stakes make people more risk averse, challenging traditional theories.
Risk tolerance increases as the amount at stake gets larger. This is not just because of how much you stand to gain or lose. It's mainly because most people become more cautious about high gains as the stakes rise. This change in how we view probabilities affects our willingness to take risks. Interestingly, this pattern doesn't hold true for losses. This challenges traditional theories about how we make decisions when faced with risks.