I've just spent some time reading a very enjoyable and interesting paper (PDF, and thanks to Tyler Cowen at Marginal Revolution) from Shane Frederick at MIT's Sloan management school. He has a simple test that seems rather well correlated with a person's appetite for financial risk-taking and their ability to postpone a smaller immediate reward for a larger one in the future.

Frederick's test consists of what are basically trick questions. They're the sort of things that have an immediately obvious intuitive answer, but one which is (unfortunately wrong). These take a bit of mathematical and logical thinking to work out, but nothing advanced. You do have to be able to not just run with the first answer that comes in your head, though. (Not doing so, of course, requires you to be the sort of person who double-checks things, preferably from a different angle, before committing to them). Cognitive ability and patience have been linked before, both in the popular imagination and in a few studies that Frederick cites.

Update: there's a possibly confounding variable that I forgot to mention: perhaps the better students taking this test had already been exposed to these types of questions before as brain teasers. I know that this was the case with me; I recognized them as classic forms of not-the-obvious-answer questions. This gets back to the question of how much a person's test-taking performance is due to practice in taking tests. . .

He gave this test to a number of different groups, and his table of results is worth the download right there (I'll give you a hint - if you didn't know already, MIT is quite different from the University of Toledo). But as it turns out, the people who score very low and the ones who score very high on this sort of quiz also answer quite a few other questions differently. Frederick was checking their responses to choices such as "Would you rather have $100 now or $140 next year?" and "Would you rather have $100 for sure or a 75% chance at $200?". What he found was the high-scoring group heavily prefers to wait for the larger payout in the first question, and heavily prefers to take the risk in the second one. (The whole paper details a range of these, of varying levels of risk balanced with immediate or long-term attractiveness).

Another effect that's been noted in past studies is that people are much more willing to take a risk to avoid a loss, rather than taking an equivalent risk when there's a prospect of an equivalent gain. Update: Although this was what I had in my head, I originally had this backwards; thanks to Shane Frederick for pointing this out! His low-scoring cohort is hugely biased toward this mode of thought, Frederick finds, but the effect actually disappears in the high-scoring group. (He also confirms the results of several other studies, including the finding that women tend to be much more risk-averse than men in such situations).

I couldn't help thinking that his high-scoring group is also the group that makes the best scientists. Think about it: not going with the first thing that pops into your head, but always stopping to ask yourself if it's true or not. Checking it in different ways to see if you get the same answer. These are the habits of mind that a good researcher has - and I can tell you from personal experience that some of the least competent chemists and biologists I've known come from the opposite category.

You know the ones - the folks who get an n-of-one number in an assay and go running around telling everyone that they've found something wonderful, only to have to eat the whole thing (again) when it doesn't repeat. The set-up-the-reaction-first (and look in the library later) folks who have to pour even more reactions into the waste can than the rest of us do. Professor Frederick should run his next survey in the science hallways - perhaps we could separate the sheep from the goats.