Risk Preferences and the Role of Emotions

Conte, A., Levati, M.V. and Nardi, C. 2016. Risk Preferences and the Role of Emotions. Economica. 85 (338), pp. 305-328. doi:10.1111/ecca.12209

TitleRisk Preferences and the Role of Emotions
TypeJournal article
AuthorsConte, A., Levati, M.V. and Nardi, C.
Abstract

There is a large volume of research showing that emotions have relevant effects on decision-making. We contribute to this literature by experimentally investigating the impact of four specific emotional states - joviality, sadness, fear, and anger - on risk attitudes. In order to do so, we fit two models of behavior under risk: the Expected Utility model (EU) and the Rank Dependent Expected Utility model (RDEU), assuming several functional forms of the weighting function. Our results indicate that all emotional states mitigate risk aversion. Furthermore, we show that there are some differences across gender and participants' experience in laboratory experiments.

KeywordsDecision under risk, Emotions, Structural models
JournalEconomica
Journal citation85 (338), pp. 305-328
ISSN1468-0335
Year2018
PublisherWiley
Accepted author manuscript
Digital Object Identifier (DOI)doi:10.1111/ecca.12209
Publication dates
Published19 Sep 2016
Published online19 Sep 2016
Published in printApr 2018

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