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Eliciting risk and time preferences under induced mood states

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  • Drichoutis, Andreas C.
  • Nayga, Rodolfo M.

Abstract

We test whether induced mood states have an effect on elicited risk and time preferences in a conventional laboratory experiment. We jointly estimate risk and time preferences and find that both negative and positive mood states increase patience as well as risk aversion but the magnitude of the effects differs between mood states. Results also suggest that risk preferences are affected by whether a cognitively demanding task precedes a risk preference elicitation task but only when a negative mood was induced.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics).

Volume (Year): 45 (2013)
Issue (Month): C ()
Pages: 18-27

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Handle: RePEc:eee:soceco:v:45:y:2013:i:c:p:18-27

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Web page: http://www.elsevier.com/locate/inca/620175

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Keywords: Discount rates; Risk aversion; Lab experiment; Mood; Affect;

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Cited by:
  1. Corazzini, Luca & Filippin, Antonio & Vanin, Paolo, 2014. "Economic Behavior under Alcohol Influence: An Experiment on Time, Risk, and Social Preferences," IZA Discussion Papers 8170, Institute for the Study of Labor (IZA).
  2. Anna Conte & M. Vittoria Levati & Chiara Nardi, 2013. "The Role of Emotions on Risk Preferences: An Experimental Analysis," Jena Economic Research Papers 2013-046, Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics.
  3. Drichoutis, Andreas & Nayga, Rodolfo & Klonaris, Stathis, 2010. "The Effects of Induced Mood on Preference Reversals and Bidding Behavior in Experimental Auction Valuation," MPRA Paper 25597, University Library of Munich, Germany.
  4. Maria De Paola & Francesca Gioia & Vincenzo Scoppa, 2013. "Overconfidence, Omens And Emotions: Results From A Field Experiment," Working Papers 201303, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).

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