Risk Aversion and Emotions
AbstractAbstract: We consider the relationship between emotions and decision-making under risk. Specifically, we examine the emotional correlates of risk-averse decisions. In our experiment, individuals' facial expressions are monitored with facereading software, as they are presented with risky lotteries. We then correlate these facial expressions with subsequent decisions in risky choice tasks. We find that the valence of one’s emotional state is negatively correlated, and the strength of a number of emotions: fear, happiness, anger, and surprise, is positively correlated, with risk-averse decisions.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2013-041.
Date of creation: 2013
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Risk aversion; emotions; facereading; fear;
Find related papers by JEL classification:
- C9 - Mathematical and Quantitative Methods - - Design of Experiments
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-08-05 (All new papers)
- NEP-CBE-2013-08-05 (Cognitive & Behavioural Economics)
- NEP-EXP-2013-08-05 (Experimental Economics)
- NEP-NEU-2013-08-05 (Neuroeconomics)
- NEP-UPT-2013-08-05 (Utility Models & Prospect Theory)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mónica C. Capra, 2004. "Mood-Driven Behavior in Strategic Interactions," American Economic Review, American Economic Association, vol. 94(2), pages 367-372, May.
- Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
- Catherine C. Eckel & Philip J. Grossman, 2008.
"Sex and Risk: Experimental Evidence,"
Development Research Unit Working Paper Series
archive-09, Monash University, Department of Economics.
- Eckel, Catherine C. & Grossman, Philip J., 2008. "Men, Women and Risk Aversion: Experimental Evidence," Handbook of Experimental Economics Results, Elsevier.
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