This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

The Effect of Affect on Economic and Strategic Decision Making

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Benjamin E. Hermalin and Alice M. Isen.

Additional information is available for the following registered author(s):

Abstract

The standard economic model of decision making assumes a decision maker makes her choices to maximize her utility or happiness. Her current emotional state is not explicitly considered. Yet there is a large psychological literature that shows that current emotional state, in particular positive affect, has a significant effect on decision making. This paper offers a way to incorporate this insight from psychology into economic modeling. Moreover, this paper shows that this simple insight can parsimoniously explain a wide variety of behaviors.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.haas.berkeley.edu/groups/iber/wps/econ/E99-270.pdf
Our checks indicate that this address may not be valid because: 404 Not Found (http://www.haas.berkeley.edu/groups/iber/wps/econ/E99-270.pdf [302 Found]--> http://iber.berkeley.edu/wps/econ/E99-270.pdf). If this is indeed the case, please notify (Christopher F. Baum)
File Format: application/pdf
File Function: main text
Download Restriction: no

Publisher Info
Paper provided by University of California at Berkeley in its series Economics Working Papers with number E99-270.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: 01 Dec 1999
Date of revision:
Handle: RePEc:ucb:calbwp:e99-270

Contact details of provider:
Postal: University of California at Berkeley, Berkeley, CA USA
Phone: 510-642-0822
Fax: 510-642-6615
Email:
Web page: http://www.haas.berkeley.edu/groups/iber/wps/econwp.html
More information through EDIRC

Order Information:
Postal: IBER, F502 Haas Building, University of California, Berkeley CA 94720-1922
Email:

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Other versions of this item:

This paper has been announced in the following NEP Reports: References listed on IDEAS
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.:
  1. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November. [Downloadable!] (restricted)
  2. Matthew Rabin, 1998. "Psychology and Economics," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 11-46, March. [Downloadable!] (restricted)
  3. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June. [Downloadable!] (restricted)
  4. Paul M. Romer, 2000. "Thinking and Feeling," American Economic Review, American Economic Association, vol. 90(2), pages 439-443, May. [Downloadable!] (restricted)
  5. Benhabib, Jess & Day, Richard H, 1981. "Rational Choice and Erratic Behaviour," Review of Economic Studies, Blackwell Publishing, vol. 48(3), pages 459-71, July. [Downloadable!] (restricted)
  6. Kaufman, Bruce E., 1999. "Emotional arousal as a source of bounded rationality," Journal of Economic Behavior & Organization, Elsevier, vol. 38(2), pages 135-144, February. [Downloadable!] (restricted)
  7. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March. [Downloadable!] (restricted)
  8. W. Bentley MacLeod, 1996. "Decision, Contract, and Emotion: Some Economics for a Complex and Confusing World," Canadian Journal of Economics, Canadian Economics Association, vol. 29(4), pages 788-810, November. [Downloadable!] (restricted)
    Other versions:
  9. David Laibson, 2001. "A Cue-Theory Of Consumption," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 81-119, February. [Downloadable!] (restricted)
  10. Shira B. Lewin, 1996. "Economics and Psychology: Lessons for Our Own Day from the Early Twentieth Century," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1293-1323, September. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, 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.)

  1. Kirchsteiger, G. & Rigotti, L. & Rustichini, A., 2000. "Your morals are your moods," Discussion Paper 122, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
  2. James, Harvey S., Jr. & Chymis, Athanasios G., 2004. "Are Happy People Ethical People? Evidence From North America And Europe," Working Papers 26034, University of Missouri Columbia, Department of Agricultural Economics. [Downloadable!]
  3. De Figueiredo, John M. & De Figueiredo, Rui J. P. Jr., 2002. "Managerial Decision-Making in Non-Market Environments: A Survey Experiment," Working papers 4246-02, Massachusetts Institute of Technology (MIT), Sloan School of Management. [Downloadable!]
  4. Stephan Meier & Alois Stutzer, . "Is Volunteering Rewarding in Itself?," IEW - Working Papers iewwp180, Institute for Empirical Research in Economics - IEW. [Downloadable!]
    Other versions:
  5. Hakan Berument & M. Eray Yücel & Onur Ince, 2005. "Success in Soccer and Economic Performance : Evidence from Besiktas-Turkey," Departmental Working Papers 0507, Bilkent University, Department of Economics. [Downloadable!]
    Other versions:
  6. Bruno Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  7. Lucy F. Ackert & Bryan K. Church & Richard Deaves, 2003. "Emotion and financial markets," Economic Review, Federal Reserve Bank of Atlanta, issue Q2, pages 33-41. [Downloadable!]
  8. Lucy F. Ackert & Jorge Martinez-Vazquez & Mark Rider, 2004. "Tax policy design in the presence of social preferences: some experimental evidence," Working Paper 2004-33, Federal Reserve Bank of Atlanta. [Downloadable!]
    Other versions:
Statistics
Access and download statistics

Did you know? IDEAS was launched in September 1997.

This page was last updated on 2009-10-31.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.