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Arousal and economic decision making

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  • Jahedi, Salar
  • Deck, Cary
  • Ariely, Dan

Abstract

Previous experiments have found that subjecting participants to cognitive load leads to poorer decision making, consistent with dual-system models of behavior. Rather than taxing the cognitive system, this paper reports the results of an experiment that takes a complementary approach: arousing the emotional system. The results indicate that exposure to arousing visual stimuli as compared to neutral images has a negligible impact on performance in arithmetic tasks, impatience, risk taking in the domain of losses, and snack choice although we find that arousal modestly increases risk-taking in the gains domain and increases susceptibility to anchoring effects. We find the effect of arousal on decision making to be smaller and less consistent then the effect of increased cognitive load for the same tasks.

Suggested Citation

  • Jahedi, Salar & Deck, Cary & Ariely, Dan, 2017. "Arousal and economic decision making," Journal of Economic Behavior & Organization, Elsevier, vol. 134(C), pages 165-189.
  • Handle: RePEc:eee:jeborg:v:134:y:2017:i:c:p:165-189
    DOI: 10.1016/j.jebo.2016.10.008
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    References listed on IDEAS

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    1. Catherine C. Eckel & Philip J. Grossman, 2002. "Sex Differences and Statistical Stereotyping in Attitudes Toward Financial Risk," Monash Economics Working Papers archive-03, Monash University, Department of Economics.
    2. Dreber, Anna & Gerdes, Christer & Gränsmark, Patrik, 2013. "Beauty queens and battling knights: Risk taking and attractiveness in chess," Journal of Economic Behavior & Organization, Elsevier, vol. 90(C), pages 1-18.
    3. Bram Van den Bergh & Siegfried Dewitte & Luk Warlop, 2008. "Bikinis Instigate Generalized Impatience in Intertemporal Choice," Journal of Consumer Research, Oxford University Press, vol. 35(1), pages 85-97, January.
    4. Eckel, Catherine C. & Grossman, Philip J., 2008. "Men, Women and Risk Aversion: Experimental Evidence," Handbook of Experimental Economics Results, Elsevier.
    5. Ned Augenblick & Muriel Niederle & Charles Sprenger, 2013. "Working Over Time: Dynamic Inconsistency in Real Effort Tasks," NBER Working Papers 18734, National Bureau of Economic Research, Inc.
    6. Knutson, Brian & Wimmer, G. Elliott & Kuhnen, Camelia & Winkielman, Piotr, 2008. "Nucleus accumbens activation mediates the influence of reward cues on financial risk-taking," MPRA Paper 8013, University Library of Munich, Germany.
    7. Cary Deck & Harris Schlesinger, 2014. "Consistency of Higher Order Risk Preferences," Econometrica, Econometric Society, vol. 82, pages 1913-1943, September.
    8. Shiv, Baba & Fedorikhin, Alexander, 1999. " Heart and Mind in Conflict: The Interplay of Affect and Cognition in Consumer Decision Making," Journal of Consumer Research, Oxford University Press, vol. 26(3), pages 278-292, December.
    9. Deck, Cary & Jahedi, Salar, 2015. "The effect of cognitive load on economic decision making: A survey and new experiments," European Economic Review, Elsevier, vol. 78(C), pages 97-119.
    10. McAlvanah, Patrick, 2009. "Are people more risk-taking in the presence of the opposite sex?," Journal of Economic Psychology, Elsevier, vol. 30(2), pages 136-146, April.
    11. David L. Dickinson & Sean P.A. Drummond & Jeff Dyche, 2014. "Voluntary sleep choice and its effects on Bayesian decisions: A study of two samples of college students," Working Papers 14-11, Department of Economics, Appalachian State University.
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    Cited by:

    1. Bonnier, Evelina & Dreber, Anna & Hederos, Karin & Sandberg, Anna, 2018. "Undressed for Success? The Effects of Half-Naked Women on Economic Behavior," Working Paper Series 6/2018, Stockholm University, Swedish Institute for Social Research.
    2. repec:eee:jeborg:v:137:y:2017:i:c:p:72-89 is not listed on IDEAS
    3. Kuhn, Michael A. & Kuhn, Peter & Villeval, Marie Claire, 2017. "Decision-environment effects on intertemporal financial choices: How relevant are resource-depletion models?," Journal of Economic Behavior & Organization, Elsevier, vol. 137(C), pages 72-89.

    More about this item

    Keywords

    Dual system; Sexual arousal; Impatience; Risk taking; Behavioral economics;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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