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On the priming of risk preferences: The role of fear and general affect

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  • Alempaki, Despoina
  • Starmer, Chris
  • Tufano, Fabio

Abstract

Priming is an established tool in psychology for investigating aspects of cognitive processes underlying decision making and is increasingly applied in economics. We report a systematic attempt to test the reproducibility and generalisability of priming effects on risk attitudes in a more diverse population than professionals and students, when priming using either a positive or a negative experience. We further test fear as the causal mechanism underlying countercyclical risk aversion. Across a series of experiments with a total sample of over 1900 participants, we are unable to find any systematic effect of priming on risk preferences. Moreover, our results challenge the role of fear as the mechanism underlying countercyclical risk aversion; we find evidence of an impact of general affect such that the better our participants feel, the more risk they take.

Suggested Citation

  • Alempaki, Despoina & Starmer, Chris & Tufano, Fabio, 2019. "On the priming of risk preferences: The role of fear and general affect," Journal of Economic Psychology, Elsevier, vol. 75(PA).
    • Handle: RePEc:eee:joepsy:v:75:y:2019:i:pa:s0167487018302940
    DOI: 10.1016/j.joep.2018.12.011
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    6. Offer Moshe Shapir & Michal H. Shapir‐Tidhar & Zeev Shtudiner, 2023. "Priming effect across framing, culture, and gender: Evidence from the academia," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(7), pages 3758-3768, October.
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    11. Andersson, Lina, 2022. "Fear and Economic Behavior," Working Papers in Economics 819, University of Gothenburg, Department of Economics.
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    14. Weber, Martin & Kieren, Pascal & Mueller-Dethard, Jan, 2020. "Why so Negative? Belief Formation and Risk Taking in Boom and Bust Markets," CEPR Discussion Papers 14647, Centre for Economic Policy Research.
    15. Rahmani, Djamel & Loureiro, Maria & Escobar, Cristina & Gil, José M., 2021. "How Emotions Affect Choices: The Case of Wine," 2021 Conference, August 17-31, 2021, Virtual 314943, International Association of Agricultural Economists.
    16. Mujcic, Redzo & Powdthavee, Nattavudh, 2025. "How do humans respond to large realized losses?," Journal of Economic Psychology, Elsevier, vol. 107(C).
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    20. Essl, Andrea & Hauser, David & von Bieberstein, Frauke, 2024. "Let's think about the future: The effect of positive and negative future primes on pro-environmental behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 109(C).
    21. Chen, Daniel L., 2024. "Priming ideology I: Why do presidential elections affect U.S. judges," European Economic Review, Elsevier, vol. 169(C).
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    24. Cordes, Henning & Nolte, Sven & Schneider, Judith C., 2023. "Dynamics of stock market developments, financial behavior, and emotions," Journal of Banking & Finance, Elsevier, vol. 154(C).

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    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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