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Eliciting risk and time preferences under induced mood states

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Listed author(s):
  • 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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File URL: http://www.sciencedirect.com/science/article/pii/S1053535713000693
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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
DOI: 10.1016/j.socec.2013.04.008
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620175

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

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Find related papers by JEL classification:
  • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
  • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
  • D00 - Microeconomics - - General - - - General

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Cited by:

  1. Lepori, Gabriele M., 2015. "Investor mood and demand for stocks: Evidence from popular TV series finales," Journal of Economic Psychology, Elsevier, vol. 48(C), pages 33-47.
  2. L. Corazzini & A. Filippin & P. Vanin, 2014. "Economic Behavior under Alcohol Influence: An Experiment on Time, Risk, and Social Preferences," Working Papers wp944, Dipartimento Scienze Economiche, Universita' di Bologna.
  3. 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.
  4. Delis, Manthos D. & Mylonidis, Nikolaos, 2015. "Trust, happiness, and households’ financial decisions," Journal of Financial Stability, Elsevier, vol. 20(C), pages 82-92.
  5. Chie Hanaoka & Hitoshi Shigeoka & Yasutora Watanabe, 2015. "Do Risk Preferences Change? Evidence from Panel Data before and after the Great East Japan Earthquake," NBER Working Papers 21400, National Bureau of Economic Research, Inc.
  6. Colasante, Annarita & Marini, Matteo M. & Russo, Alberto, 2017. "Incidental emotions and risk-taking: An experimental analysis," MPRA Paper 76992, University Library of Munich, Germany.
  7. De Paola, Maria & Gioia, Francesca & Scoppa, Vincenzo, 2014. "Overconfidence, omens and gender heterogeneity: Results from a field experiment," Journal of Economic Psychology, Elsevier, vol. 45(C), pages 237-252.
  8. 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 "Giovanni Anania" - DESF.
  9. 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.

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