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Eliciting risk and time preferences under induced mood states

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  • 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.

Suggested Citation

  • Drichoutis, Andreas C. & Nayga, Rodolfo M., 2013. "Eliciting risk and time preferences under induced mood states," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 45(C), pages 18-27.
    • Handle: RePEc:eee:soceco:v:45:y:2013:i:c:p:18-27
    DOI: 10.1016/j.socec.2013.04.008
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    More about this item

    Keywords

    Discount rates; Risk aversion; Lab experiment; Mood; Affect;
    All these keywords.

    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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