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The role of psychological and physiological factors in decision making under risk and in a dilemma

  • Jonas Fooken
  • Markus Schaffner

We study the di fference in the result of two diff erent risk elicitation methods by linking estimates of risk attitudes to gender, age, personality traits, a decision in a dilemma situation, and physiological states measured by heart rate variability (HRV). Our results indicate that di fferences between the methods are reflected in a diff erent effect of gender and personality traits. Furthermore, HRV is linked to risk-taking in the experiment for one of the methods, suggesting that emotionally more stressed individuals display more risk aversion. However, we cannot determine if these are signifi cantly related to the diff erence on the results of the two methods. Finally, we find that risk attitudes are not predictive of the ability to decide in a dilemma, but personality traits are. There is also no apparent relationship between the physiological state during the dilemma situation and the ability to make a decision.

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File URL: http://external-apps.qut.edu.au/business/documents/QuBEWorkingPapers/2013/FookenSchaffner_WP13.pdf
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Paper provided by QUT Business School in its series QuBE Working Papers with number 010.

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Date of creation: 18 Apr 2013
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Handle: RePEc:qut:qubewp:wp010
Contact details of provider: Web page: http://www.qut.edu.au/research/research-projects/queensland-behavioural-economics-group-qube

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  1. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
  2. Falk, Armin & Menrath, Ingo & Siegrist, Johannes & Verde, Pablo Emilio, 2011. "Cardiovascular Consequences of Unfair Pay," CEPR Discussion Papers 8463, C.E.P.R. Discussion Papers.
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  7. Dohmen, Thomas J. & Falk, Armin & Huffman, David & Sunde, Uwe & Schupp, Jürgen & Wagner, Gert G., 2011. "Individual risk attitudes: Measurement, determinants, and behavioral consequences," Munich Reprints in Economics 20048, University of Munich, Department of Economics.
  8. John D Hey & Andrea Morone & Ulrich Schmidt, 2007. "Noise and Bias in Eliciting Preferences," Discussion Papers 07/04, Department of Economics, University of York.
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  10. Chetan Dave & Catherine Eckel & Cathleen Johnson & Christian Rojas, 2010. "Eliciting risk preferences: When is simple better?," Journal of Risk and Uncertainty, Springer, vol. 41(3), pages 219-243, December.
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  13. Isaac, R Mark & James, Duncan, 2000. " Just Who Are You Calling Risk Averse?," Journal of Risk and Uncertainty, Springer, vol. 20(2), pages 177-87, March.
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  15. Jordi Brandts & Orsola Garofalo, 2010. "Gender Pairings and Accountability Effect," Labsi Experimental Economics Laboratory University of Siena 034, University of Siena.
  16. Camelia Kuhnen & Brian Knutson, 2005. "The Neural Basis of Financial Risk Taking," Experimental 0509001, EconWPA.
  17. Jeffrey Carpenter & Justin Garcia & J. Lum, 2011. "Dopamine receptor genes predict risk preferences, time preferences, and related economic choices," Journal of Risk and Uncertainty, Springer, vol. 42(3), pages 233-261, June.
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