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Risk preferences and the role of emotions

Listed author(s):
  • Anna Conte

    ()

    (University of Westminster)

  • Maria Vittoria Levati

    ()

    (Department of Economics (University of Verona))

  • Chiara Nardi

    ()

    (Department of Economics (University of Verona))

In the last decades, there has been a large volume of research showing that emotions do have relevant effects on decision-making. We contribute to this literature by experimentally investigating the impact of four specific emotional states - joviality, sadness, fear, and anger - on risk attitudes. In order to do so, we fit two models of behaviour under risk: the Expected Utility model (EU) and the Rank Dependent Expected Utility model (RDEU), assuming several functional forms of the weighting function. Our results indicate that all emotional states instigate risk-seeking behaviour. Furthermore, we show that there are some differences across gender and across participants' experience in lab experiments.

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Paper provided by University of Verona, Department of Economics in its series Working Papers with number 10/2014.

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Date of creation: Jun 2014
Handle: RePEc:ver:wpaper:10/2014
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  18. Treffers, T. & Koellinger, Ph.D. & Picot, A.O., 2012. "In the Mood for Risk? A Random-Assignment Experiment Addressing the Effects of Moods on Risk Preferences," ERIM Report Series Research in Management ERS-2012-014-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
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