The Effect of Affect on Economic and Strategic Decision Making

Benjamin E. Hermalin and Alice M. Isen.
Authors registered in the RePEc Author Service: Benjamin Hermalin

No E99-270, Economics Working Papers from University of California at Berkeley

Abstract: The standard economic model of decision making assumes a decision maker makes her choices to maximize her utility or happiness. Her current emotional state is not explicitly considered. Yet there is a large psychological literature that shows that current emotional state, in particular positive affect, has a significant effect on decision making. This paper offers a way to incorporate this insight from psychology into economic modeling. Moreover, this paper shows that this simple insight can parsimoniously explain a wide variety of behaviors.

Date: 1999-12-01
New Economics Papers: this item is included in nep-cdm, nep-exp, nep-ind and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.haas.berkeley.edu/groups/iber/wps/econ/E99-270.pdf main text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.haas.berkeley.edu/groups/iber/wps/econ/E99-270.pdf [301 Moved Permanently]--> http://haas.berkeley.edu/groups/iber/wps/econ/E99-270.pdf)

Related works:
Working Paper: The Effect of Affect on Economic and Strategic Decision Making (2000)
Working Paper: The Effect of Affect on Economic and Strategic Decision Making (2000)
Working Paper: The Effect of Affect and Economic and Strategic Decision Making (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucb:calbwp:e99-270

Ordering information: This working paper can be ordered from
IBER, F502 Haas Building, University of California, Berkeley CA 94720-1922

Access Statistics for this paper

More papers in Economics Working Papers from University of California at Berkeley University of California at Berkeley, Berkeley, CA USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().