Sadder but wiser: The effects of emotional states on ambiguity attitudes

Aurelien Baillon (), Philipp Koellinger and Theresa Treffers

Journal of Economic Psychology, 2016, vol. 53, issue C, 67-82

Abstract: Many important decisions are made without precise information about the probabilities of the outcomes. In such situations, individual ambiguity attitudes influence decision making. The present study identifies emotions as a transient cause of ambiguity attitudes. We conducted two random-assignment, incentive-compatible laboratory experiments, varying subjects’ emotional states. We find that sadness induces choices that are closer to ambiguity-neutral attitudes compared with the joy, fear, and control groups, where decision makers deviate more from payoff-maximizing behavior.

Keywords: Ambiguity attitude; Emotion; Sadness; Experiment (search for similar items in EconPapers)
JEL-codes: D03 D81 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:53:y:2016:i:c:p:67-82

DOI: 10.1016/j.joep.2015.12.008

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