Negative Tail Events, Emotions and Risk Taking

Brice Corgnet, Camille Cornand and Nobuyuki Hanaki

The Economic Journal, 2024, vol. 134, issue 658, 538-578

Abstract: We design a novel experiment to assess investors’ behavioural and physiological reactions to negative tail events. Investors who observed, without suffering from, tail events decreased their bids, whereas investors suffering tail losses increased them. However, the increase in bids after tail losses was not observed for those who exhibited no emotional arousal. This suggests that emotions are key in explaining prospect theory prediction of risk seeking in the loss domain.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1093/ej/uead080 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Negative Tail Events, Emotions and Risk Taking (2024)
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:oup:econjl:v:134:y:2024:i:658:p:538-578.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Economic Journal is currently edited by Francesco Lippi

More articles in The Economic Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press () and ().