The Effect of Affect on Economic and Strategic Decision Making

Benjamin Hermalin and Alice M. Isen
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Alice M. Isen: Cornell University

No 1136, Econometric Society World Congress 2000 Contributed Papers from Econometric Society

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: 2000-08-01
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Citations: View citations in EconPapers (19)

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Related works:
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)
Working Paper: The Effect of Affect on Economic and Strategic Decision Making (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:ecm:wc2000:1136

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