Effects of Stress on Economic Decision-Making: Evidence from Laboratory Experiments

Liam Delaney, Günther Fink and Colm Harmon

No 8060, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The ways in which preferences respond to the varying stress of economic environments is a key question for behavioral economics and public policy. We conducted a laboratory experiment to investigate the effects of stress on financial decision making among individuals aged 50 and older. Using the cold pressor task as a physiological stressor, and a series of intelligence tests as cognitive stressors, we find that stress increases subjective discounting rates, has no effect on the degree of risk-aversion, and substantially lowers the effort individuals make to learn about financial decisions.

Keywords: risk aversion; discounting; financial decisions; stress; learning (search for similar items in EconPapers)
JEL-codes: D91 I31 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2014-03
New Economics Papers: this item is included in nep-age, nep-cbe, nep-exp, nep-ger, nep-neu and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Related works:
Working Paper: Effects of stress on economic decision-making: Evidence from laboratory experiments (2014)
Working Paper: Effects of stress on economic decision-making: Evidence from laboratory experiments (2014)
Working Paper: Effects Of Stress On Economic Decision-Making: Evidence From Laboratory Experiments (2014)
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