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Incidental emotions and risk-taking: An experimental analysis

Annarita Colasante (), Matteo M. Marini and Alberto Russo
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Annarita Colasante: LEE & Economics Department, Universitat Jaume I, Castellón-Spain

No 2018/13, Working Papers from Economics Department, Universitat Jaume I, Castellón (Spain)

Abstract: In this paper we conduct a laboratory experiment in order to investigate the effect of incidental sadness and happiness on risky decision making. An emotion induction procedure is the treatment variable of a between-subjects design where two sessions aim at eliciting either sadness or happiness, respectively. Two further groups are characterized by neutral conditions and serve as baseline. After a manipulation check verifies the validity of the induction procedure, we use a multiple price list à la Holt and Laury (2002) to elicit individual risk preferences in the context of a lottery-choice task. The analysis reveals that both sadness and happiness promote greater risk aversion with respect to neutral conditions, a result which might be moderated by the risk elicitation task. Therefore, as compelling explanation we propose the theory of ego depletion, whereby regulating emotions so as to subsequently process information consumes a limited self-control resource, which is needed to take risks as well.

Keywords: laboratory experiment; emotions; preference elicitation; risk aversion; ego depletion (search for similar items in EconPapers)
JEL-codes: C91 D81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-hap, nep-neu and nep-upt
Date: 2018
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Working Paper: Incidental emotions and risk-taking: An experimental analysis (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:jau:wpaper:2018/13

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