The Role of Emotions on Risk Preferences: An Experimental Analysis

Anna Conte, Maria Levati and Chiara Nardi

No 2013-046, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: In the last decades, there has been a large volume of research showing that emotions do have relevant effects on decision-making. We contribute to this literature by experimentally investigating the impact of four specific emotional states - joviality, sadness, fear, and anger - on risk attitudes. In order to do so, we fit two models of behaviour under risk: the Expected Utility model (EU) and the Rank Dependent Expected Utility model (RDEU), assuming several functional forms of the weighting function. Our results indicate that all emotional states instigate risk-seeking behaviour. Furthermore, we show that there are some differences across gender and across participants' experience in lab experiments.

Keywords: Risk aversion; Emotions; Structural models (search for similar items in EconPapers)
JEL-codes: C91 D00 D81 (search for similar items in EconPapers)
Date: 2013-10-29
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-neu and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Risk preferences and the role of emotions (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2013-046

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