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Special Section: Experiments on Learning, Methods, and Voting

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  • Yen Nguyen
  • Charles N. Noussair

Abstract

We consider the relationship between emotions and decision-making under risk. Specifically, we examine the emotional correlates of risk-averse decisions. In our experiment, individuals' facial expressions are monitored with face reading software, as they are presented with risky lotteries. We then correlate these facial expressions with subsequent decisions in risky choice tasks. We find that a more positive emotional state is positively correlated with greater risk taking. The strength of a number of emotions, including fear, happiness, anger and surprise, is positively correlated with risk aversion.

Suggested Citation

  • Yen Nguyen & Charles N. Noussair, 2014. "Special Section: Experiments on Learning, Methods, and Voting," Pacific Economic Review, Wiley Blackwell, vol. 19(3), pages 296-312, August.
    • Handle: RePEc:bla:pacecr:v:19:y:2014:i:3:p:296-312
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    File URL: http://hdl.handle.net/10.1111/1468-0106.12067
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    References listed on IDEAS

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    1. Coget, Jean-Francois & Haag, Christophe & Gibson, Donald E., 2011. "Anger and fear in decision-making: The case of film directors on set," European Management Journal, Elsevier, vol. 29(6), pages 476-490.
    2. Mónica C. Capra, 2004. "Mood-Driven Behavior in Strategic Interactions," American Economic Review, American Economic Association, vol. 94(2), pages 367-372, May.
    3. Nygren, Thomas E. & Isen, Alice M. & Taylor, Pamela J. & Dulin, Jessica, 1996. "The Influence of Positive Affect on the Decision Rule in Risk Situations: Focus on Outcome (and Especially Avoidance of Loss) Rather Than Probability," Organizational Behavior and Human Decision Processes, Elsevier, vol. 66(1), pages 59-72, April.
    4. Charles A. Holt & Susan K. Laury, 2002. "Risk Aversion and Incentive Effects," American Economic Review, American Economic Association, vol. 92(5), pages 1644-1655, December.
    5. Mano, Haim, 1992. "Judgments under distress: Assessing the role of unpleasantness and arousal in judgment formation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 52(2), pages 216-245, July.
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    Cited by:

    1. Lenka Fiala & Charles N. Noussair, 2017. "Charitable Giving, Emotions, And The Default Effect," Economic Inquiry, Western Economic Association International, vol. 55(4), pages 1792-1812, October.

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