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Sex & the City. Are financial decisions driven by emotions?

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  • Gabbi, Giampaolo
  • Zanotti, Giovanna

Abstract

Although the role of irrationality in trading choices has been extensively discussed in the literature, individual incidental emotions have been neglected. We investigated emotional explanatory factors and trading choices in a sample of non-professional agents who managed a virtual financial positions pretending to be traders. Using a series of daily surveys over a five-week period as well as introductive inventory surveys, we constructed measures of core affect and emotions and correlated these with subjects’ financial choices. Our purpose is to test if the decision to buy or sell financial assets is affected by the emotional state of individuals, considering also gender clusters. A focus is on incidental emotions, detecting how positive emotions due to sexual activity may alter financial trading choices. Our findings suggest that agents incorrectly attribute their good mood to positive economic perspectives rather than positive emotions.

Suggested Citation

  • Gabbi, Giampaolo & Zanotti, Giovanna, 2019. "Sex & the City. Are financial decisions driven by emotions?," Journal of Behavioral and Experimental Finance, Elsevier, vol. 21(C), pages 50-57.
    • Handle: RePEc:eee:beexfi:v:21:y:2019:i:c:p:50-57
    DOI: 10.1016/j.jbef.2018.10.005
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    References listed on IDEAS

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    Cited by:

    1. Niculaescu, Corina E. & Sangiorgi, Ivan & Bell, Adrian R., 2023. "Does personal experience with COVID-19 impact investment decisions? Evidence from a survey of US retail investors," International Review of Financial Analysis, Elsevier, vol. 88(C).
    2. Zavadskas, Edmundas Kazimieras & Kaklauskas, Arturas & Bausys, Romualdas & Naumcik, Andrej & Ubarte, Ieva, 2021. "Integrated hedonic-utilitarian valuation of the built environment by neutrosophic INVAR method," Land Use Policy, Elsevier, vol. 101(C).
    3. Anderson, Irina & Thoma, Volker, 2021. "The edge of reason: A thematic analysis of how professional financial traders understand analytical decision making," European Management Journal, Elsevier, vol. 39(2), pages 304-314.

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    More about this item

    Keywords

    Financial expectations; Behavioural finance; Sex and gender; Trading; Short selling; Core affect;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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