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Risk Aversion and Emotions in DoND

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  • Mehmet Burak Kahyaoglu
  • Ozgur Ican

Abstract

Contrary to the traditional economic school of thought, emotions known to have a huge effect on cognitive processes leading to decisions. In this context, it can be observed that some television shows provide a very appropriate test-bed for examining decision-making behavior under risk. This study attempts to estimate the degree of Arrow-Pratt RRA for a group of decision-makers composed of 101 ¡°Deal or No Deal¡± TV show contestants. For further analysis, a ¡°face-reading¡± software was employed in order to identify emotions experienced by contestants at various parts of the game, and the influence of such emotions on the risk aversion behavior. Our findings suggest that emotions have an influence on the decisions of the contestants.

Suggested Citation

  • Mehmet Burak Kahyaoglu & Ozgur Ican, 2017. "Risk Aversion and Emotions in DoND," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(1), pages 32-46, January.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:1:p:32-46
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    References listed on IDEAS

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    Cited by:

    1. Kassas, Bachir & Palma, Marco A. & Porter, Maria, 2022. "Happy to take some risk: Estimating the effect of induced emotions on risk preferences," Journal of Economic Psychology, Elsevier, vol. 91(C).

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    More about this item

    Keywords

    decision making under risk; risk aversion; emotion recognition;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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