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Negative shocks predict change in cognitive function and preferences: Assessing the negative affect and stress hypothesis

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  • Bogliacino, Francesco

    (Universidad Nacional de Colombia)

  • codagnone, cristiano
  • Montealegre, Felipe

    (Universidad Nacional de Colombia)

  • Folkvord, F.
  • Gómez, Camilo Ernesto

    (Centro de Investigaciones para el Desarrollo)

  • Charris, Rafael Alberto

    (Universidad Nacional de Colombia)

  • Liva, Giovanni
  • Villanueva, Francisco Lupiañez
  • Veltri, Giuseppe Alessandro

    (University of Trento)

Abstract

In the context of the current COVID-19 pandemic, households throughout the world have to cope with negative shocks, either because of the disease or the various mitigation strategies that have caused massive unemployment and financial insecurity. Previous research has shown that negative shocks impair cognitive function and change risk, time and social preferences. In this study, we analyze the results of a longitudinal multi-country survey conducted in Italy (N=1,652), Spain (N=1,660) and the United Kingdom (N=1,578). We measure cognitive function using the Cognitive Reflection Test and preferences traits using an experimentally validated set of questions to assess the differences between people exposed to a shock compared to the rest of the sample. We measure four possible types of shocks: labor market shock, health shock, occurrence of stressful events, and mental health shock. Additionally, we randomly assign participants to groups with either a recall of negative events (more specifically, a mild reinforcement of stress or of fear/anxiety), or to a control group (to recall neutral or joyful memories), in order to assess whether or not stress and negative emotions drive a change in preferences. Results show that people affected by shocks performed worse in terms of cognitive functioning, are more risk loving, and are more prone to punish others (negative reciprocity). Data do not support the hypotheses that the result is driven by stress or by negative emotions.

Suggested Citation

  • Bogliacino, Francesco & codagnone, cristiano & Montealegre, Felipe & Folkvord, F. & Gómez, Camilo Ernesto & Charris, Rafael Alberto & Liva, Giovanni & Villanueva, Francisco Lupiañez & Veltri, Giuseppe, 2020. "Negative shocks predict change in cognitive function and preferences: Assessing the negative affect and stress hypothesis," SocArXiv qhkf9_v1, Center for Open Science.
  • Handle: RePEc:osf:socarx:qhkf9_v1
    DOI: 10.31219/osf.io/qhkf9_v1
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    References listed on IDEAS

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    1. Smith, Vernon L, 1982. "Microeconomic Systems as an Experimental Science," American Economic Review, American Economic Association, vol. 72(5), pages 923-955, December.
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