Drichoutis, Andreas and Nayga, Rodolfo (2010): Eliciting risk and time preferences under induced mood states.
This is the latest version of this item.
Download (193kB) | Preview
We test whether induced mood states have an effect on elicited risk and time preferences in a conventional laboratory experiment. We jointly estimate risk and time preferences and find that subjects induced into a negative mood exhibit economically significant higher risk aversion than those in the control treatment. Those in the positive mood treatment exhibit even higher risk aversion. We find no direct effect of mood states on discount rates. Results also suggest that risk preferences are affected by whether a cognitively demanding task precedes a risk preference elicitation task or whether subjects were placed in a gender-specific session rather than a mixed-gender session.
|Item Type:||MPRA Paper|
|Original Title:||Eliciting risk and time preferences under induced mood states|
|Keywords:||discount rates; risk aversion; lab experiment; mood; affect|
|Subjects:||D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty
D - Microeconomics > D0 - General > D00 - General
C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior
|Depositing User:||Andreas Drichoutis|
|Date Deposited:||29. Feb 2012 15:52|
|Last Modified:||11. Feb 2013 16:37|
Allais, M. (1953). Le comportement de l'homme rationnel devant le risque: Critique des postulats et axiomes de l'ecole Americaine. Econometrica, 21(4), 503-546.
Andersen, S., Harrison, G. W., Lau, M., & Rutstrom, E. E. (2011). Multiattribute Utility Theory, Intertemporal Utility and Correlation Aversion. Center for the Economic Analysis of Risk, WP 2011-04.
Andersen, S., Harrison, G. W., Lau, M. I., & Rutstrom, E. E. (2008). Eliciting risk and time preferences. Econometrica, 76(3), 583-618.
Andersen, S., Harrison, G. W., Lau, M. I., & Rutström, E. E. (2007). Valuation using multiple price list formats. Applied Economics, 39(6), 675-682.
Andersen, S., Harrison, G. W., Lau, M. I., & Rutström, E. E. (2010). Behavioral econometrics for psychologists. Journal of Economic Psychology, 31(4), 553-576. doi: 10.1016/j.joep.2010.03.017
Andersen, S., Harrison, G. W., Lau, M. I., & Rutström, E. E. (2010). Discounting behavior: A reconsideration. working paper.
Barone, M. J., Miniard, P. W., & Romeo, J. B. (2000). The influence of positive mood on brand extension evaluations. The Journal of Consumer Research, 26(4), 386-400.
Benhabib, J., & Bisin, A. (2005). Modeling internal commitment mechanisms and self-control: A neuroeconomics approach to consumption-saving decisions. [doi: DOI: 10.1016/j.geb.2004.10.004] . Games and Economic Behavior, 52(2), 460-492.
Bernheim, B. D., & Rangel, A. (2004). Addiction and cue-triggered decision processes. American Economic Review, 94(5), 1558-1590. doi: doi: 10.1257/0002828043052222
Bono, J. E., & Ilies, R. (2006). Charisma, positive emotions and mood contagion. The Leadership Quarterly, 17(4), 317-334.
Booth, A. L., & Nolen, P. J. (2009a). Choosing to compete: How different are girls and boys? CEPR Discussion Paper No. 7214, March.
Booth, A. L., & Nolen, P. J. (2009b). Gender differences in risk behaviour: Does nurture matter? The Economic Journal, 122(February), F56–F78.
Bruni, L., & Sugden, R. (2007). The road not taken: How psychology was removed from economics, and how it might be brought back. The Economic Journal, 117(January), 1-28.
Camerer, C. F., Loewenstein, G., & Rabin, M. (2004). Advances in behavioral economics New Jersey: Princeton University Press.
Capra, C. M. (2004). Mood-driven behavior in strategic interactions. The American Economic Review, 94(2), 367-372.
Capra, C. M., Lanier, K., & Meer, S. (2010). The effects of induced mood on bidding in random nth-price auctions. Journal of Economic Behavior & Organization (In press). doi: http://dx.doi.org/10.1016/j.jebo.2010.04.002
Chou, K.-L., Lee, T. M. C., & Ho, A. H. Y. (2007). Does mood state change risk taking tendency in older adults? [10.1037/0882-79188.8.131.520]. Psychology and Aging, 22(2), 310-318.
Coller, M., & Williams, M. (1999). Eliciting individual discount rates. Experimental Economics, 2(2), 107-127.
Curtis, M. B. (2006). Are audit-related ethical decisions dependent upon mood? Journal of Business Ethics, 68(2), 191-209.
de Ruyter, K., & Bloemer, J. (1998). Customer loyalty in extended service settings. The interaction between satisfaction, value attainment and positive mood. International Journal of Service Industry Management, 10(3), 320-336.
Elster, J. (1998). Emotions and economic theory. Journal of Economic Literature, 36(1), 47-74.
Fehr-Duda, H., Epper, T., Bruhin, A., & Schubert, R. (2011). Risk and rationality: The effects of mood and decision rules on probability weighting. Journal of Economic Behavior & Organization, 78(1-2), 14-24. doi: 10.1016/j.jebo.2010.12.004
Fischbacher, U. (2007). z-Tree: Zurich Toolbox for Ready-made Economic Experiments. Experimental Economics, 10(2), 171-178.
Forgas, J. P. (1995). Mood and judgment: The affect infusion model (AIM). Psychological Bulletin, 117(1), 39-66.
Fudenberg, D., & Levine, D. K. (2009). Self control, risk aversion, and the Allais Paradox. Working paper.
Gneezy, U., Leonard, K. L., & List, J. A. (2009). Gender differences in competition: Evidence from a matrilineal and a patriarchal society. [x]. Econometrica, 77(5), 1637-1664.
Grable, J. E., & Roszkowski, M. J. (2008). The influence of mood on the willingness to take financial risks. Journal of Risk Research, 11(7), 905-923.
Harrison, G. W. (2008). Maximum likelihood estimation of utility functions using Stata. Working Paper 06-12, Department of Economics, College of Business Administration, University of Central Florida.
Harrison, G. W., Johnson, E., McInnes, M. M., & Rutström, E. E. (2005). Risk aversion and incentive effects: Comment. The American Economic Review, 95(3), 897-901.
Harrison, G. W., Lau, M. I., & Rutström, E. E. (2009). Risk attitudes, randomization to treatment, and self-selection into experiments. Journal of Economic Behavior & Organization, 70(3), 498-507.
Harrison, G. W., Lau, M. I., & Williams, M. B. (2002). Estimating individual discount rates in Denmark: A field experiment. [10.1257/000282802762024674]. American Economic Review, 92(5), 1606-1617.
Harrison, G. W., & List, J. A. (2004). Field experiments. Journal of Economic Literature, 42(4), 1009-1055.
Harrison, G. W., & Rutstrom, E. E. (2008). Risk aversion in the laboratory. In J. C. Cox & G. W. Harrison (Eds.), Research in Experimental Economics Vol 12: Risk Aversion in Experiments (Vol. 12, pp. 41-196). Bingley, UK: Emerald Group Publishing Limited.
Hill, R. P., & Ward, J. C. (1989). Mood manipulation in marketing research: An examination of potential confounding effects. Journal of Marketing Research, 26(1), 97-104.
Hills, A. M., Hill, S., Mamone, N., & Dickerson, M. (2001). Induced mood and persistence at gaming. Addiction, 96(11), 1629-1638.
Hockey, G. R. J., Maule, A. J., Clough, P. J., & Bdzola, L. (2000). Effects of negative mood states on risk in everyday decision making Cognition & Emotion, 14(6), 823-855.
Holt, C. A., & Laury, S. K. (2002). Risk aversion and incentive effects. The American Economic Review, 92(5), 1644-1655.
Ifcher, J., & Zarghamee, H. (2010). Happiness and time preference: The effect of positive affect in a random-assignment experiment. American Economic Review (forthcoming).
Isen, A. M., & Geva, N. (1987). The influence of positive affect on acceptable level of risk: The person with a large canoe has a large worry. Organizational Behavior and Human Decision Processes, 39(145-154).
Isen, A. M., & Patrick, R. (1983). The effect of positive feelings on risk-taking: When the chips are down. Organizational Behavior and Human Performance, 31, 194-202.
Izard, C. E. (1991). The psychology of emotions. New York: Plenum Press.
Johnson, E. J., & Tversky, A. (1983). Affect, generalization, and the perception of risk. Journal of Personality and Social Psychology, 45(1), 20-31.
Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica 47, 263-291.
Kim, M. Y., & Kanfer, R. (2009). The joint influence of mood and a cognitively demanding task on risk-taking. [10.1007/s11031-009-9147-z]. Motivation and Emotion, 33(4), 362-372.
Kirchsteiger, G., Rigotti, L., & Rustichini, A. (2006). Your morals might be your moods. [doi: DOI: 10.1016/j.jebo.2004.07.004]. Journal of Economic Behavior & Organization, 59(2), 155-172.
Kugler, T., Connolly, T., & Ordóñez, L. D. (2010). Emotion, decision, and risk: Betting on gambles versus betting on people. Journal of Behavioral Decision Making (forthcoming). doi: 10.1002/bdm.724
Larsen, R. J. (2000). Toward a science of mood regulation. Psychological Inquiry, 11(3), 129-141.
McLeish, K. N., & Oxoby, R. J. (2007). Gender, affect and intertemporal consistency: An experimental approach. IZA Discussion Paper No. 2663.
Niederle, M., & Vesterlund, L. (2007). Do women shy away from competition? Do men compete too much? The Quarterly Journal of Economics, 122(3), 1067-1101.
Pelled, L. H., & Xin, K. R. (1999). Down and out: An investigation of the relationship between mood and employee withdrawal behavior. Journal of Management, 25(7), 875-895.
Pocheptsova, A., & Novemsky, N. (2010). When do incidental mood effects last? Lay beliefs versus actual effects. The Journal of Consumer Research, 36(6), 992-1001.
Pugh, D. S. (2001). Service with a smile: Emotional contagion in the service encounter. Academy of Management Journal, 44(5), 1018-1027.
Pyone, J. S., & Isen, A. M. (2011). Positive affect, intertemporal choice, and levels of thinking: Increasing consumers' willingness to wait. Journal of Marketing Research, 48(3), 532-543. doi: 10.1509/jmkr.48.3.532
Quiggin, J. (1982). A theory of anticipated utility. Journal of Economic Behavior & Organization, 3(4), 323-343. doi: 10.1016/0167-2681(82)90008-7
Saha, A. (1993). Expo-power utility: A flexible form for absolute and relative risk aversion. American Journal of Agricultural Economics, 75(4), 905-913.
Swinyard, W. R. (1993). The effects of mood, involvement, and quality of store experience on shopping intentions. The Journal of Consumer Research, 20(2), 271-280.
Swinyard, W. R. (2003). The effects of salesperson mood, shopper behavior, and store type on customer service. Journal of Retailing and Consumer Services, 10(6), 323-333.
Tversky, A., & Kahneman, D. (1992). Advances in prospect theory: Cumulative representation of uncertainty. Journal of Risk and Uncertainty, 5(297-323). doi: 10.1007/BF00122574
Walser, S., & Eckel, C. (2010). The effect of mood on risk and trust preferences: An experimental study. Working paper Department of Economics, University of Texas at Dallas.
Watson, D. (1988). The vicissitudes of mood measurement: Effects of varying descriptors, time frames, and response formats on measures of Positive and Negative Affect. Journal of Personality and Social Psychology, 55(1), 128-141.
Watson, D., & Vaidya, J. (2003). Mood measurement: Current status and future directions. In J. A. Schinka & W. F. Velicer (Eds.), Handbook of Psychology, Volume 2: Research Methods in Psychology (pp. 351-375). New york: Wiley.
Williams, S., Zainuba, M., & Jackson, R. (2003). Affective influences on risk perceptions and risk intention. Journal of Managerial Psychology, 18(2), 126-137.
Yuen, K. S. L., & Lee, T. M. C. (2003). Could mood state affect risk-taking decisions? Journal of Affective Disorders, 75(1), 11-18.
Available Versions of this Item
Eliciting risk and time preferences under induced mood states. (deposited 27. Aug 2011 12:59)
Eliciting risk and time preferences under induced mood states. (deposited 29. Oct 2011 17:42)
- Eliciting risk and time preferences under induced mood states. (deposited 29. Feb 2012 15:52) [Currently Displayed]
- Eliciting risk and time preferences under induced mood states. (deposited 29. Oct 2011 17:42)