Eliciting risk and time preferences under induced mood states

Drichoutis, Andreas and Nayga, Rodolfo (2010): Eliciting risk and time preferences under induced mood states.

Abstract

We test whether induced mood states have an effect on elicited risk and time preferences. Risk preferences between subjects in the control, positive mood, and negative mood treatments are neither economically nor statistically significant. However, we find that subjects induced into a positive mood exhibit higher discount rates and that subjects under negative mood do not differ significantly with a control group. Results also suggest that irrespective of mood state, introducing a cognitively demanding task before risk preference elicitation increases risk aversion and females are less risk averse when in all-female sessions than when in mixed-gender sessions.

• Item Type: MPRA Paper
• Language: English
• 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

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