Risk Aversion and Emotions

Y. Nguyen, C.N. Noussair

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Abstract

Abstract: We consider the relationship between emotions and decision-making under risk. Specifically, we examine the emotional correlates of risk-averse decisions. In our experiment, individuals' facial expressions are monitored with facereading software, as they are presented with risky lotteries. We then correlate these facial expressions with subsequent decisions in risky choice tasks. We find that the valence of one’s emotional state is negatively correlated, and the strength of a number of emotions: fear, happiness, anger, and surprise, is positively correlated, with risk-averse decisions.
Original languageEnglish
Place of PublicationTilburg
PublisherEconomics
Number of pages21
Volume2013-041
Publication statusPublished - 2013

Publication series

NameCentER Discussion Paper
Volume2013-041

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Keywords

  • Risk aversion
  • emotions
  • facereading
  • fear

Cite this

Nguyen, Y., & Noussair, C. N. (2013). Risk Aversion and Emotions. (CentER Discussion Paper; Vol. 2013-041). Tilburg: Economics.