Positive Mood, Risk Attitudes, and Investment Decisions: Field Evidence from Comedy Movie Attendance in the U.S.

Lepori, Gabriele M.

doi:10.2139/ssrn.1690476

Cited by 14 publications

(7 citation statements)

References 125 publications

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“…It is well documented in the literature that the behaviour of individuals differs depending on their mood or state of emotion. Some studies (e.g., Kliger & Levy, 2003;Lepori, 2010) have also shown that statistically significant relationships exist between affect and risk attitudes in both laboratory and field conditions. However, these findings are not unanimous in the direction of the effect or have favoured contradicting theories.…”

Section: Introductionmentioning

confidence: 99%

“…Second, many of the previous studies have focused on examining the influence of affect on risk preferences with only a few such as Lukoseviciute (2011) examining the link between affect and time preferences. Third, several studies have artificially induced moods (e.g., with music or movies in Chung et al, 2016; Lepori, 2010) with only a handful relying on induced mood arising from real-world circumstances. To address these gaps, this paper investigates whether a statistically significant relationship exists between affect and risk and time preferences after controlling for the effect of selected phenomena.…”

Section: Introductionmentioning

confidence: 99%

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Examining the Effect of Short-Term Affect on Farmers’ Risk and Time Preferences in Financial Decision-Making

Begho

Ambali

2021

Studies in Microeconomics

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Farmers regularly make intertemporal decisions under risk or uncertainty. To improve how farmers behave when faced with decisions that have financial consequences, there is a need for a deeper understanding of farmers’ risk and time preferences. While the relationship between individual components of affect and risk preferences is well documented, the same cannot be said for holistic measures of affect on one hand, and for affect and time preferences on the other hand. The data analysed in this paper is the 2014–2015 Indonesian Family Life Survey Wave 5. The survey included experimental measures designed to elicit both risk and time preferences from the same subjects. We analysed the data using limited dependent variable regression models. Our findings strengthen what is known about the affect infusion model. With increased pleasant affect, farmers’ willingness to take risks increases significantly. The results also suggest that pleasant affect is associated with increased odds that farmers will choose future rewards in the long horizon but had no statistically significant effect on the short horizon. The practical implications are that an experience of pleasant affect before decision-making may cause the decision-maker (DM) to perceive a prospect as having high benefits and low risks. Pleasant affect may also induce lower sensitivity towards losses and play the role of a buffer which reduces the immediate negative impact of information that otherwise would prevent the DM from focusing on the long-term. JEL Classifications: C93, D81, D91

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Examining the Effect of Short-Term Affect on Farmers’ Risk and Time Preferences in Financial Decision-Making

Begho

Ambali

2021

Studies in Microeconomics

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“…Another line of research to suggest that investors are not likely to adhere to the passive asset allocation strategy suggested by MPT is the impact of emotions on financial decisions. Hirshleifer and Shumway (2003) have shown that market returns are higher on sunny days and Lepori (2011) provides evidence that comedy movie attendance leads to lower market returns. Both of these findings suggest mood and emotions affect financial decisions.…”

Section: Introductionmentioning

confidence: 99%

The effect of setting goals and emotions on asset allocation decisions

Sundali

Stone²,

Guerrero³

2012

Managerial Finance

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Purpose -The purpose of this paper is to conduct a controlled experiment to examine the effect of goal setting and affect framed feedback on repeated asset allocation investment decisions. Design/methodology/approach -The design of the experiment is a 2 £ 2 between subject design. Subjects allocated monies among four investments for 20 periods. One manipulation varied whether subjects received performance feedback in the form of a happy or sad face, while another manipulation varied whether subjects set a financial goal for themselves and received goal attainment performance feedback. Findings -The main findings include: subjects initially allocate assets in a manner roughly consistent with their stated preference for risk; prior year asset performance leads subjects to make significant changes in portfolio asset allocation in a manner consistent with beliefs of positive autocorrelation in asset returns; and the addition of happy or sad faces to performance feedback information leads to even greater changes in asset allocation. Originality/value -Using ideas from the theory on the self-regulation of behavior and the role of affect in decision making, the authors develop an original framework to account for the results.

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“…Psychologists as their discipline requires, differentiate concepts of "affect", "mood" and "emotion" from one another but in behavioural finance they are used instead of one another(Lepori, 2010). In this paper, they will be used as in behavioural finance.2 Because of this, supposing that "investors are rational at the decision making" is a basic but irrational assumption of economic and financial theories (e.g.…”

mentioning

confidence: 99%

Role of Negative Mood on Turkish Stock Market: Suicides

Bozkurt¹

2016

Journal of Yaşar University

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Positive Mood, Risk Attitudes, and Investment Decisions: Field Evidence from Comedy Movie Attendance in the U.S.

Cited by 14 publications

References 125 publications

Examining the Effect of Short-Term Affect on Farmers’ Risk and Time Preferences in Financial Decision-Making

Examining the Effect of Short-Term Affect on Farmers’ Risk and Time Preferences in Financial Decision-Making

The effect of setting goals and emotions on asset allocation decisions

Role of Negative Mood on Turkish Stock Market: Suicides

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