Risk and rationality: The effects of mood and decision rules on probability weighting

Fehr-Duda, Helga; Epper, Thomas; Bruhin, Adrian; Schubert, Renate

doi:10.1016/j.jebo.2010.12.004

Cited by 109 publications

(71 citation statements)

References 40 publications

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“…As individuals are pretty different, the relation between mood and risk-taking is influenced by several factors as gender (Fehr-Duda et al, 2011), age (Chou, Lee, & Ho, 2007), genetic heritage (Ebstein et al, 1996;Kuhnen & Chiao, 2009;Roe et al, 2009;Ronai et al, 2001), functioning of the endocrine system (Coates & Herbert, 2008;Eisenegger, Haushofer, & Fehr, 2011) and personality traits (Berkowitz et al, 2000;Chuang & Chang, 2007). Hence, the impact of changes of mood may have heterogeneous effects on the risk-taking attitude.…”

Section: Photoperiod Mood and Risk Aversionmentioning

confidence: 99%

Seasonal affective disorder and the Romanian stock market

Murgea

2016

Economic Research-Ekonomska Istraživanja

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Section: Photoperiod Mood and Risk Aversionmentioning

confidence: 99%

Seasonal affective disorder and the Romanian stock market

Murgea

2016

Economic Research-Ekonomska Istraživanja

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“…50 This pattern is consistent 4 8 There is a growing body of literature in economics on the e¤ects of emotions (e.g., fear, sadness, and anger) on decision making under risk, especially in laboratory settings in which …lms or stories are often used to induce emotions. For example, see Raghunathan and Pham (1999), Fehr-Duda et al (2011), Kugler et al (2012, Tre¤ers et al (2012), Drichoutis and Nayga (2013), Campos-Vazquez and Cuilty (2014), and Conte et al (2014.…”

Section: A Potential Mechanism: Emotional Responsesmentioning

confidence: 99%

Do Risk Preferences Change? Evidence from Panel Data before and after the Great East Japan Earthquake

Hanaoka

Shigeoka

Watanabe³

2015

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We investigate whether individuals' risk preferences change after experiencing a natural disaster, specifically, the 2011 Great East Japan Earthquake. Exploiting the panels of nationally representative surveys on risk preferences, we find that men who experienced greater intensity of the Earthquake became more risk tolerant after the Earthquake. Furthermore, these men gamble more, which is consistent with the direction of changes in risk preferences. We find no such pattern for women. Finally, the effects on men's risk preferences are persistent even five years after the Earthquake at almost the same magnitude as those shortly after the Earthquake.

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“…A number of experimental studies indicate that individuals who exhibit a positive mood when making a risky choice tend to be willing to undertake more risks (see, inter alia, Chou, Lee, and Ho, 2007;Fehr-Duda, Epper, Bruhin, and Schubert, 2011).…”

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confidence: 99%

Trust, happiness, and households’ financial decisions

Delis

Mylonidis

2015

Journal of Financial Stability

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A recent line of research highlights trust as an important element guiding the decision of households to invest into risky financial assets and insurance products. This paper contributes to this literature by identifying happiness as another key driver of the same decision. Using detailed survey data from a sample of Dutch households, we show that the impact of happiness on households' financial decisions works in the opposite direction and is more economically important compared to trust. Specifically, happiness leads to a lower probability of investing into risky financial assets and having insurance, while trust has the usual positive effect found in the literature. Furthermore, the negative effect of happiness on the ownership of risky financial assets is about 6% higher compared to the positive equivalent of trust. Similarly, the negative effect of happiness on the ownership of insurance is 3% higher than the positive effect of trust.

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Risk and rationality: The effects of mood and decision rules on probability weighting

Cited by 109 publications

References 40 publications

Seasonal affective disorder and the Romanian stock market

Seasonal affective disorder and the Romanian stock market

Do Risk Preferences Change? Evidence from Panel Data before and after the Great East Japan Earthquake

Trust, happiness, and households’ financial decisions

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