Risky choices and emotion-based learning

Lucarelli, Caterina; Uberti, Pierpaolo; Brighetti, Gianni; Maggi, Mario

doi:10.1016/j.joep.2015.04.004

Cited by 20 publications

(9 citation statements)

References 39 publications

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“…Right after the emotional script administration, participants were asked to complete an intertemporal choice task (ITC). During the task participants were asked to choose between an immediately fixed amount of money (i.e., GBP 10) and a delayed amount; the latter was parametrically varied across seven amounts (i.e., GBP 15,25,30,40,45,55,and 60) and six waiting times (i.e., 7, 15, 30, 60, 90, and 180 days), thus obtaining 42 different choice pairs. Each choice pair was repeated four times, thus, the task included a total amount of 168 trials, which were randomly distributed across the experimental block [see [23,[89][90][91][92][93] for a similar task design).…”

Section: Tasks and Proceduresmentioning

confidence: 99%

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“I Feel Therefore I Decide”: Effect of Negative Emotions on Temporal Discounting and Probability Discounting

2021

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Temporal and probability discounting are considered two fundamental constructs in economic science, as they are associated with phenomena with major societal impact and a variety of sub-optimal behaviors and clinical conditions. Although it is well known that positive and negative affective states bear important cognitive/behavioral consequences, the effect of emotional experiences on decision-making remains unclear due to the existence of many conflicting results. Inspired by the need to understand if and to what extent the current COVID-19 pandemic has determined changes in our decision-making processes by means of the unusual, prolonged experience of negative feelings, in this study we investigate the effect of anger, fear, sadness, physical and moral disgust on intertemporal and risky choices. Results show that all emotions significantly increase subjects’ preferences for immediate rewards over delayed ones, and for risky rewards over certain ones, in comparison to a “neutral emotion” condition, although the magnitude of the effect differs across emotions. In particular, we observed a more pronounced effect in the case of sadness and moral disgust. These findings contribute to the literature on emotions and decision-making by offering an alternative explanation to the traditional motivational appraisal theories. Specifically, we propose that the increased preference for immediate gratification and risky outcomes serves as a mechanism of self-reward aimed at down-regulating negative feelings and restore the individual’s “emotional balance”.

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Section: Tasks and Proceduresmentioning

confidence: 99%

“…Furthermore, they also contribute to a broader literature on economic decision making—which has traditionally been focused on the emotional arousal associated with intertemporal or risky decisions [ 28 , 29 , 30 ], by showing the effect of prior emotions on decision-making abilities, which are often understudied.…”

Section: Introductionmentioning

confidence: 99%

“I Feel Therefore I Decide”: Effect of Negative Emotions on Temporal Discounting and Probability Discounting

2021

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“…Pompian (2012) asserted that emotional factors (emotional biases) are more difficult to rectify than cognitive errors, because emotional factors originate from impulse or intuition rather than conscious estimates. Furthermore, concerning emotional factors or biases, it may only be feasible to recognise the biases and adapt to it instead of rectifying it (Lucarelli et al, 2015).…”

Section: Literature Reviewmentioning

confidence: 99%

Individual Investor Risk Tolerance From a Behavioural Finance Perspective in Gauteng, South Africa

Bergh-Lindeque

Ferreira-Schenk

Dickason-Koekemoer

2021

IJEFI

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The investment behaviour of individuals is unconsciously influenced by their thoughts, emotions, personal beliefs or past experiences to the degree that even individual investors with considerable knowledge may diverge from logic and reason. These influences, which can be classified as behavioural finance biases, may affect the manner in which risk is perceived and understood. This study aims to establish the relationship between the behavioural finance biases and the risk tolerance of individual investors within Gauteng, South Africa. This study also aims to identify the behavioural finance biases that drive individual investment decisions. Positive, statistically significant relationships were established between the behavioural finance biases and individual investor risk tolerance. Furthermore, the investment decisions of individual investors are driven to a rather great extent by the behavioural finance biases. The significance of these findings will contribute to facilitate the more practical and accurate profiling of individual investors' risk tolerance to ensure the successful implementation of investment strategies not only within South Africa, but also internationally.

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“…Effect of emotions on decision-making can provide better insights in financial decisionmaking and clinical implications for certain addiction disorders and obesity via neuroeconomic approaches (Bechara et al, 2000;Burgdorf and Panksepp, 2006;Causse et al, 2013;Hartley and Somerville, 2015;Lerner et al, 2015;Lucarelli et al, 2015;Martins, 2011;Shiv et al, 2005;Sonuga-Barke and Fairchild, 2012;Takahashi, 2013;Virlics, 2013). Sonuga- Barke and Fairchild (2012) offers to study the mental disorders, which take place due to neurobiological alterations causing disruptive processing of cues of future utility.…”

Section: Clinical Conditionsmentioning

confidence: 99%

What’s in the brain for us: a systematic literature review of neuroeconomics and neurofinance

Srivastava

Sharma

Srivastava

et al. 2020

QRFM

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Purpose Neuroeconomics and neurofinance are emerging as intriguing fields of research, despite sharing ambiguity with the concepts of neuroscience. The relationship among the concepts of economics, finance and neuroscience is not explicitly defined in the past literature, which distorts the use of neuroeconomics and neurofinance approaches in real-world practice for financial decision-making. The purpose of this paper is to consolidate the literature in the field of neuroeconomics and neurofinance to set up the research agenda for the upcoming scholarship in the field. Design/methodology/approach The purpose of this paper is to consolidates the extant literature in the fields of neuroeconomics and neurofinance by conducting an extensive systematic literature review to investigate the current state and define the relationship between economics, finance and neuroscience. Findings This paper identifies and explains the explicit relationship between different sub-fields of neuroscience with neuroeconomics and neurofinance and providing instances for future research studies. Originality/value The exclusive and extensive literature survey in the form of systematic literature review is undertaken for understanding the fields of neuroeconomics and neurofinance and is the key highlight of this paper. Another, interesting fact lies with matching the literature in neuroeconomics and neurofinance with further sub-fields of neuroscience such as neurophysiology, neuroanatomy, molecular neuroscience and cognitive neuroscience.

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Risky choices and emotion-based learning

Cited by 20 publications

References 39 publications

“I Feel Therefore I Decide”: Effect of Negative Emotions on Temporal Discounting and Probability Discounting

“I Feel Therefore I Decide”: Effect of Negative Emotions on Temporal Discounting and Probability Discounting

Individual Investor Risk Tolerance From a Behavioural Finance Perspective in Gauteng, South Africa

What’s in the brain for us: a systematic literature review of neuroeconomics and neurofinance

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