I Feel Like Risking It All!Influence of Emotions on Managerial Risk-Taking

Abstract

We propose that emotions play a mediating role in the relationship between risk perceptions and managerial risk-taking. Using appraisal theory and the evaluative space model, we describe how risk perceptions lead to the experience of emotions. Then, drawing on mood-as-information theory, we explain how discrete emotions influence different levels of managerial risk- taking. In doing so, we focus on anticipatory emotions, as these emotions are associated with future decisions and outcomes, which often form the basis for managerial risk-taking. We categorize anticipatory emotions into positive, negative, and ambivalent emotions and further propose that time delays reintroduce cognitive processing which interacts with these different categories of anticipatory emotions to impact managerial risk-taking. We develop a process model that outlines how anticipatory emotions bridge the link from risk perceptions to managerial risk-taking and how temporal aspects of the process introduce a secondary layer of cognition. We also decompose these ‘anticipatory emotions’ in our model and build a framework that helps elaborate the interactions among types of emotions and patterns of cognitive processing associated with time delay. Our model and corresponding framework have important implications for both management theory and practice.