Impact of Induced Moods, Sensation Seeking, and Emotional Contagion on Economic Decisions Under Risk.

Kirill Efimov,Anna Shestakova,Ksenia Panidi,Dzerassa Kadieva,Ioannis Ntoumanis,Vladimir Kosonogov,Iiro P Jääskeläinen,Olga Kuskova,Vasily Klucharev,Nina Kazanina

doi:10.3389/fpsyg.2021.796016

Abstract

In addition to probabilities of monetary gains and losses, personality traits, socio-economic factors, and specific contexts such as emotions and framing influence financial risk taking. Here, we investigated the effects of joyful, neutral, and sad mood states on participants’ risk-taking behaviour in a simple task with safe and risky options. We also analysed the effect of framing on risk taking. In different trials, a safe option was framed in terms of either financial gains or losses. Moreover, we investigated the effects of emotional contagion and sensation-seeking personality traits on risk taking in this task. We did not observe a significant effect of induced moods on risk taking. Sad mood resulted in a slight non-significant trend of risk aversion compared to a neutral mood. Our results partially replicate previous findings regarding the presence of the framing effect. As a novel finding, we observed that participants with a low emotional contagion score demonstrated increased risk aversion during a sad mood and a similar trend at the edge of significance was present in high sensation seekers. Overall, our results highlight the importance of taking into account personality traits of experimental participants in financial risk-taking studies.

Highlights

In economic tasks, humans are not payoff maximisers who would strictly behave according to expected monetary outcomes (Kahneman and Tversky, 1979; Opaluch and Segerson, 1989; Henrich et al, 2005)
We investigated whether personality traits, such as sensation seeking (SS) and contagion, interact with the effect of mood induction and framing on risk taking
Our findings demonstrate that joyful mood, induced by validated stimuli, did not affect economic decision making contrary to previous studies (Schulreich et al, 2014; Stanton et al, 2014; Pastwa and Imbir, 2019; Hareli et al, 2021), while induced sad mood resulted in a slight non-significant trend of risk aversion

Summary

Introduction

Humans are not payoff maximisers who would strictly behave according to expected monetary outcomes (Kahneman and Tversky, 1979; Opaluch and Segerson, 1989; Henrich et al, 2005). Financial risk taking is influenced by personality traits (Llewellyn, 2008), the individuals’ mood (Kusev et al, 2017), how the decisions are framed (Tversky and Kahneman, 1981; Steiger and Kühberger, 2018), as well as other demographic or socio-economic factors and specific contexts (Zuckerman and Kuhlman, 2000; Henrich et al, 2005; Eckel and Grossman, 2008). This makes human factors in financial risk taking an important area of investigation. Sadness is traditionally considered to decrease risk taking (Yuen and Lee, 2003; Stanton et al, 2014; Hareli et al, 2021)

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