Emotion, decision and risk: Betting on gambles vs. betting on people

Abstract As an effort to resolve the conflicting evidences in the emotional influences on human decision making, the present study investigated the effects of positive and negative emotions induced by a false-feedback test on risky decision making in a gambling task. According to the measurements of PAD Emotion Scale (Mehrabian, 1995) both positive and negative emotions were successfully induced.

Cognitive Affective & Behavioral Neuroscience, 2011

Emotions and their psychophysiological correlates are thought to play an important role in decision-making under risk. We used a novel gambling task to measure psychophysiological responses during selection of explicitly presented risky options and feedback processing. Active-choice trials, in which the participant had to select the size of bet, were compared to fixed-bet, no-choice trials. We further tested how the chances of winning and bet size affected choice behavior and psychophysiological arousal. Individual differences in impulsive and risk-taking traits were assessed. The behavioral results showed sensitivity to the choice requirement and to the chances of winning: Participants were faster to make a response on no-choice trials and when the chances of winning were high. In active-choice trials, electrodermal activity (EDA) increased with bet size during both selection and processing of losses. Cardiac responses were sensitive to choice uncertainty: Stronger selection-related heart rate (HR) decelerations were observed in trials with lower chances of winning, particularly on active-choice trials. Finally, betting behavior and psychophysiological responsiveness were moderately correlated with self-reported impulsivity-related traits. In conclusion, we demonstrate that psychophysiological arousal covaries with risk-sensitive decision-making outside of a learning context. Our results further highlight the differential sensitivities of EDA and HR to psychological features of the decision scenario.

Emotion, 2010

It is well established that emotion plays a key role in human social and economic decision making. The recent literature on emotion regulation (ER), however, highlights that humans typically make efforts to control emotion experiences. This leaves open the possibility that decision effects previously attributed to acute emotion may be a consequence of acute ER strategies such as cognitive reappraisal and expressive suppression. In Study 1, we manipulated ER of laboratory-induced fear and disgust, and found that the cognitive reappraisal of these negative emotions promotes risky decisions (reduces risk aversion) in the Balloon Analogue Risk Task and is associated with increased performance in the prehunch/hunch period of the Iowa Gambling Task. In Study 2, we found that naturally occurring negative emotions also increase risk aversion in Balloon Analogue Risk Task, but the incidental use of cognitive reappraisal of emotions impedes this effect. We offer evidence that the increased effectiveness of cognitive reappraisal in reducing the experience of emotions underlies its beneficial effects on decision making.

2003

There is some evidence indicating a relationship between variations in affect and risk aversion: under certain conditions the behavior observed suggests less risk aversion the more positive the affective state. The research presented in this paper examined how variations in everyday affective states influenced risk taking behavior in the laboratory using simple gambling tasks and then sought to corroborate findings in the laboratory using data on real world financial decision making. We observed a significant and positive relationship between affect and risky behavior in the laboratory that we replicated using structural equation modeling on real world financial data. It is argued that cognitive theories of affect and decision making might have real economic consequences.

2011

■ Cognitive strategies typically involved in regulating negative emotions have recently been shown to also be effective with positive emotions associated with monetary rewards. However, it is less clear how these strategies influence behavior, such as preferences expressed during decision-making under risk, and the underlying neural circuitry. That is, can the effective use of emotion regulation strategies during presentation of a reward-conditioned stimulus influence decision-making under risk and neural structures involved in reward processing such as the striatum? To investigate this question, we asked participants to engage in imagery-focused regulation strategies during the presentation of a cue that preceded a financial decision-making phase. During the decision phase, participants then made a choice between a risky and a safe monetary lottery. Participants who successfully used cognitive regulation, as assessed by subjective ratings about perceived success and facility in implementation of strategies, made fewer risky choices in comparison with trials where decisions were made in the absence of cognitive regulation. Additionally, BOLD responses in the striatum were attenuated during decisionmaking as a function of successful emotion regulation. These findings suggest that exerting cognitive control over emotional responses can modulate neural responses associated with reward processing (e.g., striatum) and promote more goal-directed decisionmaking (e.g., less risky choices), illustrating the potential importance of cognitive strategies in curbing risk-seeking behaviors before they become maladaptive (e.g., substance abuse). ■

The aim of this study was to assess the role of specific emotions on risk perception providing a more stringent experimental test of the Appraisal Tendencies Framework (ATF). Consistent with expectations, angry and happy participants made more optimistic risk estimates than participants who were made sad. As hypothesized by ATF, happiness and anger also led people to somewhat higher certainty appraisals than sadness. However, this change in perception did not mediate the impact of emotions on risk estimates. Taken together, our results provide the evidence for causal role of specific emotions in risk perception and contribute to literature showing that the effects of emotion on judgment are not solely due to the valence of the experienced emotion. However, they also suggest that the processes underlying emotion effects remain in need for further specifications.

Schmalenbach Business Review, 2016

Recent discussions in decision sciences and economics stress the potential impact of affect on decision outcomes. In this study, we conducted incentivecompatible laboratory experiments (N = 253) to investigate whether affect causes temporary fluctuations in risk preferences. In particular, we employed film clips to induce participants into joyful, fearful and sad affective states and subsequently elicited risk preferences by asking the participants to make choices among different lotteries. The financial consequences of the lottery choices varied randomly among the fixed-, low-, and high-stakes treatment groups. We find only weak evidence that affective states influence risk preferences. In particular, we find some evidence that sadness leads to risk aversion, but we find no effects for joy and fear. Our findings question recent claims in the literature that the relationship between affect and risk preferences is strong and unambiguous.

2014

There is a large volume of research showing that emotions do have relevant effects on decisionmaking. We contribute to this literature by experimentally investigating the impact of four specific emotional states – joviality, sadness, fear, and anger – on risk attitudes. In order to do so, we fit two models of behavior under risk: the Expected Utility model (EU) and the Rank Dependent Expected Utility model (RDEU), assuming several functional forms of the weighting function. Our results indicate that all emotional states instigate risk-seeking behavior. Furthermore, we show that there are some differences across gender and participants’ experience in laboratory experiments.

2007

We examine the effects of human affect (pleasant or unpleasant feelings) and past outcomes (gains and losses) on risk-taking in a stock investment simulation in which 101 stock investors rated their feelings while simultaneously making investment decisions for twenty consecutive business days. We find that affect shifts individual's risk behavior: individuals experiencing pleasant feelings engaged in risk-taking after significant gains, while individuals experiencing unpleasant feelings avoided risk-taking after significant losses. Only after accounting for the joint effects of affect and past outcomes, do we find stronger relationships between past outcomes and risk taking.