Daniel Bennett (Monash)
The puzzle of emotion and risk: investigating the effects of within-task emotional fluctuations on risk preferences
A substantial body of previous research has examined the links between human affect (positive/negative emotional states) and risk-taking behaviour. However, different studies have reported seemingly contradictory results concerning the direction of the association between affect and risk taking. Positive affect has been linked to an increase in risk-taking behaviour in some studies, whereas other studies have reported that positive affect can reduce risk-taking behaviour. Likewise, across studies negative affect has been associated with both increased risk tolerance and increased risk aversion. In this study, we investigated this question in the context of an online behavioural task involving repeated decisions from description interspersed with embedded self-report probes of self-reported emotional states. Across two experiments (N = 330 and 509 respectively), we found evidence for a significant negative association between self-reported emotional valence and risk-taking behaviours. That is, more negative emotional states were associated with increased risk tolerance, and more positive emotional states were associated with increased risk aversion. This association was driven by within-participant fluctuations, and not by between-participants differences in average emotional valence. These results shed light on one link between emotional states and economic decision making.