Effects of induced moods on economic choices

Abstract

Emotions can shape decision processes by altering valuation signals, risk perception, and strategic orientation. Although multiple theories posit a role for affective processes in mediating the influence of frames on decision making, empirical studies have yet to demonstrate that manipulated affect modulates framing phenomena. The present study asked whether induced affective states alter gambling propensity and the influence of frames on decision making. In a between-subjects design, we induced mood (happy, sad, or neutral) in subjects (N=91) via films that were interleaved with the framing task. Happy mood induction increased gambling and apparently accentuated framing effects compared to sad mood induction, although the effect on framing could have resulted from the fact that the increased tendency to gamble made the framing measure more sensitive. Happy mood induction increased gambling, but not framing magnitude, compared to neutral mood induction. Subjects experiencing a sad mood induction did not exhibit behavioral differences from those experiencing a neutral mood. For those subjects who experienced the happy mood induction, both gambling propensity and framing magnitude were positively correlated with the magnitude of the change in their mood valence. We discuss the broader implications of mood effects on real-world economic decisions. % changes in abstract

Keywords

• decision making
• risk
• behavioral economics
• framing
• affect
• mood
• emotion.NAKeywords