Baillon, Aurelien
[Verfasser:in]
;
Koellinger, Philipp
[Sonstige Person, Familie und Körperschaft];
Treffers, Theresa
[Sonstige Person, Familie und Körperschaft]
Erschienen in:Tinbergen Institute Discussion Paper 14-044/I
Umfang:
1 Online-Ressource (38 p)
Sprache:
Englisch
DOI:
10.2139/ssrn.2418946
Identifikator:
Entstehung:
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 31, 2014 erstellt
Beschreibung:
Many important decisions are made without precise information about the probabilities of the outcomes. In such situations, individual ambiguity attitudes influence decision making. The present study identifies affective states as a transient cause of ambiguity attitudes. We conducted two random-assignment, incentive-compatible laboratory experiments, varying subjects' affective states. We find that sadness induces choices that are closer to ambiguity-neutral attitudes compared with the joy, fear, and control groups, where decision makers deviate more from payoff-maximizing behaviors and are more susceptible to likelihood insensitivity. We also find a similar pattern in a representative population sample where cloudy weather conditions on the day of the survey -- a proxy for sad affect -- correlate with more ambiguity-neutral attitudes. Our results may help explain real-world phenomena such as financial markets that react to regular fluctuations in weather conditions