Acute stress affects risk taking but not ambiguity aversion

Area of Science:

• Neuroeconomics
• Decision Neuroscience
• Psychophysiology

Background:

• Economic decisions are frequently made under stressful conditions.
• The impact of acute stress on economic decision-making, especially under uncertainty, remains under-investigated.
• Understanding stress effects is crucial for fields like behavioral economics.

Purpose of the Study:

• To investigate how acute psychosocial stress influences economic decision-making under conditions of risk and ambiguity.
• To examine the role of cortisol as a mediator in stress-induced changes in economic behavior.
• To differentiate the effects of stress on risk-taking versus ambiguity aversion.

Main Methods:

• Utilized financially incentivized lotteries to assess decision-making under risk and ambiguity.
• Employed the Trier Social Stress Test for Groups (TSST-G) to induce acute stress in participants.
• Measured cortisol levels to identify physiological stress responses, excluding feedback to isolate decision-making from learning.

Main Results:

• Acute stress led to increased risk-seeking behavior for potential financial gains.
• This heightened risk-seeking was observed specifically in participants exhibiting a robust cortisol response to stress.
• Decision-making under ambiguity, unlike under risk, was not significantly affected by stress or cortisol levels.

Conclusions:

• Acute psychosocial stress significantly alters economic decision-making, specifically promoting risk-seeking for gains.
• Cortisol response is a key mediator of stress effects on risk-taking behavior.
• Stress does not appear to influence ambiguity aversion in this context, highlighting domain-specific effects.