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Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods
Published on: September 19, 2012
AFFECT AND THE FRAMING EFFECT WITHIN INDIVIDUALS OVER TIME: RISK TAKING IN A DYNAMIC INVESTMENT SIMULATION
Myeong-Gu Seo1, Brent Goldfarb1, Lisa Feldman Barrett2
1University of Maryland.
None:
We examined the role of affect (pleasant or unpleasant feelings) and decision frames (gains or losses) in risk taking in a 20-day stock investment simulation in which 101 participants rated their current feelings while making investment decisions. As predicted, affect attenuated the relationships between decision frames and risk taking. After experiencing losses, individuals made more risky choices, in keeping with the framing effect. However, this tendency decreased and/or disappeared when loss was simultaneously experienced with either pleasant or unpleasant feelings. Similarly, individuals' tendency to avoid risk after experiencing gains disappeared or even reversed when they simultaneously experienced pleasant feelings.
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