Asymmetric Anticipatory Emotions and Economic Preferences: Dread, Savoring, Risk, and Time

We are often preoccupied with the future, experiencing dread at the thought of future misery and savoring the thought of future pleasure. Prior lab studies have found that these anticipatory emotions influence decision-making. In this article, using economic survey data to estimate individual differences in anticipatory emotions, we find that the tendency to feel displeasure from anticipating future losses outweighs the pleasure from anticipating equal gains. We then relate asymmetries in anticipatory emotions to key economic preferences, finding that people with more strongly asymmetric anticipatory emotions are more risk-avoidant (because they obtain more disutility from contemplating downside risk) and more impatient (because they want to minimize the time spent contemplating risks). We conclude by considering how asymmetries in anticipatory emotions may be linked to a range of intertemporal and risky choice phenomena. Overall, our framework explains why risk-avoidance and impatience are linked, and we provide suggestive evidence for this explanation.