Are risk preferences dynamic? : Within-subject variation in risk-taking as a function of background music

This paper investigates whether preference interactions can explain why risk preferences change over time and across contexts. We conduct an experiment in which subjects accept or reject gambles involving real money gain
This paper investigates whether preference interactions can explain why risk preferences change over time and across contexts. We conduct an experiment in which subjects accept or reject gambles involving real money gains and losses. We introduce within-subject variation by alternating subjectively liked music and disliked music in the background. We find that favourite music increases risk-taking, and disliked music suppresses risk-taking, compared to a baseline of no music. Several theories in psychology propose mechanisms by which mood affects risktaking, but none of them fully explain our results. The results are, however, consistent with preference complementarities that extend to risk preference.
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Metadaten
Author:Marja Liisa Halko, Markku Kaustia
URN:urn:nbn:de:hebis:30:3-272526
Parent Title (German):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2012,9
Series (Serial Number):CFS working paper series (2012, 09)
Publisher:CFS
Place of publication:Frankfurt am Main
Document Type:Working Paper
Language:English
Year of Completion:2012
Year of first Publication:2012
Publishing Institution:Univ.-Bibliothek Frankfurt am Main
Release Date:2012/10/18
Tag:Music; Preference Interaction; Risk Taking
Issue:Version March 28, 2012
Pagenumber:29
HeBIS PPN:348140045
Institutes:Center for Financial Studies (CFS)
Dewey Decimal Classification:330 Wirtschaft
JEL-Classification:D81 Criteria for Decision-Making under Risk and Uncertainty
G11 Portfolio Choice; Investment Decisions
Sammlungen:Universitätspublikationen
Licence (German):License Logo Veröffentlichungsvertrag für Publikationen

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