Abstract
We analyze the impact of acute stress on risky choice in a pre-registered laboratory experiment with 194 participants. We test the causal impact of stress on the stability of risk preferences by separating noise in decision-making from an actual shift in preferences. We find no significant differences in risk attitudes across conditions on the aggregate, using both descriptive analyses as well as structural estimations for risk aversion and different noise structures. Additionally, in line with the previous literature, we find statistically significant evidence for lower cognitive abilities being correlated with more noise in decision-making in general. We do not find a significant interaction effect between cognitive abilities and stress on noise levels.
| Original language | English |
|---|---|
| Pages (from-to) | 883-936 |
| Number of pages | 54 |
| Journal | Judgment and Decision Making |
| Volume | 17 |
| Issue number | 4 |
| Publication status | Published - Jul 2022 |
Bibliographical note
Funding Information:∗This research was conducted partly when E. Parslow was a PhD student at the Stockholm School of Economics. †Erasmus School of Economics, Erasmus University Rotterdam. https://orcid.org/0000-0002-9259-826X (corresponding author). ‡Tinbergen Institute, Netherlands We are very grateful for helpful comments and suggestions by Anna Dreber, Jan Engelmann, Christoph Huber, Jürgen Huber, Felix Holzmeister, Magnus Johannesson, Michael Kirchler, Margarita Leib, Kristoffer Mȧnsson, Gustav Nilsonne, Theo Offerman, Johanna Schwarz, Ivan Soraperra, Jeroen van de Ven, as well as seminar participants at the SSE Department of Economics Monday Seminar, the Stockholm Behavioral Economics Group Seminar at SHOF, IMEBESS 2019 in Utrecht, M-BEES 2019 in Maastricht, “Spring School in Behavioral Economics” 2019 in San Diego, “Innsbruck Winter School on Credence Goods, Incentives and Behavior” 2019, Experimental Finance Conference 2019 in Copenhagen, and the CREED seminar at the University of Amsterdam. Financial support from the Jan Wallander and Tom Hedelius Foundation, the Knut and Alice Wallenberg Foundation, as well as the Austrian Science Fund FWF (SFB F63) is gratefully acknowledged.
Publisher Copyright:
© 2022. The authors.