Fear,excitement, and financial risk-taking |
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| Authors: | Chan Jean Lee Eduardo B Andrade |
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| Institution: | 1. Department of Marketing, KAIST College of Business, Seoul, South Koreachanjean@business.kaist.ac.kr;3. Department of Marketing, Brazilian School of Public and Business Administration at FGV, Rio de Janeiro, Brazil |
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| Abstract: | Can fear trigger risk-taking? In this paper, we assess whether fear can be reinterpreted as a state of excitement as a result of contextual cues and promote, rather than discourage, risk-taking. In a laboratory experiment, the participants' emotional states were induced (fear vs. control), followed by a purportedly unrelated financial task. The task was framed as either a stock market investment or an exciting casino game. Our results showed that incidental fear (vs. control) induced risk-averse behaviour when the task was framed as a stock investment decision. However, fear encouraged risk-taking when the very same task was framed as an exciting casino game. The impact of fear on risk-taking was partially mediated by the excitement felt during the financial task. |
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| Keywords: | Emotion Fear Excitement Risk-taking Financial decision |
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