Risk Aversion and Emotions

Research output: Contribution to journalArticlepeer-review

57 Scopus citations


We consider the relationship between emotions and decision-making under risk. Specifically, we examine the emotional correlates of risk-averse decisions. In our experiment, individuals' facial expressions are monitored with face reading software, as they are presented with risky lotteries. We then correlate these facial expressions with subsequent decisions in risky choice tasks. We find that a more positive emotional state is positively correlated with greater risk taking. The strength of a number of emotions, including fear, happiness, anger and surprise, is positively correlated with risk aversion.

Original languageEnglish (US)
Pages (from-to)296-312
Number of pages17
JournalPacific Economic Review
Issue number3
StatePublished - Aug 2014
Externally publishedYes


  • C9

ASJC Scopus subject areas

  • Economics and Econometrics


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