BE 8: Emotions

  • Created by: charlie
  • Created on: 06-05-18 10:32
Neoclassical economics puzzle: Emotions are un-measurable
Effect of emotions is unpredictable (self-control/ projection bias/ social preferences) + therefore unmodelable
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Decision making under emotions: Model
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Decision making under emotions: Effort costs
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Decision making under emotions: Model (simplified)
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Decision making under emotions: Model predictions (1)
Willpower depletion or unrelated cognitive demands increases make it less likely that the individuals chooses Deliberative optimum (vice versa)
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Decision making under emotions: Model predictions (2)
If intensity for affective motivation increases (temporal/ non-temporal factors) affective preference for Affective optimum over Deliberative optimum, then affective intensity makes it less likely to choose deliberative optimum (vice versa)
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Model applications: emotions & intertemporal choice: model
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Model applications: emotions & intertemporal choice: model (simplified)
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Model applications: emotions & intertemporal choice: predictions (1)
Increasing the cost function = more myopic behaviour (present bias)
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Model applications: emotions & intertemporal choice: predictions (2)
Any factor that increases intensity of affective motivation for immediate payoff = more myopic behaviour
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Model applications: emotions & intertemporal choice empirics: time preference + mood (experiment)
ST mood manipulation through comedy clip/ asked questions about (mood/ time preference for indifference in $X/ demographic + psychological characteristics)
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Model applications: emotions & intertemporal choice empirics: time preference + mood (results)
Watching a comedy clid increases your NPV (discounting less) (predictions (1)) / Other expl: happiness makes you care less about money (prediction 2) / happiness makes you less risk averse about receiving money in future
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Model applications: emotions & intertemporal choice empirics: time preference + mood (ISSUES)
Reverse causality (people that have LT goals are happier) = Mood manipulation (ST comedy clip) = People dont tell truth = Pick one individual to actually receive $X
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Model applications: emotions & risk decisions (P.T): model
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Model applications: emotions & risk decisions (P.T): predictions (1)
Increase cost function = magnifies Prospect Theory (Loss Aversion/ Non-Linear decision weights)
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Model applications: emotions & risk decisions (P.T): predictions (2)
Lotteries with same good (money) + affective motivation intensity: increase in affective intensity = magnifies Prospect Theory
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Model applications: emotions & risk decisions (P.T) empirics: Sexual arousal & willpower depletion
When treated with sexual arousal = higher willingness to engage in **** behaviour/ risky behaviour (prediction 1)/ Other expl: sexual arousal may affect 1) Beliefs 2) Present bias 3) Honesty
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Model applications: emotions & social preferences: model
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Model applications: emotions & social preferences: model (simplified)
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Model applications: emotions & social preferences: Predictions (1)
Increase cost function = increases your care for others when affective motivation is high (vice versa)
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Model applications: emotions & social preferences: Predictions (2)
Any factor increasing affective motivation = increases your care for others (factor their utility into your utility much more)
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Model applications: emotions & social preferences empirics: NFL defeats + IPV (relation to the model)
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Model applications: emotions & social preferences empirics: NFL defeats + IPV (regression)
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Model applications: emotions & social preferences empirics: NFL defeats + IPV (results)
1) Upset losses = +ve coef (sig) 2) close losses = +ve coef (n.s) 3) upset win = 0
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Model applications: emotions & social preferences empirics: NFL defeats + IPV (ISSUES)
Selection = excuse to engage in IPV if watching NFL team loss = control for predicted outcomes
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Card 2

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Decision making under emotions: Model

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Card 3

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Decision making under emotions: Effort costs

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Card 4

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Decision making under emotions: Model (simplified)

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Card 5

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Decision making under emotions: Model predictions (1)

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