Negative Tail Events, Emotions and Risk Taking

• 成果类型: Article
• 署名作者: Corgnet, Brice; Cornand, Camille; Hanaki, Nobuyuki
• 署名单位: Centre National de la Recherche Scientifique (CNRS); Ecole Normale Superieure de Lyon (ENS de LYON); Universite Claude Bernard Lyon 1; Universite Jean Monnet; Universite Lyon 2; University of Osaka; emlyon business school; Centre National de la Recherche Scientifique (CNRS); Ecole Normale Superieure de Lyon (ENS de LYON); Universite Claude Bernard Lyon 1; Universite Jean Monnet; Universite Lyon 2
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1093/ej/uead080
• 发表日期: 2024
• 页码: 538-578
• 关键词: mood-congruent memory; prospect-theory; rare disasters; rational-expectations; Investor sentiment; circumplex model; loss aversion; asset prices; neural basis; house money

摘要

We design a novel experiment to assess investors' behavioural and physiological reactions to negative tail events. Investors who observed, without suffering from, tail events decreased their bids, whereas investors suffering tail losses increased them. However, the increase in bids after tail losses was not observed for those who exhibited no emotional arousal. This suggests that emotions are key in explaining prospect theory prediction of risk seeking in the loss domain.