The effect of emotional states on decision making: experimental evidence

Official URL: http://risc01.sabanciuniv.edu/record=b1669247 (Table of Contents)

Being emotionally aroused often involves making different choices than one’s ex-ante preferences. In this research project, we experimentally study the effect of incidental emotions induced through movies on individuals’ social preferences. We design an experiment which consists of a triadic design Trust Game to identify the subjects’ trusting and positive reciprocal preferences, a triadic design Ultimatum Game to identify their negative reciprocal preferences and the Dictator Game to identify their altruistic preferences. Our results suggest that there exists an impact of emotions on the social preferences. Firstly, sad people are less motivated by the fear of rejection than happy people and than people in a neutral mood. Secondly, sad people behave more altruistically than people in a neutral mood. Finally, we find evidence to support that happy people trust less than people in a neutral mood. Results provide evidence against the hypothesis that emotions do not systematically affect the decisions that concern other people.