Effects of Stress on Economic Decision-Making: Evidence from Laboratory Experiments

Arbeitspapier

The ways in which preferences respond to the varying stress of economic environments is a key question for behavioral economics and public policy. We conducted a laboratory experiment to investigate the effects of stress on financial decision making among individuals aged 50 and older. Using the cold pressor task as a physiological stressor, and a series of intelligence tests as cognitive stressors, we find that stress increases subjective discounting rates, has no effect on the degree of risk-aversion, and substantially lowers the effort individuals make to learn about financial decisions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 8060

Classification and Topics

• Classification: Wirtschaft ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; General Welfare; Well-Being
• Subject: stress ; financial decisions ; discounting ; risk aversion ; learning

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Delaney, Liam ; Fink, Günther ; Harmon, Colm P.
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/96734
• Last update: 10.03.2025, 11:43 AM CET