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Lizz Platt

I found the section about carry-over effects on decision-making fascinating not only with regard to the study of behavioral economics but also concerning everyday life choices. The incidental affect is an affective state that is unrelated to the decision but can shift choices. Studies cited in the text show how the introduction of stress through mechanisms of cold water or public speaking with evaluations exaggerates a person’s tendencies. Specifically, participants were seen to be even more risk-averse in the gain domain and even more risky in the loss domain after exposure to stress. This study led me to wonder if this same shift in behavior is seen in people living below the poverty line. Living in poverty would lead to greater stress and this stress might lead to a change in behavior. When presented with a loss domain situation, are people with low incomes more likely to take risky strategies than those with higher incomes? Do people in poverty experience more instances of loss domain, leading to an increased incidence of risky behavior?

The authors also examine gender differences when under stress. Lighthall et al. concludes males under stress increased their risk taking while women decreased risky behavior. In Professor Shester’s Women in Economics class, we have discussed reasoning for differences in negotiating behavior of men and women. One major explanation in the literature is risk aversion in women. Females tend to take more conservative routes while men are willing to choose a riskier strategy with a potentially larger payout. I would consider a salary negotiation stressful in the sense that the stakes are high and may cost the player a job if they aim too high. It is similar to the stress induction mechanism seen in the previous study because one must publicly present their offer to a potential employer and the employer is free to offer negative or positive feedback. Considering negotiations in light of the Lighthall et al.’s study, gender differences are further explained. As negotiations continue, women might decrease their risk taking, similar to a decrease in pumps per balloon, and settle for a lower salary. Men, on the other hand, might continue to take risks, as seen in an increase in pumps per balloon, and have a larger payout in the form of a higher salary.

Patrick McCarron

I found the section about mood to be particularly fascinating. We've all experience the endowment effect-- where the owner of a good is only willing to sell that good for a price higher than what a potential buyer is willing to pay. But a bad mood can actually change the endowment effect to a "reverse endowment effect"--where the seller lowers his selling price. Rarely in economics can we experience this reverse effect, but sad moods cause this to happen.

In one experiment mentioned in the chapter, participants were showed different types of films: sad, disturbing and neutral. Those who were shown the sad films were willing to sell a set of highlighters for lower than the WTP of the buyer--the sad seller simply wants to get the highlighters out of his life in an attempt to change his mood. He associates something completely unrelated--his selling price--with the mood the films imposed on him. This seems to be another example of an economic player having behavior that is influenced by unrelated, outside events.

Kasey Cannon

I also found the section on mood and affective priming very interesting. I think it makes perfect sense and why mood induction would shift a person's mood. We have all experienced watching a sad movie and how it changes your mood even after the movie is over. However, I find it extremely fascinating how people's moods can be altered subliminally through affective priming. In one experiment, the groups of participants were subliminally presented with angry, happy, and neutral faces. Afterwards, the participants poured, consumed, rated, and indicated their willingness to pay for a non-alcoholic drink. Interestingly, those exposed to happy faces poured and consumed more of the beverage and also increased their willingness to pay for it. On the other hand, those exposed to angry faces showed the opposite effect. I found this experiment particularly interesting. Whether it is ethical or not, subliminal marketing could be extremely effective...

Ali Norton

Two discussions in this chapter particularly fascinated me. The first was the section regarding how “emotional priming” affects decision-making. The study’s results struck me as surprising- that seeing only an image of a happy, angry, or neutral face would then result in such varying choice of beverage consumption and willingness to pay for the beverage. What further surprised me, and I would expect has serious implications for marketing techniques, is that the emotional primers went undetected by the participants. In thinking about how products are marketed (and for the goal of profit maximization) it puzzles me that such a small, undetected change in emotion, caused by an outside factor could have such an affect on the consumer’s product consumption. In the context of marketing, and specifically ethical marketing, I wonder what the participants would have said about their experience purchasing and drinking the beverage a few days later. Would the participants who were exposed to the happy face and proceeded to drink more beverages and have a higher willingness to pay think about this experience positively? If so, then maybe marketing techniques maximizing consumers reaction to something “happy” is ethical. If these participants looked back on the experience with regret, then perhaps this marketing strategy is less ethical.

Additionally, the section discussing attempts to change emotional reactions by actively manipulating thoughts further interested me and reminded me of the article I’ve linked below from the New York Times. This article fascinated me, as it discusses the use of MDMA in therapy sessions to allow patients to recount traumatic memories in order to rebuild memories and cope with anxiety and depression stemming from these traumatic events.


Michael Fitzgerald

I found one sentence in this chapter very interesting. “The experimental investigation of the relation between emotion and decision making requires that researchers measure or manipulate a generally agreed upon affective component.” The part of this that I found very interesting was the “generally agreed upon” part. This to me more accurately shows the relationship between economics and neuroscience than anything else. When economists write papers they list “assumptions,” despite the fact that those have yet to be proven completely true themselves. Whenever economists debate, each will say that their point is “generally agreed upon.” On the neuroscience side this is equally true based on this reading. They use a “generally agreed upon affective component” to measure emotion. Not only is the not-so-firm idea of general consensus questionable, but what they are measuring is just to see if something happens. They do not know how to effective measure the qualitative value of the emotion, only that it was linked to emotion. This is also very similar to economics because economists often try to equate correlation and causation without proper evidence. In economics, this stems mostly from the inability to conduct controlled experiments on a large scale; while in neuroscience it stems from an inability to accurately measure brain activity and what it means. While there may be different underlying problems in the two disciplines, the problem remains the same.

Matt Kinderman

This was an interesting chapter to read that I got a lot out of. Many of the assertions and experiments made sense when thinking about their applications in daily life. For example, the authors discuss how memories require additional storage to gain stability. Thinking about my own experiences, this active storage scenario seems quite true. Over time, memories fade. Those that do not fade tend to morph into memories focusing on small details as we like to imagine them. This reminds me of a group of friends looking back on an old story over time. Often times the story is greatly exaggerated to focus on a few key details or sentiments that often can look far from the original story but are more related to an aspect in the present.

Another interesting example comes from looking at the emotional impact of valuation from mood induction. They found that sad moods often biased preferences towards high-risk, high-reward options whereas anxious moods biased preferences towards low-risk, low-reward preferences. When thinking of those living in poverty, especially children in high stress environments, I think of feelings of sadness and anxiety as dominating one’s life. Not knowing much about the effects, but these opposite biases seem like it makes kids more volatile in these situations, with opposite biases tugging at one another. Constant states of sadness could cause children to be biased toward engaging in higher risk and irrational behavior like drug abuse and gambling (more when adults.) And feelings of anxiety could bias one towards low risk behavior cause a decreased belief in one’s self and slow the child from “dreaming big”. These are just two potential applications to the real world from small sections of this chapter, which really illustrates how far reaching the impact of emotion is on decision making.

Madison Smith

First, as silly as this might sound, I think it is pretty cool that words like mood, stress and emotion have tangible effects on decisions. When I think of those words, I think of more abstract concepts that have been created to help humans describe how they feel to others, but in reality, they are all words that can be connected to parts of the brain and even to physical reactions.

As many of my classmates have discussed, the section on mood was particularly fascinating to me, especially because I have definitely been subjected to the “increased likelihood of ownership when not endowed with the item” (I think this would be what normal people call therapy shopping). I have definitely witnessed the reversed endowment effect with how much easier it is to convince myself or a friend to buy something while in a sad mood.

Overall, this chapter shows us that all of those times in other econ classes where a problem told us that “Bobby prefers two apples over 4 oranges” should probably also have a clarifying statement about his mood and emotions at that time. I think that it points out that a lot of what we may think we know about preferences is not necessarily set in stone. This was definitely seen in the chapter’s section on choice blindness. It is crazy that you can convince someone to defend that they like something better than something else right after they told you that they actually like the other better.

Katherine Hodges

In the carry-over effect where the affective response is incidental to the choice, but still influences the assessment of subjective value and the decision, the Cold Pressor Test is very informative. For me, I have a whole systemic reaction to cold, so I think I would be under an unusually high amount of stress compared to average participants. Nonetheless, the fact that studies are showing that an increased level of stress can exaggerate decision-making is important. At W&L, although it's not cold, the self-scheduling of exams in the C-school lowers stress on students. I wonder if that would then have an effect on student decision-making and performance (in addition to many other factors).

In these chapters, I am very interested in the advancements of scientific testing to monitor affect, mood, and emotion. The Balloon Analogue Risk Task is another neat method of looking at stress and decision making. The results of this study found that men take more risks and women take fewer risks under stress. Then performing those tests under an fMRI, neuroscientists found that the gender differences could lie in the activity of the insula and putamen. The process from the BART to the fMRI takes an observation and starts to pinpoint the areas and reasons why the observation occurs.

Genny Francis

One thing I thought was really interesting was that in the experiments looking at both stress and mood, the results were different based on gender. In the stress experiment, the same stressors that increased risk taking behavior in men also decreased risk taking behavior in women. Also in the mood experiments, anger increased risk taking in men while disgust increased risk taking behavior in women. I thought this was an interesting phenomenon especially since men and women behaved the same in neutral states. I was wondering why these differences occur, and what kind of explanations neuroscientists might have for this occurrence? I though this was an interesting question that the textbook didn’t really address and I was wondering if there has been any research done on this topic, and if so what were the results? Also what implications does this difference in behavior have for economic models?


The discussion about the slow demise of the limbic system and the idea of a concentrically older brain, and how this applies to the dual-aspect theory of mind, I found particularly interesting. While I agree that the validity of the limbic system theory has been very much called into question, I would hesitate to conclude from this that there is no truth in the dual-aspect theory of mind (of passions vs. impartial spectator, in Adams' language). To wit, just because different emotions are modulated by very different parts of the brain (and which developed at various times in our evolutionary history), and just because mood is different from emotions and has an impact on behavior and emotions (as well as vice versa) does not mean that there is not a competition between two fundamental "aspects" of the mind. That is to say, just because all emotions are not conferred by a specific and unique part of the brain that is particularly ancient does NOT necessarily indicate that the dual-aspect theory is correct. In fact, it could be that, like language, memory, and indeed consciousness itself, the two aspects of mind are conferred in a complex way and are not modulated by a centralized and localized region of the brain, but are instead an “emergent” phenomenon. We truly are on the cusp of a new paradigm of the study of mind, but that does not mean we should rush to throw out purely philosophical or psychological theories and observations about how the mind works. It is my opinion that the dual-aspect theory will be vindicated notwithstanding new research showing that the conventionally described limbic system is outmoded.

Bobby DeStefano

I find it interesting, like many other classmates, that we are not taught about how the metal state of a person effects their preferences. We are taught that if I prefer A to B, that I will always prefer A to B. But this is not the case; my preference can change with the mood I am in. So far this semester we have questioned the idea of rational choice, and this idea that our preferences change depending on mental state may help us overcome the idea that people make irrational decision. The idea of rational choice (if I prefer a to B and B to C, the I prefer A to C) may only hold true in the same mental state.
The Cognitive Dissonance Theory is something that I find to be very interesting. In my other econ classes, I was told that the choices people make are based on their preferences, but was never told that the choices people make effect their preferences. The experiment that Sharot and colleagues conducted in 2010, showed that “simply believing that they had chosen an item increases participants’ preference for that item” (232). I find this particularly interesting because you can see this idea everyday. PC or MAC. I prefer MAC to PC simply because my parents gave me a MAC so now have convinced myself that MACs are better than PCs. But I have friends who prefer PCs to MACs simply because they own a PC.

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