Open AccessFinancial Decision Making Under Stress
Author(s) -
Narek Vartan Bejanyan
Publication year - 2021
Language(s) - English
Resource type - Dissertations/theses
DOI - 10.5642/cguetd/199
Subject(s) - lottery , test (biology) , control (management) , psychology , stress test , stress (linguistics) , finance , actuarial science , business , economics , management , microeconomics , paleontology , linguistics , philosophy , biology
The aim of this paper is to examine the link between individuals' financial decisions and stress. In a laboratory experiment, Holt and Laury lottery was used to elicit participants risk preferences. The Cold Pressor Test was used to induce a safe level of stress. In the treatment group, 62% of participants are risk averse; versus 76% in the control group. Additionally, inconsistent financial decision making was observed in both groups: 55% of participants in the treatment group versus 30% in the control.