Financial Decision Making Under Stress | Zendy

Narek Bejanyan | Zendy

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Financial Decision Making Under Stress

Author(s) -

Narek 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 (linguistics) , stress test , finance , actuarial science , 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.

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