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The Emotional Information Processing System is Risk Averse: Ego-Depletion and Investment Behavior

TL;DR: The authors showed that ego depletion can have negative as well as positive consequences for investment behavior, depending on the expected values of risk seeking versus risk averse behavior, in mixed-gamble (gain/loss) situations.
Abstract: Two experiments show that a shortage of self-regulatory resources results in more risk aversion in mixed-gamble (gain/loss) situations. The findings support a dual process view that distinguishes between a rational and an affective information processing system, in which self-regulatory resources are the necessary fuel for the rational system. Depending on the expected values of risk seeking versus risk averse behavior, ego depletion can have negative (experiment 1) as well as positive (experiment 2) consequences for investment behavior.

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Citations
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Journal ArticleDOI
TL;DR: This article examined whether ego-depletion limits people's intentionality regarding risk behavior (i.e., choosing an option that has a certain probability of resulting in an adverse outcome).
Abstract: Ego-depletion theory postulates the existence of a mental resource that is necessary for self-regulation. If the resource is diminished by a task involving self-control, achievement in subsequent self-control tasks will be impaired. Three experiments examined whether ego-depletion limits people’s intentionality regarding risk behavior (i.e., choosing an option that has a certain probability of resulting in an adverse outcome). It is assumed that people operating under ego-depletion lack the self-control to deal with these possibly negative outcomes and will, therefore, be prone to avoid risky alternatives, if the decision requires certain levels of responsibility and information processing (i.e., people will choose safe options in an investment scenario with actual pay-offs according to expected values). Results support the assumption that people become risk averse under ego-depletion even when controlling for the alternate assumption that ego-depletion strengthens an existing individual disposition towar...

50 citations

Journal ArticleDOI
TL;DR: In this article, the authors provided causal evidence on the link between self-control and criminal behavior, and found that subjects with low self control take more risk and behave in a more antisocial manner and are less risk-averse.

48 citations

Posted Content
TL;DR: This paper found that American adults and undergraduates are substantially less likely to acknowledge magical effects when the judgments involve money (amount willing to pay to avoid an “unpleasant” magical contact) than they are when using preference or rating measures.
Abstract: Most American respondents give “irrational,” magical responses in a variety of situations that exemplify the sympathetic magical laws of similarity and contagion. In most of these cases, respondents are aware that their responses (usually rejections, as of fudge crafted to look like dog feces, or a food touched by a sterilized, dead cockroach) are not “scientifically” justified, but they are willing to avow them. We interpret this, in some sense, as “heart over head.” We report in this study that American adults and undergraduates are substantially less likely to acknowledge magical effects when the judgments involve money (amount willing to pay to avoid an “unpleasant” magical contact) than they are when using preference or rating measures. We conclude that in “head-heart” conflicts of this type, money tips the balance towards the former, or, in other words, that money makes the mind less magical.

35 citations

Journal ArticleDOI
TL;DR: Evidence is provided for the conclusion that people become risk averse to lottery style gambles after cognitive depletion and losing, and the research and clinical implications are discussed.
Abstract: Previous research has shown mixed results regarding the effects of cognitively draining tasks, sometimes reporting that the depletion of cognitive resources increases risk taking and other times reporting that depletion leads to increases in risk aversion. Additionally, evidence has been provided demonstrating that both winning and losing can increase future risk-taking. This experiment was designed to assess the interaction between cognitive resource depletion and outcomes in blackjack on risky decision making. A 2 × 2 between subjects design was employed in which 81 university undergraduates were randomized to either a cognitive resource depletion condition or control condition and then a winning condition or losing condition. Participants completed a self-report measure of decision making and then a completed a task in which they could make actual wagers to win a lottery. Evidence is provided for the conclusion that people become risk averse to lottery style gambles after cognitive depletion and losing. Research and clinical implications are discussed.

18 citations

Journal ArticleDOI
TL;DR: None of the studies revealed a significant effect of ego depletion on risk taking, which cast further doubts about the ability of ego-depletion manipulations to affect actual behavior in experimental settings.
Abstract: We investigated the effect of ego depletion on risk taking. Specifically, we conducted three studies (total n = 1,716) to test the prediction that ego depletion results in decisions that are more strongly in line with prospect theory, i.e., that ego depletion reduces risk taking for gains, increases risk taking for losses, and increases loss aversion. Ego depletion was induced using two of the most common manipulations from previous literature: the letter ‘e’ task (Studies 1 and 3) and the Stroop task (Study 2). Risk taking was measured using a series of standard, incentivized economic decision-making tasks assessing risk preferences in the gain domain, risk preferences in the loss domain, and loss aversion. None of the studies revealed a significant effect of ego depletion on risk taking. Our findings cast further doubts about the ability of ego-depletion manipulations to affect actual behavior in experimental settings.

12 citations

References
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Book ChapterDOI
TL;DR: In this paper, the authors present a critique of expected utility theory as a descriptive model of decision making under risk, and develop an alternative model, called prospect theory, in which value is assigned to gains and losses rather than to final assets and in which probabilities are replaced by decision weights.
Abstract: This paper presents a critique of expected utility theory as a descriptive model of decision making under risk, and develops an alternative model, called prospect theory. Choices among risky prospects exhibit several pervasive effects that are inconsistent with the basic tenets of utility theory. In particular, people underweight outcomes that are merely probable in comparison with outcomes that are obtained with certainty. This tendency, called the certainty effect, contributes to risk aversion in choices involving sure gains and to risk seeking in choices involving sure losses. In addition, people generally discard components that are shared by all prospects under consideration. This tendency, called the isolation effect, leads to inconsistent preferences when the same choice is presented in different forms. An alternative theory of choice is developed, in which value is assigned to gains and losses rather than to final assets and in which probabilities are replaced by decision weights. The value function is normally concave for gains, commonly convex for losses, and is generally steeper for losses than for gains. Decision weights are generally lower than the corresponding probabilities, except in the range of low prob- abilities. Overweighting of low probabilities may contribute to the attractiveness of both insurance and gambling. EXPECTED UTILITY THEORY has dominated the analysis of decision making under risk. It has been generally accepted as a normative model of rational choice (24), and widely applied as a descriptive model of economic behavior, e.g. (15, 4). Thus, it is assumed that all reasonable people would wish to obey the axioms of the theory (47, 36), and that most people actually do, most of the time. The present paper describes several classes of choice problems in which preferences systematically violate the axioms of expected utility theory. In the light of these observations we argue that utility theory, as it is commonly interpreted and applied, is not an adequate descriptive model and we propose an alternative account of choice under risk. 2. CRITIQUE

35,067 citations

01 Jan 1996
TL;DR: In The Emotional Brain, Joseph LeDoux investigates the origins of human emotions and explains that many exist as part of complex neural systems that evolved to enable us to survive.
Abstract: Apa yang terjadi di otak kita untuk membuat kita merasa takut, benci, marah, dan sukacita? Apakah kita mengendalikan emosi kita, atau apakah emosi itu mengendalikan kita? Apakah hewan memiliki emosi? Bagaimana pengalaman traumatis pada masa anak-anak awal dalam mempengaruhi perilaku pada masa dewasa, walaupun kita tidak memiliki memori sadar terhadap pemngalaman itu? Dalam The Emotional Brain, Joseph LeDoux menyelidiki asal-usul emosi manusia dan menjelaskan kompleksitas evolusi sistem syaraf yang memungkinkan kita dapa bertahan hidup. Joseph LeDoux adalah salah satu profil peniliti utama dalam emotional Intelligence karya Danierl Goleman yang merupakan penulis terkemuka di bidang neurosains. Di dalam buku The Emotional Brain yan provokatif ini, ia mengeksplorasi mekanisme otak yang mendasari emosi kita mekanisme yang baru sekarang terungkap.

3,849 citations

Journal ArticleDOI
TL;DR: The authors hypothesize that there is a general bias, based on both innate predispositions and experience, in animals and humans to give greater weight to negative entities (e.g., events, objects, personal traits).
Abstract: We hypothesize that there is a general bias, based on both innate predispositions and experience, in animals and humans, to give greater weight to negative entities (e.g., events, objects, personal traits). This is manifested in 4 ways: (a) negative potency (negative entities are stronger than the equivalent positive entities), (b) steeper nega tive gradients (the negativity of negative events grows more rapidly with approach to them in space or time than does the positivity of positive events, (c) negativity domi nance (combinations of negative and positive entities yield evaluations that are more negative than the algebraic sum of individual subjective valences would predict), and (d) negative differentiation (negative entities are more varied, yield more complex conceptual representations, and engage a wider response repertoire). We review evi dence for this taxonomy, with emphasis on negativity dominance, including literary, historical, religious, and cultural sources, as well as the psychological literatures on learning, attention, impression formation, contagion, moral judgment, development, and memory. We then consider a variety of theoretical accounts for negativity bias. We suggest that 1 feature of negative events that make them dominant is that negative entities are more contagious than positive entities.

3,032 citations

Journal ArticleDOI
TL;DR: A strength model of self-regulation fits the data better than activation, priming, skill, or constant capacity models ofSelf-regulation.
Abstract: If self-regulation conforms to an energy or strength model, then self-control should be impaired by prior exertion. In Study 1, trying to regulate one's emotional response to an upsetting movie was followed by a decrease in physical stamina. In Study 2, suppressing forbidden thoughts led to a subsequent tendency to give up quickly on unsolvable anagrams. In Study 3, suppressing thoughts impaired subsequent efforts to control the expression of amusement and enjoyment. In Study 4, autobiographical accounts of successful versus failed emotional control linked prior regulatory demands and fatigue to self-regulatory failure. A strength model of self-regulation fits the data better than activation, priming, skill, or constant capacity models of self-regulation.

1,936 citations