Friday, January 4, 2019

We test the reproducibility/generalisability of priming effects on risk attitudes: we find no systematic effect; fear does not appear to cause countercyclical risk aversion; positive affect makes participants take more risk

On the priming of risk preferences: The role of fear and general affect. Despoina Alempaki, Chris Starmer, Fabio Tufano. Journal of Economic Psychology, https://doi.org/10.1016/j.joep.2018.12.011

Highlights
•    We test the reproducibility/generalisability of priming effects on risk attitudes.
•    In a series of experiments, we sample over 1900 subjects from a diverse population.
•    We find no systematic effect of priming on individuals’ risk attitudes.
•    Fear does not appear to cause countercyclical risk aversion.
•    Positive affect makes participants take more risk.

Abstract: Priming is an established tool in psychology for investigating aspects of cognitive processes underlying decision making and is increasingly applied in economics. We report a systematic attempt to test the reproducibility and generalisability of priming effects on risk attitudes in a more diverse population than professionals and students, when priming using either a positive or a negative experience. We further test fear as the causal mechanism underlying countercyclical risk aversion. Across a series of experiments with a total sample of over 1900 participants, we are unable to find any systematic effect of priming on risk preferences. Moreover, our results challenge the role of fear as the mechanism underlying countercyclical risk aversion; we find evidence of an impact of general affect such that the better our participants feel, the more risk they take.