Risk Aversion and Emotions in DoND

Abstract

Contrary to the traditional economic school of thought, emotions known to have a huge effect on cognitive processes leading to decisions. In this context, it can be observed that some television shows provide a very appropriate test-bed for examining decision-making behavior under risk. This study attempts to estimate the degree of Arrow-Pratt RRA for a group of decision-makers composed of 101 “Deal or No Deal” TV show contestants. For further analysis, a “face-reading” software was employed in order to identify emotions experienced by contestants at various parts of the game, and the influence of such emotions on the risk aversion behavior. Our findings suggest that emotions have an influence on the decisions of the contestants.