The Arousing Risk: Influences of positive and negative arousal on preferences for economic risk

Standard economic models explain decision making under risk as a utility maximization process. Developments in cognitive psychology and neuroeconomics showed the volatility of such conceptualization highlighting human bounded rationality and discussing the role of decision maker’s affective state (basic reactions to any emotionally charged event) in cognitive evaluation of risk (risk as feeling). In particular, an affective-based evaluation of choice options may determine whether decision maker’s behavior will be risk averse or risk seeking. Evidence indicates that affective reactions carry over significant information about the goodness of certain choice options directly influencing risk taking behavior. Affective influences on decisions may be directly associated with the evaluation of the choice options and the anticipation of future outcomes (integral affect) or may be associated with stimuli or event unrelated to the decision at hand, for example contextual factors or environmental cues (incidental affect). A classic advertisement strategy, such as a smiling face presented in association with a good, is an example of contextual affective manipulation. Research shows that experiencing a positive affective state may lead to risk aversion behavior while negative affect may lead to risk seeking. However, previous studies mostly adopted a valence-based approach to the study of affect ignoring its multidimensional nature. In particular, the role of arousal has been largely neglected. Recent studies showed that emotional states with the same valence may have opposite consequences on risk taking. Therefore, the main purpose of the series of studies described in this dissertation was to investigate the effect of inducing incidental affective states at high and low levels of negative arousal or positive arousal on preferences for monetary options varying in risk. Research shows that elevated arousal is associated with cognitive depletion, increased sensitivity to rewards, immediate gratification, less resistance to temptation. Therefore, we hypothesized that affective states characterized by high levels of arousal might increase preferences for the riskier option. We further predicted that including arousing stimuli as contextual factor of a decision scenario would capture individual attention interfering with information processing of risk. In order to achieve this goal, in a first series of experiments we asked participants to make choices between couples of two-outcomes lotteries with the same expected value but different risk. Arousal was manipulated by presenting participants with visual stimuli (IAPS pictures) varying in the level of arousal (high or low) keeping the valence unvaried (negative or positive). By adopting the technique of contextual priming, participants were simultaneously exposed to stimuli (the lotteries) and the contextual factor (the arousing/unarousing image). An effect of arousal on predicting risky choice was found. Probability of selecting the riskier lottery was higher when an arousing stimuli (unpleasant or pleasant) was included as part of the decision context. In some cases, positive arousal was found to interact with gender: risk taking was higher in males than females when a pleasant arousing cue was presented. In a second series of studies, participants performed the same task and, by using an eye tracker, eye fixations and looking times were recorded. The predicted effect of arousal on attention was found. Participants spent more time looking at the arousing image (unpleasant or pleasant). This result is in line with arousal theories which correlate the level of arousal to attention allocated to the arousing stimuli. Furthermore, participants seemed to process less risky information (as indicated by decreased looking times toward the riskier option) when the arousing stimuli was contextually presented, as opposed to when the unarousing stimuli was presented.