Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/312871 
Year of Publication: 
2024
Series/Report no.: 
AWI Discussion Paper Series No. 757
Publisher: 
University of Heidelberg, Department of Economics, Heidelberg
Abstract: 
Understanding how emotions stemming from negative outcomes affect investment decisions is critical for studying choice under uncertainty. I build a framework to study how past and anticipated negative emotions interact with an agent's preference and environment to influence her investment level. I show that the dynamic effect of emotions on decisions is more complicated than previously thought and requires a careful analysis of the decision environment to build correct predictions. Using baseball data, I show how to use the theoretical framework empirically to investigate the dynamic impact of emotion and find that it leads to suboptimal pitch velocity decisions.
JEL: 
D90
D91
C13
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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