Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/71150
Authors: 
Halko, Marja Liisa
Kaustia, Markku
Year of Publication: 
2012
Series/Report no.: 
CFS Working Paper 2012/09
Abstract: 
This paper investigates whether preference interactions can explain why risk preferences change over time and across contexts. We conduct an experiment in which subjects accept or reject gambles involving real money gains and losses. We introduce within-subject variation by alternating subjectively liked music and disliked music in the background. We find that favourite music increases risk-taking, and disliked music suppresses risk-taking, compared to a baseline of no music. Several theories in psychology propose mechanisms by which mood affects risktaking, but none of them fully explain our results. The results are, however, consistent with preference complementarities that extend to risk preference.
Subjects: 
Risk Taking
Music
Preference Interaction
JEL: 
D81
G11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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