Misestimating Betting Behavior: The Role of Negative Asymmetries in Emotional Self Prediction
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This paper addresses the role of negative asymmetries in emotional self-prediction by looking at the extent to which individuals misestimate their own betting behavior in sequential gambles. In a series of three experimental studies, we demonstrate that losses lead to higher than planned bets whereas bets are on average carried over after gains. Such asymmetric deviations from the plan emerge (1) when monetary and non-monetary incentives are used, and (2) when participants face fair and unfair gambles. The asymmetry is based on people’s inability to predict how much the negative emotions generated by a bad experience (e.g. the loss) will influence them to put more effort (e.g. bet more) than planned in an attempt to re-establish a homeostatic state in the prospect of a good experience (e.g. winning).
KeywordsAffect Decision making Risk taking Emotional self-prediction
The authors thank Caroline Wang, Danielle Rosini, Leonidas Sandoval, Gabriel Sanchez, Leandro Sumita, Maria Beatriz Moraes for their assistance with data collection.
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