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Emotion Regulation and Economic Decision-Making

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Abstract

Emotion plays an important role in human social and economic decision-making. Only in the last few decades has this view been accepted in mainstream research by economists and psychologists studying decisional processes. Many studies now provide compelling evidence that the experience of various different emotions influence changes in decisional outcomes. Emerging research on emotion regulation, however, highlights that humans typically make efforts to control emotion experiences. This leaves open the possibility that decision effects attributed to acute emotions may be affected by regulatory strategies. If so, this raises the additional possibility that different regulation strategies could have different implications for economic decisions. Researchers have recently begun to study these possibilities and discovered that emotion regulation can indeed modulate effects that task-related and incidental emotions have on decisions. In this chapter, we provide a review of the empirical studies that have investigated the effects of regulatory strategies on social and economic decisions. We present an overview of the concept of emotion regulation by referring to the different types of regulatory strategies and their cognitive and behavioral effects. We proceed to review empirical studies relevant for various types of decision-making, such as risk and ambiguity, susceptibility to framing, and economic bargaining. We conclude by discussing practical implications of this rapidly evolving research topic.

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Acknowledgments

Writing this paper was supported by grant grant number PCE-ID-2012-4-0498 from the Romanian National Authority for Scientific Research, CNCS–UEFISCDI to A.C.M. and by CNCSIS—UEFISCDI, project number PNII—IDEI, 2440/2008.

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Authors and Affiliations

  1. Department of Psychology, Babes-Bolyai University, 37 Republicii, 400015, Cluj-Napoca, CJ, Romania

    Renata M. Heilman & Andrei C. Miu

  2. Department of Economics and Interdisciplinary Center for Economic Science, George Mason University, 4400 University Drive, MSN 1B2, Fairfax, VA, 22030, USA

    Daniel Houser

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  1. Renata M. Heilman
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Correspondence to Daniel Houser .

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  1. Differentielle and Biologische Psychologie, Rheinische Friedrich-Wilhelms- Universität Bonn, Bonn, Germany

    Martin Reuter

  2. Department of Molecular Psychology, Institute for Psychology and Education, Ulm University, Ulm, Germany and Key Laboratory for NeuroInformation, School of Life Science and Technology, Center for Information in Medicine, University of Electronic Science and Technology of China, Chengdu, China

    Christian Montag

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Heilman, R.M., Miu, A.C., Houser, D. (2016). Emotion Regulation and Economic Decision-Making. In: Reuter, M., Montag, C. (eds) Neuroeconomics. Studies in Neuroscience, Psychology and Behavioral Economics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-35923-1_7

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