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BRIEF REPORT

Fear, excitement, and financial risk-taking

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Pages 178-187 | Received 17 Jul 2013, Accepted 24 Feb 2014, Published online: 24 Mar 2014
 

Abstract

Can fear trigger risk-taking? In this paper, we assess whether fear can be reinterpreted as a state of excitement as a result of contextual cues and promote, rather than discourage, risk-taking. In a laboratory experiment, the participants' emotional states were induced (fear vs. control), followed by a purportedly unrelated financial task. The task was framed as either a stock market investment or an exciting casino game. Our results showed that incidental fear (vs. control) induced risk-averse behaviour when the task was framed as a stock investment decision. However, fear encouraged risk-taking when the very same task was framed as an exciting casino game. The impact of fear on risk-taking was partially mediated by the excitement felt during the financial task.

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