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IZA
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Effects of Stress on Economic Decision-Making: Evidence from Laboratory Experiments
by
Liam Delaney, Günther Fink, Colm P. Harmon
(March 2014)
Abstract:
The ways in which preferences respond to the varying stress of economic environments is a key question for behavioral economics and public policy. We conducted a laboratory experiment to investigate the effects of stress on financial decision making among individuals aged 50 and older. Using the cold pressor task as a physiological stressor, and a series of intelligence tests as cognitive stressors, we find that stress increases subjective discounting rates, has no effect on the degree of risk-aversion, and substantially lowers the effort individuals make to learn about financial decisions.
Text: See Discussion Paper No. 8060 
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