A1158
Title: The role of immediate emotions in investment decisions
Authors: Richard Fairchild - University of Bath (United Kingdom)
Muhamed Alsharman - Bath University (United Kingdom) [presenting]
Abstract: A huge debate exists over the impact of risk-preferences and emotions on decision-making and performance in financial markets. Many scholars argue that emotions interfere with effective decision-making: however, other researchers argue that emotions and cognition are interlinked, and therefore emotions promote good decision-making. We explore the relationship between emotions, risk preferences, and financial market trading and performance. We developed and conducted a series of neuro-economic trading experiments, employing questionnaires (containing both quantitative and qualitative analysis) and neuro-economic techniques (such as GSR, heart rate monitoring, and eye-tracking equipment) whilst subjects engaged in a computerised stock-trading game (which resembled a bear market). We find key and striking results relating to the interaction between risk preferences, emotions and trading behaviour and performance.
