Emotional stress & decision-making: an emotional stressor significantly reduces loss aversion

Stress influences loss aversion, the principle that losses loom larger than gains, although the nature of this relationship is unclear. Studies show that stress reduces loss aversion; however, stress response has been only studied by means of physiological measures, but the stressor emotional impact remained unclear. Since emotions can modify stress response and increase the activity of the loss aversion neural substrates, it could be expected that an emotional stressor may produce the opposite effect, i.e. loss aversion increase. 69 participants were divided into experimental and control group. The first one was exposed to emotional stress through a 5-minutes video, and control group viewed a match-length distractor video. Physiological stress response was assessed by means of electrodermal activity (EDA), and both perceived stress, and negative affect (i.e. psychological stress response) were registered through questionnaires. Both groups performed a mixed gamble task, which allowed the extraction of loss aversion through a Bayesian-computational model. During and after video, experimental group had higher electrodermal activity, perceived stress, and negative affect than controls, suggesting that emotional stress induction was effective. However, rather than increasing, loss aversion of stressed participants was lower. These results constitute a new evidence of emotional stress influencing loss aversion and highlight that stress, regardless of its emotional impact, can reduce this phenomenon. These results should be considered when predicting risky decisions.

Automated summary

Studies indicate that emotional stress can decrease loss aversion, despite increasing stress response, thus the exact impact of stress on loss aversion remains unclear.