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Economic Forecasts and Physiological Arousal in the Losses Domain

Fri, May 25, 8:00 to 9:15, Hilton Old Town, Floor: M, Mozart II

Abstract

Economic forecasts like the ones we regularly encounter in the media seem to also matter for how people make economic decisions, especially when the economy is in recession. A psychological account for this phenomenon is underrepresented in current literature. In the present study we test whether economic forecasts can affect decision-making in the domain of avoiding losses. We are further interested in addressing the role of physiological arousal as a result of economic forecasting, as measured by electrodermal activation (EDA) during performance in the BART, a paradigm designed to measure economic risk-taking behavior. Behavioural results suggest strong effects of economic forecasting, when people are in the state of avoiding losses and EDA analyses will be available before the upcoming conference in Prague.

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