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1 – 10 of 140
Article
Publication date: 4 November 2014

Gianni Brighetti, Caterina Lucarelli and Nicoletta Marinelli

The purpose of this paper is to explore how psychological variables are related to real-life insurance consumption. Specifically, the authors focus on whether emotions and…

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Abstract

Purpose

The purpose of this paper is to explore how psychological variables are related to real-life insurance consumption. Specifically, the authors focus on whether emotions and psychological traits can improve the predictability of insurance demand, taking traditional socioeconomic variables under control.

Design/methodology/approach

The approach used was in-person survey, based on a traditional questionnaire, the Barratt Impulsiveness Scale and a psycho-physiological task (Iowa Gambling Task (IGT)).

Findings

A selective role of emotions and psychological traits has been proven to exist when comparing different insurance policies. Life and casualty insurance are affected by emotional arousal to losses; indemnity insurance by fear of the unknown, whereas health insurance by impulsivity.

Research limitations/implications

The findings indicate that individual insurance consumption may be amplified by not cognitive components. Future research should concentrate on testing the effect of further psychological traits related to pure risk coverage.

Practical implications

The results may be of interest for insurers in order to know what drives insurance demand with respect to different kinds of pure risks.

Social implications

For policymakers, it is important to understand how psychological factors affect consumer behavior in order to incorporate such perspective into modern insurance policy measures. An analysis of such factors may also increase the self-consciousness of insurance consumers and enrich consumer self-protection.

Originality/value

The authors propose an interdisciplinary approach to analyze insurance demand and test different kinds of insurance coverage, suggesting not homogenous hedging behaviors in relation to specific ambiguous events.

Details

Review of Behavioral Finance, vol. 6 no. 2
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 19 June 2020

Corey A. Shank, Brice Dupoyet, Robert Durand and Fernando Patterson

The purpose of this paper is to examine the relationship between psychopathy and its underlying traits and financial risk and time preferences.

Abstract

Purpose

The purpose of this paper is to examine the relationship between psychopathy and its underlying traits and financial risk and time preferences.

Design/methodology/approach

The authors measure risk and time preferences using both the cumulative prospect theory and quasi-hyperbolic time discounting in a sample of business majors. The Psychopathic Personality Inventory – Revised test is then used to measure the global psychopathy and eight primary and two secondary traits of the sample of business majors. The measures of psychopathy are used as explanatory variables to model variation in subjects’ time and risk preferences.

Findings

The authors find that the overall score on the continuum of psychopathy is positively related to the linearity of the cumulative prospective utility function. A breakdown of psychopathy into its secondary and primary traits shows a more complex relation. For example, the secondary trait of self-centered impulsivity is statistically significant in models of financial risk preference determinants under the cumulative prospect theory. The authors find that the primary traits of self-centered impulsivity and stress immunity are related to a higher time preference discount rate under quasi-hyperbolic time preferences.

Originality/value

This paper adds to the literature on personality and financial decisions and highlights the importance of psychopathy in finance.

Details

Studies in Economics and Finance, vol. 38 no. 1
Type: Research Article
ISSN: 1086-7376

Keywords

Book part
Publication date: 21 November 2016

Corinna Laube and Wouter van den Bos

Teenagers are typically described as impulsive and risk taking. Yet recent research shows that this observation does not hold in all contexts. Rather, adolescents show higher…

Abstract

Teenagers are typically described as impulsive and risk taking. Yet recent research shows that this observation does not hold in all contexts. Rather, adolescents show higher impulsivity and risk taking than children or adults in affective contexts. Motivational and affective processes are therefore of particular interest when trying to understand typical adolescent behavior. Additionally, pubertal hormones are hypothesized to play a special role in adolescents’ motivated decision making. However, evidence for the mechanisms underlying this relationship is sparse. In this chapter, we aim to integrate findings from human and animal studies in order to elucidate the specific impact of pubertal hormones on motivational processes in adolescence. Against this background, we critically discuss and reinterpret recent findings in psychology and neuroscience, speculate about underlying mechanisms, and suggest new approaches for future studies of adolescent behavior.

Details

Recent Developments in Neuroscience Research on Human Motivation
Type: Book
ISBN: 978-1-78635-474-7

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Book part
Publication date: 1 December 2008

Andrei C. Miu, Mircea Miclea and Daniel Houser

Purpose – This chapter focuses on individual differences in anxiety, by reviewing its neurobiology, cognitive effects, with an emphasis on decision-making, and recent developments…

Abstract

Purpose – This chapter focuses on individual differences in anxiety, by reviewing its neurobiology, cognitive effects, with an emphasis on decision-making, and recent developments in neuroeconomics.

Methodology – A review and discussion of anxiety and decision-making research.

Practical implications – This chapter argues that by making the step from emotional states to individual differences in emotion, neuroeconomics can extend its neurobiological roots and outreach its current clinical relevance.

Value of chapter – This chapter contributes to the literature on individual differences in emotion and their effects on decision-making, which is increasingly important in mainstream behavioral economics and neuroeconomics.

Details

Neuroeconomics
Type: Book
ISBN: 978-1-84855-304-0

Book part
Publication date: 1 December 2008

Ming Hsu, Hung-Tai Lin and Paul E. McNamara

Purpose – Long-term care (LTC) services assist people with limitations in the ability to perform activities of daily living (ADLs) as a result of chronic illness or disabilities…

Abstract

Purpose – Long-term care (LTC) services assist people with limitations in the ability to perform activities of daily living (ADLs) as a result of chronic illness or disabilities. We discuss possible behavioral explanations for the under-purchasing of LTC insurance, as well as the current state of knowledge on the neural mechanisms behind these behavioral factors.

Findings/approach – Ideas from behavioral economics are discussed, including risk-seeking over losses, ambiguity-preferring over losses, hyperbolic discounting, and the effect of the aging process on the underlying neural mechanisms supporting these decisions. We further emphasize the role of age, as aging is a highly heterogeneous process. It is associated with changes in both brain tissue as well as cognitive abilities, and both are characterized by large individual differences. Therefore, understanding the neural mechanisms is vital to understanding this heterogeneity and identifying possible methods of interventions.

Research implications – LTC financing and insurance is a looming issue in the next 10–20 years. It is important to understand the process by which people make decisions about LTC insurance, heterogeneity in decision processes across individuals, and how these decisions interact with changes in policy and private LTC insurance markets.

Originality/value of the chapter – By providing an overview of the current state of knowledge in behavioral economics of LTC insurance and the neuroscience of aging, this chapter provides some new directions in the emerging area of neuroeconomics of aging.

Details

Neuroeconomics
Type: Book
ISBN: 978-1-84855-304-0

Article
Publication date: 15 March 2011

Dwane H. Dean

The prevalence of problematic gambling among adolescents and college‐age youth is estimated to be two to four times that of older consumers. Prior studies suggest this may be due…

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Abstract

Purpose

The prevalence of problematic gambling among adolescents and college‐age youth is estimated to be two to four times that of older consumers. Prior studies suggest this may be due to an age‐related difference in risk perception. This paper aims to focus on the perception of financial risk in playing casino blackjack among college‐age youth.

Design/methodology/approach

A convenience sample of subjects age 24 or less and reporting at least some experience in playing and wagering on casino blackjack completed paper and pencil questionnaires. Data were fit to a path model using LISREL. The study focuses on the perception of financial risk within this at‐risk population, suggesting that perceived financial risk is influenced by four factors: estimated risk to an average “other” gambler, the subject's level of experience in playing casino blackjack, the subject's self‐reported level of skill at blackjack play, and the estimated “fun” in playing the game.

Findings

Three significant total effects on perceived financial risk were found: estimated risk to an average other player (raising risk), estimated fun in playing the game (lowering risk), and self‐reported skill in playing the game (lowering risk). The effect of experience on risk perception was complex, separated into direct and indirect effects with opposing influences. The model explained 41 percent of variance in perceived risk. Subjects reported their own level of risk to be significantly lower than that for an average other blackjack player – an example of the phenomenon of optimistic bias.

Research limitations/implications

Data were not collected within a field (casino) setting and the influence of the setting on perceived financial risk was not accounted for.

Practical implications

The strongest influence on perceived personal risk was estimated risk to an average other gambler (raising risk). Communications attempting to deter youthful gambling might wish to portray an average young player and possible negative outcomes.

Originality/value

There does not appear to be an existing path model of risk in casino blackjack that includes the factors proposed in this study.

Details

Young Consumers, vol. 12 no. 1
Type: Research Article
ISSN: 1747-3616

Keywords

Article
Publication date: 17 June 2020

Mrinalini Srivastava, Gagan Deep Sharma, Achal Kumar Srivastava and S. Senthil Kumaran

Neuroeconomics and neurofinance are emerging as intriguing fields of research, despite sharing ambiguity with the concepts of neuroscience. The relationship among the concepts of…

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Abstract

Purpose

Neuroeconomics and neurofinance are emerging as intriguing fields of research, despite sharing ambiguity with the concepts of neuroscience. The relationship among the concepts of economics, finance and neuroscience is not explicitly defined in the past literature, which distorts the use of neuroeconomics and neurofinance approaches in real-world practice for financial decision-making. The purpose of this paper is to consolidate the literature in the field of neuroeconomics and neurofinance to set up the research agenda for the upcoming scholarship in the field.

Design/methodology/approach

The purpose of this paper is to consolidates the extant literature in the fields of neuroeconomics and neurofinance by conducting an extensive systematic literature review to investigate the current state and define the relationship between economics, finance and neuroscience.

Findings

This paper identifies and explains the explicit relationship between different sub-fields of neuroscience with neuroeconomics and neurofinance and providing instances for future research studies.

Originality/value

The exclusive and extensive literature survey in the form of systematic literature review is undertaken for understanding the fields of neuroeconomics and neurofinance and is the key highlight of this paper. Another, interesting fact lies with matching the literature in neuroeconomics and neurofinance with further sub-fields of neuroscience such as neurophysiology, neuroanatomy, molecular neuroscience and cognitive neuroscience.

Details

Qualitative Research in Financial Markets, vol. 12 no. 4
Type: Research Article
ISSN: 1755-4179

Keywords

Book part
Publication date: 1 December 2008

Warren K. Bickel and Richard Yi

Conceptual paper purpose – The purpose of this chapter is to examine a new conceptual model of addiction and interpret the results from delay discounting studies in light of this…

Abstract

Conceptual paper purpose – The purpose of this chapter is to examine a new conceptual model of addiction and interpret the results from delay discounting studies in light of this new perspective.

Methodology/approach – To accomplish this we (1) introduce this new conceptual model, (2) briefly review executive function, including evidence for executive dysfunction among the addicted, (3) describe the unique relationship of temporal discounting to the new model and executive dysfunction, and (4) reinterpret the discounting literature in light of this new conceptual model.

Findings – Addicted individuals discount the future more than controls. This is consistent with greater relative activation of the impulsive system and decreased relative activation of the executive system. It also supports the new conceptual model of addiction.

Research implications – The new model provides a model for understanding the observations from the broader area of research in temporal discounting.

Originality/value of chapter – Given the view of executive function as important for the cross-temporal organization of behavior, we think that temporal discounting, the valuing of future commodities, qualifies this process to be included as an executive function.

Details

Neuroeconomics
Type: Book
ISBN: 978-1-84855-304-0

Book part
Publication date: 1 December 2008

Lisbeth Nielsen and John W.R. Phillips

Purpose – This chapter offers an integrative review of psychological and neurobiological differences between younger and older adults that might impact economic behavior. Focusing…

Abstract

Purpose – This chapter offers an integrative review of psychological and neurobiological differences between younger and older adults that might impact economic behavior. Focusing on key health economic challenges facing the elderly, it offers perspectives on how these psychological and neurobiological factors may influence decision-making over the life course and considers future interdisciplinary research directions.

Methodology/approach – We review relevant literature from three domains that are essential for developing a comprehensive science of decision-making and economic behavior in aging (psychology, neuroscience, and economics), consider implications for prescription drug coverage and long-term care (LTC) insurance, and highlight future research directions.

Findings – Older adults face many complex economic decisions that directly affect their health and well-being, including LTC insurance, prescription drug plans, and end of life care. Economic research suggests that many older Americans are not making cost-effective and economically rational decisions. While economic models provide insight into some of the financial incentives associated with these decisions, they typically do not consider the roles of cognition and affect in decision-making. Research has established that older age is associated with predictable declines in many cognitive functions and evidence is accumulating that distinct social motives and affect-processing profiles emerge in older age. It is unknown how these age differences impact the economic behaviors of older people and implies opportunities for path-breaking interdisciplinary research.

Originality/value of the chapter – Our chapter looks to develop interdisciplinary research to better understand the causes and consequences of age-related changes in economic decision-making and guide interventions to improve public programs and overall social welfare.

Details

Neuroeconomics
Type: Book
ISBN: 978-1-84855-304-0

Article
Publication date: 6 July 2010

Gabriele Lakomski and Colin W. Evers

The purpose of this paper is to argue that emotion has a central role to play in rational decision making based on recent research in the neuroanatomy of emotion. As a result…

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Abstract

Purpose

The purpose of this paper is to argue that emotion has a central role to play in rational decision making based on recent research in the neuroanatomy of emotion. As a result, traditional rational decision‐making theories, including Herbert Simon's modified model of satisficing that sharply demarcates emotions and values from rationality and rational decision making, need substantial revision. The paper concludes by outlining some central features of a theory of emotional decisions that is biologically more realistic than the traditional rationalist‐cognitive model.

Design/methodology/approach

The paper employs contemporary scientific as well as traditional philosophical criteria in its argumentation. Methodologically, it can be described as an example of applying naturalistic philosophy to a central issue of human thought and experience, and how humans are able to value things at all on the basis of their neuroanatomy.

Findings

The paper presents some initial features of a new theory of emotional decisions that is biologically more realistic than the traditional rationalist‐cognitive model.

Originality/value

The significance and originality of this paper lies in the fact that it proposes causal investigations of the real bases for rational decision making as a central human feature which runs counter to conventional wisdom and has far reaching implications for education, to name just one discipline; it demonstrates the importance and necessity of interdisciplinary research; and it outlines an exciting new research agenda that promises to be more productive in terms of understanding and hence planning for, the way in which humans make decisions.

Details

Journal of Educational Administration, vol. 48 no. 4
Type: Research Article
ISSN: 0957-8234

Keywords

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