Abstract
The rational choice model presumes that individuals are rational and make optimizing decisions based on available information. Theory suggests that lack of information and risk (and risk perceptions) can alter decisions from the static perfect information case, but do not necessarily result in irrational decisions. Stress is another factor that may alter our perceptions and increase cognitive loading (increase the cost) of decision-making. Here, we use an experiment to induce stress and employ a simple ultimatum bargaining game to determine whether stress impacts economic decisions. Our results indicate that those exposed to stress (psychological, uncertainty or physiological, cold pressor task) significantly lower their gains (become less aggressive in bidding) than the control group. These results suggest that stress does, in fact, change behavior and leads to “hedging” behavior that lowers overall gains but increases the probability of success.
Zachary Hohman, Ph.D.
Associate Professor, Department of Psychological Sciences
The goal of my research is to integrate basic cognitive processes into social interactive processes, societal processes, individual process, and internal processes that explain individual health behavior.
Breanna Harris, Ph.D.
Assistant Professor
I am a behavioral endocrinologist studying how organisms physiologically and behaviorally respond to and cope with challenges (stressors).