Emotional news stories have a strong impact on men’s financial decisions, according to new research.
The study, which involved academics from Bournemouth University and the Universities of Essex and Nottingham, revealed that men are far more likely than women to let emotions from one situation carry over into unrelated risky decisions.
After watching real-life negative news stories, men actively avoided financial risks even when the decisions were completely unrelated to the news. This suggests the existence of what is called an emotional carryover effect. However, this was not true for women, whose decisions were unaffected by the same emotion-laden news.
“These results challenge the long-held stereotype that women are more emotional and opens new avenues for understanding how emotions influence decision making across genders,” said lead researcher Dr Nikhil Masters, from Essex’s Department of Economics.
In the study, 186 people watched emotional news stories and were then asked to make risky financial decisions with real money. Women’s financial decisions remained unaffected by the emotional tone of the news, while men showed a clear tendency to reign in their naturally risk-loving behaviour and played it safe.
“Interestingly, women’s financial decisions remained unaffected by the negative news, despite recording a more intense emotional reaction to the news itself.” Professor Tim Lloyd from Bournemouth University’s Business School noted.
The findings from this study could shape advice for high-stakes financial decisions.
“We don’t make choices in a vacuum and a cooling-off period might be crucial after encountering emotionally charged situations, especially for life-changing financial commitments like buying a home or large investments,” Dr Masters added.
The research team, now wants to investigate why only men’s financial decisions are affected by these emotional carryover effects.
“It may be that women’s decision-making is more resilient in the face of emotional stress because they tend to possess better awareness of their emotions, which previous research has shown helps people to manage them.” said Professor Lloyd.
The paper has been published in the Journal of Behavioral and Experimental Economics.
