Emotions and financial risk‐taking in the lab: A meta‐analysis

Abstract This paper is a meta‐analysis of experimental studies dealing with the impact of incidental emotions (happiness, sadness, fear, and anger) on financial risk‐taking, so as to explain traditional heterogeneity of outcomes in the literature. After devising a standard search strategy and including studies that comply with a list of eligibility criteria, we code 114 effect sizes at the treatment level from 26 selected articles, and a battery of moderator variables representing design and sample characteristics. Meta‐regressions with adjusted predictions find causal impact of fear on risk aversion, albeit to a small extent. On the contrary, average null effects characterize happiness, sadness, and anger. It also turns out that when studies provide financial incentives, country‐level individualism moderates the relationship between emotions and risk‐taking by increasing risk propensity. We discuss possible interpretations of our findings.