The Effect of Emotional Cues on Making Economic Decisions under Uncertainty

S. Bromuri; Mahdi Ebrahim; Y.D. Iren; P Geelen

The Effect of Emotional Cues on Making Economic Decisions under Uncertainty

S. Bromuri, Mahdi Ebrahim, Y.D. Iren, P Geelen

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Research output: Contribution to conference › Paper › Academic

Abstract

We investigate the understudied role of emotions on investors’ decision. Specifically, we identify six basic human emotions (i.e. happiness, sadness, surprise, fear, anger, and disgust) expressed by S&P 500 CEOs during their earning conference calls and examine their effects on financial analysts’ decisions (i.e. retain, buy or sell shares). To identify CEOs' emotions in more than 500 calls we developed a deep learning algorithm trained by experts annotating vocal data in a subset of calls. Our findings shed light on underlying emotional mechanisms of financial decision-making under uncertainty, thereby contributing to behavioral economic theory.

Original language	English
Publication status	Published - 6 Nov 2018
Event	INFORMS Annual Meeting - Phoenix Convention Center, Sheraton Phoenix Downtown Hotel, Hyatt Regency Phoenix, and Renaissance Phoenix Downtown Hotel, Phoenix, United States Duration: 4 Nov 2018 → 7 Nov 2018 http://meetings2.informs.org/wordpress/phoenix2018/

Conference

Conference	INFORMS Annual Meeting
Country/Territory	United States
City	Phoenix
Period	4/11/18 → 7/11/18
Internet address	http://meetings2.informs.org/wordpress/phoenix2018/

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Cite this

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AU - Iren, Y.D.

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N2 - We investigate the understudied role of emotions on investors’ decision. Specifically, we identify six basic human emotions (i.e. happiness, sadness, surprise, fear, anger, and disgust) expressed by S&P 500 CEOs during their earning conference calls and examine their effects on financial analysts’ decisions (i.e. retain, buy or sell shares). To identify CEOs' emotions in more than 500 calls we developed a deep learning algorithm trained by experts annotating vocal data in a subset of calls. Our findings shed light on underlying emotional mechanisms of financial decision-making under uncertainty, thereby contributing to behavioral economic theory.

AB - We investigate the understudied role of emotions on investors’ decision. Specifically, we identify six basic human emotions (i.e. happiness, sadness, surprise, fear, anger, and disgust) expressed by S&P 500 CEOs during their earning conference calls and examine their effects on financial analysts’ decisions (i.e. retain, buy or sell shares). To identify CEOs' emotions in more than 500 calls we developed a deep learning algorithm trained by experts annotating vocal data in a subset of calls. Our findings shed light on underlying emotional mechanisms of financial decision-making under uncertainty, thereby contributing to behavioral economic theory.

M3 - Paper

T2 - INFORMS Annual Meeting

Y2 - 4 November 2018 through 7 November 2018

ER -

The Effect of Emotional Cues on Making Economic Decisions under Uncertainty

Abstract

Conference

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