Eliciting risk and time preferences under induced mood states

We test whether induced mood states have an effect on elicited risk and time preferences in a conventional laboratory experiment. We jointly estimate risk and time preferences and find that both negative and positive mood states increase patience as well as risk aversion but the magnitude of the effects differs between mood states. Results also suggest that risk preferences are affected by whether a cognitively demanding task precedes a risk preference elicitation task but only when a negative mood was induced.