Transcript Slide 1
NCCR Finrisk
Doctoral Workshop, June 12, 2006, Gerzensee
Emotions
meet
Finance
Klaus Scherer
Astrid Hopfensitz
The many fathers of affective science
The affective revolution:
Nobel prizes in Economics
Herbert Simon, 1978
bounded rationality,
emotions as interrupts
Amartya Sen, 1998
affectice aspects of commitment
and justice
Daniel Kahneman, 2002
heuristics, affective bases of
judment and decision
Reinhard Selten, 1994
affect in non-cooperative games
Vernon Smith, 2002
experimental economics
R. J. Aumann T. C. Schelling, 2005
conflict and cooperation, game-theory analysis
Objectives of the NCCR in Affective Sciences
Scientific research in the behavioral, human, and social sciences
Establish a truly interdisciplinary network of researchers studying
affective phenomena
Address affect and emotion for the first time in a systematic and
integrated way, on multiple levels of analysis
Encourage cutting-edge research on emotion, using advanced
methodology
Academic education and research training
Increase the critical mass of excellent researchers with interdisciplinary
training and a strong ability for networking
Furthering the academic advancement of women
Knowledge transfer and application in society
Identify means for a realistic transfer and application of scientific
understanding of emotional phenomena
Provide pertinent data and insights to orient political, social, and
economic decisions
Existing research networks in Affective Sciences:
Critical mass in Swiss universities
Zurich
Psychology
Neuchâtel
Sociology
Lausanne
Psychology
Psychology
Education
Law
Philosophy
Geneva
Psychiatry
Sociology
Bern
Fribourg
Criminology
Political
Science
Psychology
Neuroscience
History of
religion
Literature
Philosophy
Economics
Component process model
Appraisal and efferent motor expression
Attention
Event
Memory
Relevance
this is novel
and important
Motivation
Implication
this will obstruct
my goals
Reasoning
Self Concept
Coping
Normative
Significance
I can deal
with this
this is unfair
and immoral
What is the mechanism that produces facial expressions?
An innate affect program that
produces an emotion-specific
pattern when triggered by an
event?
Watch now!
OR
A sequential unfolding of facial
movements resulting from
successive appraisals of the
situation?
Watch now!
The apex of the expression is the same but the process is different.
Research on the dynamics of facial expression is required to settle this
question that has important theoretical implications.
Projects and transversal modules
Emotion elicitation
and perception
Emotion regulation
Social functions of
emotion
Appraisal and Motivation
Scherer/Gendolla
Regulation and Family
Perrez/Reicherts
Norm compliance
Fehr
Response patterning
Scherer/Kaiser
Work and Emotions
Semmer/Tschan
Values and Norms
Mulligan
Neural architecture
Vuilleumier/Landis
Executive functions
Van der Linden
Emotions and Law
Flückiger/Robert/Roth
Myths and Rites
Borgeaud
Pro- and antisocial affect and behavior
The nature and consequences of gender differences
Life-span development and transitions
Methodological development
Project 1
Appraisal and motivational processes
in the elicitation of emotion
Klaus Scherer & Guido Gendolla
University of Geneva, Psychology
The elicitation of emotional experience is explained by the current
motivational state and the process of subjective appraisal of events.
Topics include:
The dynamic unfolding of the appraisal process
The role of motivation for mobilization of effort and the appraisal of
performance outcomes
Dispositional biases in appraisal
Social and cultural dimensions of appraisal
Project 1 meets Finance
Finance professionals may face specific conditions for appraisal: High
stakes, uncertain consequences, high urgency, limited control and
coping ability, conflicting norms and expectations.
Potential research topics:
Appraisal biases in investors: Myopic loss aversion
How traders appraise significant events
Trader types: Dispositional appraisal biases
Emotional climate in the stock market due to shared appraisals
The role of attention in continuously ongoing appraisal processes
Skills in appraising client reactions
Project 2
Response patterning
Klaus Scherer & Susanne Kaiser
University of Geneva, Psychology
Emotional response patterning is expected to be driven by successive
appraisal outcomes.
Topics include:
Experimental manipulation of appraisal criteria and measurement
of the effects on different response domains
The relationship between gestural, facial, vocal and postural
expression of emotions
Measurement of gestural, facial, vocal and postural expression in
dyadic interaction
Project 2 meets Finance
The special nature of the appraisal processes in finance contexts
may generate specific types of response patterning with respect to
motor expression, physiology, and conscious feelings.
Potential research topics:
Mode synchronization given rapid reappraisals
Emotional competence in response regulation generating trust
Emotional competence in recognizing others' emotions
Emotion work with clients
Emotional contagion on markets: emotions can spread
Illustrative studies
Lo and Repin, The Psychophysiology of Real-Time Financial Risk
Processing, Journal of Cognitive Neuroscience, 2002
- Measure physiological reactions during real trading
- Combine these observations with market data
Findings:
- Differences in physiological reactions dependent on behavior of market.
- Individual differences between traders.
Illustrative studies
Analysis difficult in such ‘real’ decision situations.
- It is difficult to infer emotions exclusively from physiological measures
- Emotional reactions spill over from one situation to the next. Difficult to
disentangle effects.
- Situation often involves many factors unknown to researcher.
Therefore most studies have focused on risk taking for simple gambles
• Bosman and van Winden, Global risk, Effort, and Emotions in an Investment
Experiment, 2001
• Hopfensitz and van Winden, Dynamic Choice, Independence and Emotions, 2006
Findings:
project
A
project
B
p = 1/2
- Dependent on risk: different emotions are considered
- Dependent on situation: same emotions have different effects.
0
(1- p) =
1/2
Project 3
Neural architecture of emotion
perception and affect-related cognition
Patrik Vuilleumier & Theodor Landis
University of Geneva, Neuroscience
Examining the cerebral bases (anatomical and temporal patterns) of
affective and social perception, using brain-imaging techniques.
Topics include:
Brain activation in response to faces displaying different emotions
and to the subjective appraisal of their affective value in different
contexts
The role of attention in affective processing
Neural bases of cognitive control and individual differences in
emotional processing
Project 3 meets Finance
Neurofinance: What are the underlying neural mechanisms in
risk assessment, utility inference, and decision making
Potential research topics:
Neural bases of intuition
How is risk interpreted in the brain, e.g. in ‘Gambling Tasks’
Neural bases of individual differences: Impulsivity,
sensation seeking
Hyperbolic discounting: immediate gratification is special
(McClure et al 2004, Science)
Risk versus Ambiguity: different neuronal reactions
Project 4
Individual and social regulation
of emotions in the family
Meinrad Perrez & Michael Reicherts
University of Fribourg , Psychology
Understanding emotion regulation as underlying processes of proand antisocial behavior, with a particular emphasis on affective
relationships in the family.
Topics include:
Elaboration of a taxonomy of individual and social emotion
regulation behaviors
The effects of different types of social emotion regulation
responses in daily couple and family interaction on parents’
well-being, parenting, and child behavior
Defining behavioral rules for adaptive social emotion regulation
Project 4 meets Finance
Given the high level of stress and emotionality of work in
finance, stress resilience and adequate coping strategies are at
a premium. So is social regulation in the work team and the
family.
Potential research topics:
Asssessing patterns of stress experiences and resilience
Emotional competence in individual and social regulation
Adequate assessment of coping potential
Advanced methods of experience sampling
Project 5
Work and emotions: Effects on
well-being, health, and productivity
Norbert Semmer & Franziska Tschan
University of Bern; University of Neuchâtel, Psychology
Examining working conditions in terms of job design and social
relationships as they relate to affective experience, especially
stress.
Topics include:
Assessment of working conditions, personal characteristics,
social relations, work-life balance, and private stressors and
resources
Measuring the effects on health, well-being, attitudes, and
commitment toward one’s organization in a major
longitudinal survey and in-depth studies
Project 5 meets Finance
Finance professionals work in challenging environments at a
high level of pressure and risk. In addition to difficult working
conditions often their self is at stake.
Potential research topics:
Competition and envy: influence on risk taking
Burnout and emotional work
Funds managers: impact of shame / guilt on behavior
Spill over of emotions from work – life, or from work – work
Values and the role of the self
Project 6
Emotion regulation, impulsivity,
and executive functions
Martial Van der Linden
University of Geneva , Psychology
Impulsivity as an important aspect of self-regulation.
Topics include:
The different components of impulsivity
The various cognitive processes (and related brain
substrates) that contribute to these dimensions of
impulsivity
The development of impulsivity in adolescence and its
contribution to the development of antisocial behaviors
Project 6 meets Finance
Given the time pressure and urgency of decisions as well as
high stakes, personality dispositions in impulsivity may play a
significant role.
Potential research topics:
Executive space in cognitive processing
Factors and components of impulsivity
Can hyper-impulsivity be treated?
Impulsivity and anti-social behavior
Project 7
Emotional foundations of norm
compliance and norm enforcement
Ernst Fehr
University of Zurich, Behavioral Economics
The role of emotions in the pro- and antisocial behavior
of ordinary people and criminal offenders.
Topics include:
Which emotions are involved in norm compliance and enforcement ?
What is the neural basis of norm compliance and enforcement ?
Do criminal offenders exhibit fewer or different emotions when
compared with non-criminal control groups ?
Does the pattern of brain activation associated with norm compliance
and norm violation in criminal offenders differ from the pattern in
non-criminal controls ?
Project 7 meets Finance
Neuroeconomics and Neurofinance – the neural basis of
normative behavior and equity decisions.
Potential research topics:
In many market settings contracts are not enforceable:
necessity of prosocial emotions (trust)
The ‘just world’ phenomenon (Melvin Lerner)
Please ask Ernst Fehr!
Project 8
Emotion, values, and norms
Kevin Mulligan
University of Geneva, Philosophy
Evaluation of the presuppositions embodied in the conceptual
frameworks used in current work on affective phenomena using
conceptual analysis, discussion of examples, and theory
construction.
Topics include:
Are affective phenomena simply by-products of desires?
Are emotions appraisals?
Are norms more fundamental than values?
What is the relation between guilt and norm violation?
Project 8 meets Finance
Philosophy may help to examine some fundamental issues
concerning the nature of appraisal and emotional reactions in
finance contexts .
Potential research topics:
The role of values and utility
Conflict between norms and desires
Sources of shame and guilt (e.g., in investment consulting
Project 9
The importance of emotions
in social and legal regulation
Alexandre Flückiger, Christian-Nils Robert,
& Robert Roth
University of Geneva, Law
Law may be strongly based on reason, but it is not immune to
emotion. The project explores the currently observable
“emotionalization of law”.
Topics include:
Law as the product of emotion. e.g., the growing importance of
victims in legal proceedings
Emotion as a support for, or even a means of regulating social
behaviors, e.g. the promotion of organ donor campaigns as an
example of “soft law”
Project 9 meets Finance
The legal context of finance and its emotional ramifications.
Potential research topics:
Soft law – regulation and control in financial markets
Insider trading and popular response
Project 10
Myths and rites as cultural
expression of emotion
Philippe Borgeaud
University of Geneva, History of Religion
Myths and rites from ancient societies afford an ideal humanistic
laboratory for an objective analysis of emotions in their relationship
to normative and disruptive standards of behaviors.
Topics include:
The study of ancient literary descriptions and iconographical
representations of emotions in Egypt, Mesopotamia, Israel,
Greece, Rome, as well as in ancient Christianity and Islam, with
some incursions into Far Eastern cultures
A comparative reflection on the anthropology of the person : selfdefinitions of the human (generally males) in contrast to
definition of the "others" (strangers, females, or gods)
Project 10 meets Finance
Historical and anthropological issues
Potential research topics:
History of trust in markets (e.g. diamond traders, …)
Religious constraints of financial activity
Social values and intrecultural differences
Transversal modules: overview and aims
Four transversal modules integrate overarching issues into the research
design of several projects, consider the implications of different studies for
knowledge transfer and application, and synthesize the relevant results.
Pro- and antisocial behavior
Study determinants of prosocial and antisocial behavior and underlying
mechanisms.
Gender differences
Systematically assess gender differences in all empirical studies and diagnose
potential causes. Identify remedial action on the basis of the results.
Life span development
Assess age group differences whenever possible. Diagnose potential causes due
to changes in cognitive development, socialization, motivation, etc. Identify risk
factors and potential for remedial action.
Advanced methods
Identify common methodological needs. Develop and share a comprehensive
method toolbox. Promote mutual fertilization of methodological approaches.
Focussed interdisciplinarity
Common focus of research: affect
Participation of most relevant disciplines
Multiple levels of analysis
Transversal integration of
NeuroPsychological
perspectives
physiological
Unified concepts, methods, and tools
Collaboration with major international centers of
learning and research Historical
Interpersonal
Social/
Cultural
Group
dynamics
Added value through synergy
The added value specific to the NCCR is achieved through
four mechanisms:
1. Export/Import of competences: No project can be
carried out as planned without the collaboration of other
NCCR members
2. Transversal modules: Cross-project syntheses will be
achieved for four important thematic areas
3. Inter-project studies: Ideas for new collaborative
research between projects are constantly emerging
4. Interdisciplinary education and training program:
Fundamental research perspectives are evolving
The future of emotion
The members of the NCCR will also address challenging issues
with respect to the evolution of ancient emotion mechanisms in
modern society, such as:
Is shame disappearing as a consequence of growing hedonism,
feelings of entitlement, and demands for individual freedom from
social constraints?
How does the development of ever more efficient forms of
communication and entertainment affect emotion and emotion
regulation?
How will emotional avatars change our relationship to machines?
Could social and technological progress overtax the inherent
flexibility of the emotion mechanism and outrun its evolution?
Further info: www.affective-sciences.org