YIG Emotions in Markets
Zentraler Untersuchungsgegenstand der Young Investigator Group (YIG) „Emotions in Markets“ ist das menschliche Entscheidungsverhalten im Kontext von elektronischen Märkten. Hierbei stehen zum einen die emotionalen Faktoren im Entscheidungsprozess und zum anderen die Wechselwirkung des Entscheidungsträgers mit moderner Informationstechnik im Vordergrund. Zur Untersuchung dieser Zusammenhänge werden insbesondere psychophysiologische Mes-sungen in ökonomischen Laborexperimenten durchgeführt. Mit Hilfe der Messung psycho-physiologischer Parameter, wie bspw. der Herzrate oder dem Hautleitwert, können direkte Korrelate von Emotionen erhoben werden. Komplementär ergänzt werden diese Studien im Einzelnen durch Blickrichtungsmessungen, Fragebögen, sowie die Analyse von Felddaten. Die YIG „Emotions in Markets“ konzentriert sich dabei insbesondere auf das Entscheidungs-verhalten von Menschen auf Konsumentenmärkten und auf Finanzmärkten. Im Kontext von Konsumentenmärkten soll untersucht werden, wie sich sowohl die ökonomische Gestaltung eines Marktes, als auch das User-Interface-Design auf das Verhalten und die Emotionen von Konsumenten auswirken. Des Weiteren wird analysiert, inwieweit sich systematische inter-personelle Unterschiede, und damit Kategorien der Konsumenten herausbilden. Im Kontext von Finanzmärkten steht der Dispositionseffekt im Vordergrund. Darunter versteht man die Tendenz Gewinnpositionen verfrüht zu verkaufen und Verlustpositionen zu lange zu halten. Dieser Effekt wirkt sich sowohl auf die individuelle Bilanz, als auch auf die Markteffizienz negativ aus.
Emotions in Markets Publications

1
Adam, M. T. P.; Kroll, E.; Teubner, T. 2014
A note on coupled lotteries. Economics Letters 124(1). 69–99.
doi:10.1016/j.econlet.2014.04.024
@Article{CitationKey,
author = {Adam, Marc T. P. and Kroll, Eike and Teubner, Timm},
title = {{A note on coupled lotteries}},
journal = {Economics Letters},
year = {2014},
volume = {124},
pages = {69-99},
number = {1},
doi = {10.1016/j.econlet.2014.04.024},
abstract = {We study the impact of coupling a decision maker’s lottery payoffs
to those of a peer on the preferred level of risk by means of a lab experiment.
Compared to the benchmark where the lotteries are paid off individually,
symmetrically coupled payoffs increase the willingness to take risks, whereas
asymmetrically coupled payoffs have the opposite effect. Moreover, subjects
with consistent choices in the different conditions behave more risk averse
than subjects with inconsistent behavior.}}

					
 
2
Astor, P. J.; Adam, M. T. P.; Jerčić, P.; Schaaff, K.; Weinhardt, C. 2013-14
Integrating biosignals into information systems: A NeuroIS tool for improving emotion regulation. Journal of Management Information Systems 30(3). 247–278.
doi:10.2753/MIS0742-1222300309
@Article{CitationKey,
author = {Astor, Philipp J. and Adam, Marc T. P. and Jerčić, Petar and Schaaff,
Kristina and Weinhardt, Christof},
title = {{Integrating biosignals into information systems: A NeuroIS tool for
improving emotion regulation}},
journal = {Journal of Management Information Systems},
year = {2013-14},
volume = {30},
pages = {247-278},
number = {3},
doi = {10.2753/MIS0742-1222300309}}

					
 
3
Schaaff, K.; Adam, M. T. P. 2013
Measuring emotional arousal for online applications: Evaluation of ultra-short term heart rate variability. ACII 2013 Proceedings.
@Inproceedings{CitationKey,
author = {Schaaff, Kristina and Adam, Marc T. P.},
title = {{Measuring emotional arousal for online applications: Evaluation of
ultra-short term heart rate variability}},
booktitle = {ACII 2013 Proceedings},
year = {2013}}

					
 
4
Gimpel, H.; Adam, M. T. P.; Teubner, T. 2013
Emotion regulation in management: Harnessing the potential of NeuroIS tools. ECIS 2013 Proceedings, Utrecht, The Netherlands. (Utrecht, The Netherlands). 1–7.
http://www.staff.science.uu.nl/~Vlaan107/ecis/files/ECIS2013-0245-paper.pdf
@Inproceedings{CitationKey,
author = {Gimpel, Henner and Adam, Marc T. P. and Teubner, Timm},
title = {{Emotion regulation in management: Harnessing the potential of NeuroIS
tools}},
booktitle = {ECIS 2013 Proceedings, Utrecht, The Netherlands},
year = {2013},
address = {Utrecht, The Netherlands},
pages = {1-7},
url =
{http://www.staff.science.uu.nl/~Vlaan107/ecis/files/ECIS2013-0245-paper.pdf},
abstract = {Management decisions are taken by human beings, not by robots.
Consequently, management decisions, and of course also the respective managers,
are affected by emotions. Thus, they rely on accurate emotional processing.
Research on decision making has shown that individuals with high emotion
regulation capabilities perform better in taking effective decisions. Managers
perpetually have to take rapid decisions in fast-paced environments, between
the poles of diverse interests and motives of colleagues, customers, partners,
and rivals. Sophisticated management is the key to any business. Therefore,
we argue that IS research should build on the advances in cognitive neuroscience
and harness the potential of NeuroIS tools in the field of management support.
In this paper, we propose a conceptual framework and taxonomy for how NeuroIS
tools may support managers in taking effective decisions by firstly improving
their emotion regulation capabilities and, secondly, providing them with real-time
feedback and decision support based on physiological measurements. Based on
the framework, we outline a specific application for how emotions can affect
decision making in the dynamic process of negotiations and for how NeuroIS
research can contribute to a better understanding of the underlying visceral
processes.}}

					
 
5
Astor, P. J.; Adam, M. T. P.; Jähnig, C.; Seifert, S. 2013
The joy of winning and the frustration of losing: A psychophysiological analysis of emotions in first-price sealed-bid auctions. Journal of Neuroscience, Psychology, and Economics 6(1). 14–30.
doi:10.1037/a0031406
http://psycnet.apa.org/journals/npe/6/1/14
@Article{CitationKey,
author = {Astor, P. J. and Adam, Marc T. P. and J\"{a}hnig, Caroline and Seifert,
Stefan},
title = {{The joy of winning and the frustration of losing: A psychophysiological
analysis of emotions in first-price sealed-bid auctions}},
journal = {Journal of Neuroscience, Psychology, and Economics},
year = {2013},
volume = {6},
pages = {14-30},
number = {1},
doi = {10.1037/a0031406},
url = {http://psycnet.apa.org/journals/npe/6/1/14},
abstract = {Research on emotions suggests that auction outcomes may elicit an
aversive “frustration of losing,” as well as a rewarding “joy of winning”
response. However, little is known about the intensity of these emotional
reactions and how they relate to other factors in the auction process. In this
paper, we present an experiment in which subjects participated in a sequence
of first-price sealed-bid (FPSB) auctions. The psychophysiological measures
skin conductance response (SCR) and heart rate (HR) were recorded as proxies
for both the intensity and the valence of emotions. Our results show that the
deceleratory responses in HR when losing an auction are stronger than when winning
an auction. The drop in HR itself can be interpreted as a reaction to stimuli
with negative emotional valence. Moreover, we found that winning an auction
induces a stronger SCR compared to losing an auction. Interestingly, this effect
even holds for different value classes and different amounts of payoffs. Moreover,
we can show that bidders’ SCR.amp increase in the relation to the amount of
money at stake. However, we cannot make a definite determination as to whether
the valuation triggers this effect or the potential nominal payoff. We conclude
that psychophysiological methodologies are appropriate for the measurement of
rewarding, as well as immediate aversive emotions in market decision making,
and even allow identifying fined-grained emotional characteristics.}}

					
 
6
Adam, M. T. P.; Krämer, J.; Weinhardt, C. 2012–13
Excitement up! Price Down! Measuring Emotions in Dutch Auctions. International Journal of Electronic Commerce 17(2). 7–39.
doi:10.2753/JEC1086-4415170201
@Article{CitationKey,
author = {Adam, Marc T. P. and Kr\"{a}mer, Jan and Weinhardt, Christof},
title = {{Excitement up! Price Down! Measuring Emotions in Dutch Auctions}},
journal = {International Journal of Electronic Commerce},
year = {2012–13},
volume = {17},
pages = {7-39},
number = {2},
doi = {10.2753/JEC1086-4415170201},
abstract = {Recently Internet auction sites have begun to compete in emotions
by advertising the fun and excitement that bidders may experience during auction
participation. The implicit conjecture inherent in these advertisements is that
consumers derive a hedonic value from auction participation that makes exciting
auctions more attractive and possibly induces bidders to stay active longer
in the auction. We test this conjecture in a controlled economic laboratory
experiment in which we also measure bidders’ physiological arousal in terms
of heart rate and skin conductivity as proxies for their excitement during auction
participation. In particular, we conduct a series of descending price (Dutch)
auctions with different clock speeds and find that in fast Dutch auctions bidders
(i) are more excited and (ii) stay longer in the bidding process. Moreover,
the unpleasant event of losing a Dutch auction is experienced more strongly
than the rewarding event of winning. As our results show that bidders’ excitement
is directly reflected in final prices, Internet auction sites should carefully
consider how the emotions elicited on their platforms affect bidding behavior.}}

					
 
7
Adam, M. T. P.; Kroll, E. 2012
Physiological Evidence of Attraction to Chance. Journal of Neuroscience, Psychology, and Economics 5(3). 152–165.
doi:10.1037/a0029513
http://psycnet.apa.org/journals/npe/5/3/152
@Article{CitationKey,
author = {Adam, Marc T. P. and Kroll, Eike},
title = {{Physiological Evidence of Attraction to Chance}},
journal = {Journal of Neuroscience, Psychology, and Economics},
year = {2012},
volume = {5},
pages = {152-165},
number = {3},
doi = {10.1037/a0029513},
url = {http://psycnet.apa.org/journals/npe/5/3/152}}

					
 
8
Jercic, P.; Astor, P. J.; Adam, M. T. P.; Hilborn, O.; Schaaff, K.; Lindley, C.; Sennersten, C.; Eriksson, J. 2012
A serious game using physiological interfaces for emotion regulation training in the context of financial decision-making. Proceedings of the 20th European Conference on Information Systems (ECIS). (Barcelona, Spain). 1–14.
http://aisel.aisnet.org/ecis2012/207/
@Inproceedings{CitationKey,
author = {Jercic, Petar and Astor, Philipp J. and Adam, Marc T. P. and Hilborn,
Olle and Schaaff, Kristina and Lindley, Craig and Sennersten, Charlotte and
Eriksson, Jeanette},
title = {{A serious game using physiological interfaces for emotion regulation
training in the context of financial decision-making}},
booktitle = {Proceedings of the 20th European Conference on Information Systems
(ECIS)},
year = {2012},
address = {Barcelona, Spain},
pages = {1-14},
url = {http://aisel.aisnet.org/ecis2012/207/}}

					
 
9
Adam, M. T. P.; Krämer, J.; Jähnig, C.; Seifert, S.; Weinhardt, C. 2011
Understanding Auction Fever: A Framework for Emotional Bidding. Electronic Markets 21(3). 197–207.
doi:10.1007/s12525-011-0068-9
@Article{CitationKey,
author = {Adam, Marc T. P. and Kr\"{a}mer, Jan and J\"{a}hnig, Caroline and
Seifert, Stefan and Weinhardt, Christof},
title = {{Understanding Auction Fever: A Framework for Emotional Bidding}},
journal = {Electronic Markets},
year = {2011},
volume = {21},
pages = {197-207},
number = {3},
doi = {http://dx.doi.org/10.1007/s12525-011-0068-9},
abstract = {Auction fever is a multifaceted phenomenon that is frequently observed
in both traditional and Internet auctions. In order to gain a better understanding
of its causes, we develop a conceptual framework to analyze emotions in auctions,
which is based on an exhaustive literature review. The framework integrates
rational calculus with emotional aspects and suggests that emotional processing
is triggered at three different stages of an auction: First, the economic
environment can affect a bidder’s level of perceived competition and thus
influence the bidding strategy prior to the auction. Second, auction events
may have ramifications on the bidder's emotional state during the auction due
to previous investments or perceived ownership. Third, past auction outcomes
may impact future bidding behavior through emotions such as the joy of winning
or loser regret. Auction fever, eventually, is a phenomenon that results from
the interplay of these emotional processes and causes a bidder to deviate from
an initially chosen bidding strategy.}}

					
 
10
Adam, M. T. P.; Gamer, M.; Krämer, J.; Weinhardt, C. 2011
Measuring Emotions in Electronic Markets. Proceedings of the International Conference on Information Systems (ICIS). (Shanghai, China). Association for Information Systems. ISBN 978-0-615-55907-0. 1–19.
http://aisel.aisnet.org/icis2011/proceedings/breakthroughideas/1
@Inproceedings{CitationKey,
author = {Adam, Marc T. P. and Gamer, Matthias and Kr\"{a}mer, Jan and Weinhardt,
Christof},
title = {{Measuring Emotions in Electronic Markets}},
booktitle = {Proceedings of the International Conference on Information Systems
(ICIS)},
year = {2011},
address = {Shanghai, China},
pages = {1-19},
publisher = {Association for Information Systems},
note = {ISBN 978-0-615-55907-0},
url = {http://aisel.aisnet.org/icis2011/proceedings/breakthroughideas/1}}

					
 
11
Astor, P. J.; Adam, M. T. P.; Jähnig, C.; Seifert, S. 2011
Measuring Regret: Emotional Aspects of Auction Design. Proceedings of the 19th European Conference on Information Systems (ECIS). (Helsinki, Finland). 1129–1140.
http://aisel.aisnet.org/ecis2011/88
@Inproceedings{CitationKey,
author = {Astor, Philipp J. and Adam, Marc T. P. and J\"{a}hnig, Caroline and
Seifert, Stefan},
title = {{Measuring Regret: Emotional Aspects of Auction Design}},
booktitle = {Proceedings of the 19th European Conference on Information Systems
(ECIS)},
year = {2011},
address = {Helsinki, Finland},
pages = {1129-1140},
url = {http://aisel.aisnet.org/ecis2011/88}}

					
 
12
Adam, M. T. P.; Krämer, J.; Weinhardt, C.; Ehrhart, K.-M. 2010
Investigating Auction Fever. in: Dreier, T.; Krämer, J.; Studer, R.; Weinhardt, C. (eds.), Information Management and Market Engineering: Vol. II Studies on eOrganisation and Market Engineering. Karlsruhe: KIT Scientific Publishing. 141–157. ISBN: 978-3-86644-589-5.
@Misc{CitationKey,
author = {Adam, M. T. P.; Kr\"{a}mer, Jan; Weinhardt, Christof; Ehrhart,
Karl-Martin},
title = {{Investigating Auction Fever}},
howpublished = {in: Dreier, T.; Kr\"{a}mer, J.; Studer, R.; Weinhardt, C. (eds.),
Information Management and Market Engineering: Vol. II Studies on eOrganisation
and Market Engineering. Karlsruhe: KIT Scientific Publishing. 141–157},
year = {2010},
note = {ISBN: 978-3-86644-589-5}}

					
 
13
Adam, M. T. P. 2010
Measuring Emotions in Electronic Auctions. Karlsruhe: KIT Scientific Publishing.
http://digbib.ubka.uni-karlsruhe.de/volltexte/1000018894
@Book{CitationKey,
title = {{Measuring Emotions in Electronic Auctions}},
publisher = {KIT Scientific Publishing},
year = {2010},
author = {Marc T. P. Adam},
address = {Karlsruhe},
url = {http://digbib.ubka.uni-karlsruhe.de/volltexte/1000018894},
abstract = {Auctions are nowadays a popular and frequently employed market
mechanism in electronic markets. In economic literature, the success of electronic
auctions has been largely attributed to the reduction of transaction costs,
the large number of potential buyers, and the independence of time and space.
However, an additional explanation for the success of electronic markets, and
in particular Internet consumer auctions, is the hedonic or emotional value
bidders derive from auction participation. The emotionality bidders experience
in Internet auctions confronts a market engineer of electronic markets with
two important challenges, regarding both the auction mechanism design and the
user interface design. First, how can an auction system induce emotionality
and, thus, attract excitement oriented consumers? Second, what is the impact
of emotionality on bidding behavior? In order to approach both challenges, a
market engineer needs to be able to actually measure emotions in electronic
auctions. This thesis develops a structured methodology that allows to
systematically analyze emotions in electronic auctions. It provides a unified
framework for emotional bidding in electronic auctions, which comprises the
bidders' processes of cognitive reasoning and emotional processing. Moreover,
a methodology for measuring physiological correlates of human emotional processing
in economic experiments is proposed: physioeconomics. Physioeconomics extends
existing methods of experimental economics by measuring autonomic nervous system
activity using well-established psychophysiological methodology in order to
gain a profound understanding of human economic decision-making. Based on the
framework for emotional bidding and the methodology of physioeconomics, this
thesis describes how emotions and their impact can be measured in electronic
ascending auctions, and provides a proof-of-concept study. Moreover, an experiment
was conducted in order to analyze the impact of clock speeds on the bidders'
emotional processing and behavior in Dutch auctions. Several previous experimental
studies have discovered that the sellers' revenues in Dutch auctions depend
on the speed at which the standing price is decreased: Slow Dutch auctions
generally yield higher revenues than fast Dutch auctions. This effect is commonly
explained by the conjecture that participants experience a ``utility of suspense''
which is stronger in fast Dutch auctions. The experiment in this thesis provides
physiological evidence for a utility of suspense in Dutch auctions, further
characterizes the elicited emotional state bidders experience, and investigates
how this emotional state is reflected in bidding behavior. Furthermore,
characteristic patterns of bidders' emotional processing in Dutch auctions are
identified. It is shown (1) that inducing a bidder with an independent private
valuation directly influences her level of arousal, and (2) that the heart rate
of the winning bidder momentarily decreases about two seconds before she places
her bid.}}

					
KIT – University of the State of Baden-Wuerttemberg and National Research Center of the Helmholtz Association