Emotions, Violence and Risk Aversion
María Antonia Fontaine
Tesis, Magíster en Economía, IE-PUC, 2018
Abstract: Exploiting the quasi-random nature of unexpected defeats and victories in soccer matches of the most popular teams in the Chilean league as emotional shocks, I study the causal effects of frustration and euphoria on violence and the willingness to make risky decisions proxied by the number of violent crimes and car accidents caused by reckless driving and alcohol consumption, respectively. I find that these emotions not only affect the instigation of violence and pure aggression, as documented in previous work and postulated in the Frustration-Aggression Theory, but also risk aversion. Specifically, I find that (1) the number of violent crime increases significantly with frustration while is not affected by euphoria, and that (2) the number of alcohol-related car accidents significantly increases with frustration while decreases with euphoria suggesting that risk aversion is indeed affected by strong emotions.