Gender shock: Study reveals men, not women, make more emotional money choices

ESSEX, England — When it comes to making financial decisions, conventional wisdom suggests keeping emotions out of the equation. But new research reveals that men, contrary to traditional gender stereotypes, may be significantly more susceptible to letting emotions influence their financial choices than women.

A study led by the University of Essex challenges long-held assumptions about gender and emotional decision-making. The research explores how emotions generated in one context can influence decisions in completely unrelated situations – a phenomenon known as the emotional carryover effect.

“These results challenge the long-held stereotype that women are more emotional and open new avenues for understanding how emotions influence decision-making across genders,” explains lead researcher Dr. Nikhil Masters from Essex’s Department of Economics.

Working with colleagues from the Universities of Bournemouth and Nottingham, Masters designed an innovative experiment comparing how different types of emotional stimuli affect people’s willingness to take financial risks. They contrasted a traditional laboratory approach targeting a single emotion (fear) with a more naturalistic stimulus based on real-world events that could trigger multiple emotional responses.

The researchers recruited 186 university students (100 women and 86 men) and randomly assigned them to one of three groups. One group watched a neutral nature documentary about the Great Barrier Reef. Another group viewed a classic fear-inducing clip from the movie “The Shining,” showing a boy searching for his mother in an empty corridor with tense background music. The third group watched actual news footage about the BSE crisis (commonly known as “mad cow disease”) from the 1990s, a real food safety scare that generated widespread public anxiety.

After watching their assigned videos, participants completed decision-making tasks involving both risky and ambiguous financial choices using real money. In the risky scenario, they had to decide between taking guaranteed amounts of money or gambling on a lottery with known 50-50 odds. The ambiguous scenario was similar, but participants weren’t told the odds of winning.

The results revealed striking gender differences. Men who watched either the horror movie clip or the BSE footage subsequently made more conservative financial choices compared to those who watched the neutral nature video. This effect was particularly pronounced for those who saw the BSE news footage, and even stronger when the odds were ambiguous rather than clearly defined.

Perhaps most surprisingly, women’s financial decisions remained remarkably consistent regardless of which video they watched. The researchers found that while women reported experiencing similar emotional responses to the videos as men did, these emotions didn’t carry over to influence their subsequent financial choices.

The study challenges previous assumptions about how specific emotions like fear influence risk-taking behavior. While earlier studies suggested that fear directly leads to more cautious decision-making, this new research indicates the relationship may be more complex. Even when the horror movie clip successfully induced fear in participants, individual variations in reported fear levels didn’t correlate with their financial choices.

Instead, the researchers discovered that changes in positive emotions may play a more important role than previously thought. When positive emotions decreased after watching either the horror clip or BSE footage, male participants became more risk-averse in their financial decisions.

The study also demonstrated that emotional effects on decision-making can be even stronger when using realistic stimuli that generate multiple emotions simultaneously, compared to artificial laboratory conditions designed to induce a single emotion. This suggests that real-world emotional experiences may have more powerful influences on our financial choices than controlled laboratory studies have indicated.

The research team is now investigating why only men appear to be affected by these carryover effects. “Previous research has shown that emotional intelligence helps people to manage their emotions more effectively. Since women generally score higher on emotional intelligence tests, this could explain the big differences we see between men and women,” explains Dr. Masters.

These findings could have significant implications for understanding how major news events or crises might affect financial markets differently across gender lines. They also suggest the potential value of implementing “cooling-off” periods for important financial decisions, particularly after exposure to emotionally charged events or information.

“We don’t make choices in a vacuum and a cooling-off period might be crucial after encountering emotionally charged situations,” says Dr. Masters, “especially for life-changing financial commitments like buying a home or large investments.”