Mood Effects in Optimal Debt Contracts

31 Pages Posted: 5 Feb 2012 Last revised: 21 Mar 2012

See all articles by Nicholas Apergis

Nicholas Apergis

University of Piraeus; University of Derby

Dimitris Voliotis

University of Piraeus - Department of Banking and Financial Management

Date Written: January 1, 2012

Abstract

The impact of strong emotions or mood on decision making and risk taking is well recognized in behavioral economics and finance. Yet, and in spite of the immense interest, no study, so far, has provided any comprehensive evidence on the impact of such emotions on financial contracts and particularly on debt contracts. This paper provides the theoretical framework to study the impact of mood on financial contracting.

Keywords: mood effects, rank-dependent probabilities

Suggested Citation

Apergis, Nicholas and Voliotis, Dimitris, Mood Effects in Optimal Debt Contracts (January 1, 2012). Available at SSRN: https://ssrn.com/abstract=1998686 or http://dx.doi.org/10.2139/ssrn.1998686

Nicholas Apergis

University of Piraeus ( email )

Karaoli and Dimitriou 80
80 KARAOLI & DIMITRIOU STREET
Piraeus, Attiki 18534
Greece

University of Derby ( email )

Kedleston Road
Derby, Derbyshire DE22 1GB
United Kingdom

Dimitris Voliotis (Contact Author)

University of Piraeus - Department of Banking and Financial Management ( email )

80 Karaoli & Dimitriou Str.
18534 Piraeus, 185 34 -GR
Greece

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