Friend or Foe: The Influence of Ambient Sound on Risk Perception
25 Pages Posted: 21 Jul 2019 Last revised: 14 Oct 2019
Date Written: October 12, 2019
It has been well-established that for simple visual stimuli, what we hear can influence what we see. Here we hypothesize that this is also true for the perception of risk in the sense that pairing visual exposure to high (low) risk with high (low) ambient sound impacts risk perception, owing to some hardwired association of auditory volume with visual instability. Using financial trading as a testbed for this new hypothesis and as a case in point, we provide experimental evidence for such an impact and highlight how it has mixed consequences for human performance under uncertainty across a variety of domains which include the medical, military, and financial investing sectors.
Keywords: Decision-making under uncertainty, Risk perception, Neuroeconomics, Laboratory experiments, Behavioral interventions
JEL Classification: C91, D83, D87, G02, G11
Suggested Citation: Suggested Citation