Friend or Foe: The Influence of Ambient Sound on Risk Perception

25 Pages Posted: 21 Jul 2019 Last revised: 14 Oct 2019

See all articles by Elise Payzan-LeNestour

Elise Payzan-LeNestour

University of New South Wales; Financial Research Network (FIRN)

Bernard Balleine

University of New South Wales

James Doran

University of New South Wales

Gideon Nave

University of Pennsylvania - The Wharton School

Lionnel Pradier

UNSW Australia Business School

Date Written: October 12, 2019

Abstract

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

Payzan-LeNestour, Elise and Balleine, Bernard and Doran, James and Nave, Gideon and Pradier, Lionnel, Friend or Foe: The Influence of Ambient Sound on Risk Perception (October 12, 2019). Available at SSRN: https://ssrn.com/abstract=3422762 or http://dx.doi.org/10.2139/ssrn.3422762

Elise Payzan-LeNestour (Contact Author)

University of New South Wales ( email )

Australian School of Business
Sydney, NSW 2052
Australia

HOME PAGE: http://www.elisepayzan.com/

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Bernard Balleine

University of New South Wales ( email )

Sydney
Australia

James Doran

University of New South Wales ( email )

College Rd
Sydney, NSW 2052
Australia

Gideon Nave

University of Pennsylvania - The Wharton School ( email )

3730 Walnut St
JMHH Suite 700
Philadelphia, PA 19104-6365
United States

Lionnel Pradier

UNSW Australia Business School ( email )

Sydney, NSW 2052
Australia

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