Craving Money? Evidence from the Laboratory and the Field

97 Pages Posted: 1 Apr 2020 Last revised: 7 Dec 2023

See all articles by Elise Payzan-LeNestour

Elise Payzan-LeNestour

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

James Doran

University of New South Wales

Date Written: December 6, 2023


Continuing to gamble despite harmful consequences has plagued human life in many ways, from loss-chasing in problem gamblers to reckless investing during stock market bubbles. Here we propose that these anomalies in human behavior can sometimes reflect Pavlovian perturbations on instrumental behavior. To show this, we combined key elements of Pavlovian psychology literature and standard economic theory into a single model. In it, when a gambling cue such as a gaming machine or a financial asset repeatedly delivers a good outcome, the agent may start engaging with the cue even when the expected value is negative. Next, we transported the theoretical framework into an experimental task and found that participants behaved like the agent in our model. Finally, we applied the model to the domain of real-world financial trading and discovered an asset-pricing anomaly suggesting that market participants are susceptible to the purported Pavlovian bias.

Keywords: Decision making under uncertainty, self-control, craving, option pricing, neurofinance

JEL Classification: C91, D87, G41

Suggested Citation

Payzan-LeNestour, Elise and Doran, James, Craving Money? Evidence from the Laboratory and the Field (December 6, 2023). Available at SSRN: or

Elise Payzan-LeNestour (Contact Author)

University of New South Wales ( email )

Australian School of Business
Sydney, NSW 2052


Financial Research Network (FIRN)

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


James Doran

University of New South Wales ( email )

College Rd
Sydney, NSW 2052

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