NCCR FinriskDoctoral Workshop, June 12, 2006, GerzenseeEmotions meet FinanceEmotions meet FinanceKlaus SchererAstrid Hopfensitz

The many fathers of affective science

The affective revolution: Nobel prizes in EconomicsHerbert Simon, 1978bounded rationality, emotions as interruptsReinhard Selten, 1994affect in non-cooperative gamesAmartya Sen, 1998affectice aspects of commitmentand justiceDaniel Kahneman, 2002heuristics, affective bases of judment and decisionVernon Smith, 2002experimental economics

Objectives of the NCCR in Affective Sciences

Scientific research in the behavioral, human, and social sciences Establish a truly interdisciplinary network of researchers studying affective phenomenaAddress affect and emotion for the first time in a systematic and integrated way, on multiple levels of analysisEncourage cutting-edge research on emotion, using advanced methodology Academic education and research trainingIncrease the critical mass of excellent researchers with interdisciplinary training and a strong ability for networkingFurthering the academic advancement of women Knowledge transfer and application in societyIdentify means for a realistic transfer and application of scientific understanding of emotional phenomenaProvide pertinent data and insights to orient political, social, and economic decisions

Existing research networks in Affective Sciences:Critical mass in Swiss universitiesNeuchtelBernGenevaZurichFribourgPsychologyPhilosophyEconomicsPolitical ScienceLawPsychiatryHistory of religionNeurosciencePsychologyPsychologyPsychologyLausanneEducationLiteratureCriminologySociologySociologyPhilosophy

Component process model Appraisal and efferent motor expressionEventRelevanceImplicationCopingNormativeSignificanceMemorySelf ConceptMotivationReasoningAttentionthis is noveland importantthis will obstructmy goalsI can deal with thisthis is unfairand immoral

What is the mechanism that produces facial expressions?A sequential unfolding of facial movements resulting from successive appraisals of the situation?An innate affect program that produces an emotion-specific pattern when triggered by an event?The apex of the expression is the same but the process is different. Research on the dynamics of facial expression is required to settle this question that has important theoretical implications.Watch now!Watch now!OR

Projects and transversal modulesEmotion elicitation and perceptionEmotion regulationSocial functions of emotionAppraisal and MotivationScherer/GendollaNorm complianceFehrResponse patterningScherer/KaiserNeural architectureVuilleumier/LandisRegulation and FamilyPerrez/ReichertsWork and EmotionsSemmer/TschanExecutive functionsVan der LindenValues and NormsMulliganEmotions and LawFlckiger/Robert/RothMyths and RitesBorgeaud

Appraisal and motivational processes in the elicitation of emotionKlaus Scherer & Guido GendollaUniversity of Geneva, PsychologyThe elicitation of emotional experience is explained by the current motivational state and the process of subjective appraisal of events.

Topics include:The dynamic unfolding of the appraisal process The role of motivation for mobilization of effort and the appraisal of performance outcomesDispositional biases in appraisalSocial and cultural dimensions of appraisal Project 1

Finance professionals may face specific conditions for appraisal: High stakes, uncertain consequences, high urgency, limited control and coping ability, conflicting norms and expectations.

Potential research topics:Appraisal biases in investors: Myopic loss aversionHow traders appraise significant eventsTrader types: Dispositional appraisal biasesEmotional climate in the stock market due to shared appraisalsThe role of attention in continuously ongoing appraisal processesSkills in appraising client reactionsProject 1 meets Finance

Response patterningKlaus Scherer & Susanne KaiserUniversity of Geneva, PsychologyEmotional response patterning is expected to be driven by successive appraisal outcomes.

Topics include: Experimental manipulation of appraisal criteria and measurement of the effects on different response domainsThe relationship between gestural, facial, vocal and postural expression of emotionsMeasurement of gestural, facial, vocal and postural expression in dyadic interactionProject 2

The special nature of the appraisal processes in finance contexts may generate specific types of response patterning with respect to motor expression, physiology, and conscious feelings.

Potential research topics:Mode synchronization given rapid reappraisalsEmotional competence in response regulation generating trustEmotional competence in recognizing others' emotionsEmotion work with clientsEmotional contagion on markets: emotions can spreadProject 2 meets Finance

Lo and Repin, The Psychophysiology of Real-Time Financial Risk Processing, Journal of Cognitive Neuroscience, 2002 Measure physiological reactions during real trading Combine these observations with market dataFindings: Differences in physiological reactions dependent on behavior of market. Individual differences between traders.Illustrative studies

Analysis difficult in such real decision situations. - It is difficult to infer emotions exclusively from physiological measures Emotional reactions spill over from one situation to the next. Difficult to disentangle effects. Situation often involves many factors unknown to researcher.Therefore most studies have focused on risk taking for simple gambles Bosman and van Winden, Global risk, Effort, and Emotions in an Investment Experiment, 2001 Hopfensitz and van Winden, Dynamic Choice, Independence and Emotions, 2006

Findings:

- Dependent on risk: different emotions are considered- Dependent on situation: same emotions have different effects.

Illustrative studies

Neural architecture of emotion perception and affect-related cognitionPatrik Vuilleumier & Theodor LandisUniversity of Geneva, NeuroscienceExamining the cerebral bases (anatomical and temporal patterns) of affective and social perception, using brain-imaging techniques.

Topics include:Brain activation in response to faces displaying different emotions and to the subjective appraisal of their affective value in different contextsThe role of attention in affective processingNeural bases of cognitive control and individual differences in emotional processingProject 3

Neurofinance: What are the underlying neural mechanisms in risk assessment, utility inference, and decision making

Potential research topics:Neural bases of intuitionHow is risk interpreted in the brain, e.g. in Gambling TasksNeural bases of individual differences: Impulsivity, sensation seekingHyperbolic discounting: immediate gratification is special (McClure et al 2004, Science)Risk versus Ambiguity: different neuronal reactionsProject 3 meets Finance

Individual and social regulation of emotions in the familyMeinrad Perrez & Michael ReichertsUniversity of Fribourg , PsychologyUnderstanding emotion regulation as underlying processes of pro- and antisocial behavior, with a particular emphasis on affective relationships in the family.

Topics include:Elaboration of a taxonomy of individual and social emotion regulation behaviorsThe effects of different types of social emotion regulation responses in daily couple and family interaction on parents well-being, parenting, and child behaviorDefining behavioral rules for adaptive social emotion regulationProject 4

Given the high level of stress and emotionality of work in finance, stress resilience and adequate coping strategies are at a premium. So is social regulation in the work team and the family.

Potential research topics:Asssessing patterns of stress experiences and resilienceEmotional competence in individual and social regulationAdequate assessment of coping potentialAdvanced methods of experience samplingProject 4 meets Finance

Work and emotions: Effects onwell-being, health, and productivityNorbert Semmer & Franziska TschanUniversity of Bern; University of Neuchtel, PsychologyExamining working conditions in terms of job design and social relationships as they relate to affective experience, especially stress. Topics include:Assessment of working conditions, personal characteristics, social relations, work-life balance, and private stressors and resourcesMeasuring the effects on health, well-being, attitudes, and commitment toward ones organization in a major longitudinal survey and in-depth studiesProject 5

Finance professionals work in challenging environments at a high level of pressure and risk. In addition to difficult working conditions often their self is at stake.

Potential research topics:Competition and envy: influence on risk takingBurnout and emotional workFunds managers: impact of shame / guilt on behaviorSpill over of emotions from work life, or from work workValues and the role of the self

Project 5 meets Finance

Emotion regulation, impulsivity, and executive functionsMartial Van der LindenUniversity of Geneva , PsychologyImpulsivity as an important aspect of self-regulation.

Topics include:The different components of impulsivityThe various cognitive processes (and related brain substrates) that contribute to these dimensions of impulsivityThe development of impulsivity in adolescence and its contribution to the development of antisocial behaviorsProject 6

Given the time pressure and urgency of decisions as well as high stakes, personality dispositions in impulsivity may play a significant role.

Potential research topics:Executive space in cognitive processingFactors and components of impulsivityCan hyper-impulsivity be treated?Impulsivity and anti-social behaviorProject 6 meets Finance

Emotional foundations of norm compliance and norm enforcementErnst FehrUniversity of Zurich, Behavioral EconomicsThe role of emotions in the pro- and antisocial behavior of ordinary people and criminal offenders.

Topics include:Which emotions are involved in norm compliance and enforcement ?What is the neural basis of norm compliance and enforcement ?Do criminal offenders exhibit fewer or different emotions when compared with non-criminal control groups ?Does the pattern of brain activation associated with norm compliance and norm violation in criminal offenders differ from the pattern in non-criminal controls ?

Project 7

Neuroeconomics and Neurofinance the neural basis of normative behavior and equity decisions.

Potential research topics:In many market settings contracts are not enforceable: necessity of prosocial emotions (trust)The just world phenomenon (Melvin Lerner)Please ask Ernst Fehr!Project 7 meets Finance

Emotion, values, and normsKevin MulliganUniversity of Geneva, PhilosophyEvaluation of the presuppositions embodied in the conceptual frameworks used in current work on affective phenomena using conceptual analysis, discussion of examples, and theory construction.

Topics include:Are affective phenomena simply by-products of desires?Are emotions appraisals?Are norms more fundamental than values?What is the relation between guilt and norm violation?

Project 8

Philosophy may help to examine some fundamental issues concerning the nature of appraisal and emotional reactions in finance contexts .

Potential research topics:The role of values and utilityConflict between norms and desiresSources of shame and guilt (e.g., in investment consultingProject 8 meets Finance

The importance of emotions in social and legal regulationAlexandre Flckiger, Christian-Nils Robert,& Robert RothUniversity of Geneva, LawLaw may be strongly based on reason, but it is not immune to emotion. The project explores the currently observable emotionalization of law.

Topics include:Law as the product of emotion. e.g., the growing importance of victims in legal proceedingsEmotion as a support for, or even a means of regulating social behaviors, e.g. the promotion of organ donor campaigns as an example of soft lawProject 9

The legal context of finance and its emotional ramifications.

Potential research topics:Soft law regulation and control in financial marketsInsider trading and popular response

Project 9 meets Finance

Myths and rites as cultural expression of emotionPhilippe BorgeaudUniversity of Geneva, History of ReligionMyths and rites from ancient societies afford an ideal humanistic laboratory for an objective analysis of emotions in their relationship to normative and disruptive standards of behaviors.

Topics include:The study of ancient literary descriptions and iconographical representations of emotions in Egypt, Mesopotamia, Israel, Greece, Rome, as well as in ancient Christianity and Islam, with some incursions into Far Eastern culturesA comparative reflection on the anthropology of the person : self-definitions of the human (generally males) in contrast to definition of the "others" (strangers, females, or gods)

Project 10

Historical and anthropological issues

Potential research topics:History of trust in markets (e.g. diamond traders, )Religious constraints of financial activitySocial values and intrecultural differencesProject 10 meets Finance

Transversal modules: overview and aimsPro- and antisocial behavior Study determinants of prosocial and antisocial behavior and underlying mechanisms.Gender differences Systematically assess gender differences in all empirical studies and diagnose potential causes. Identify remedial action on the basis of the results.Life span development Assess age group differences whenever possible. Diagnose potential causes due to changes in cognitive development, socialization, motivation, etc. Identify risk factors and potential for remedial action.Advanced methods Identify common methodological needs. Develop and share a comprehensive method toolbox. Promote mutual fertilization of methodological approaches.Four transversal modules integrate overarching issues into the research design of several projects, consider the implications of different studies for knowledge transfer and application, and synthesize the relevant results.

Focussed interdisciplinarityTransversal integration of perspectives Unified concepts, methods, and toolsCollaboration with major international centers of learning and researchCommon focus of research: affectParticipation of most relevant disciplines Multiple levels of analysis

Added value through synergyThe added value specific to the NCCR is achieved through four mechanisms:

1. Export/Import of competences: No project can be carried out as planned without the collaboration of other NCCR members 2. Transversal modules: Cross-project syntheses will be achieved for four important thematic areas3. Inter-project studies: Ideas for new collaborative research between projects are constantly emerging4. Interdisciplinary education and training program: Fundamental research perspectives are evolving

The future of emotionThe members of the NCCR will also address challenging issues with respect to the evolution of ancient emotion mechanisms in modern society, such as:Is shame disappearing as a consequence of growing hedonism, feelings of entitlement, and demands for individual freedom from social constraints? How does the development of ever more efficient forms of communication and entertainment affect emotion and emotion regulation? How will emotional avatars change our relationship to machines?Could social and technological progress overtax the inherent flexibility of the emotion mechanism and outrun its evolution?

Further info: www.affective-sciences.org

OKHammurabi au milieu sur click Platon en haut gauche sur click Freud en bas droite sur click affichage des autres dans squence actuelle sur click cerveau se met dessus (changer fond cerveau noir)okkrs ecririrRight mix: Focussed interdisciplinarity

The common focus of reseach is affectMost major perspectives on affect are represented in the proposalLevels of analysis range from neural substrata to historical and cultural contextThe different perspectives and levels of analysis are combined in an innovative transversal approachUnifying concepts, sharing methods, and jointly developing new tools guarantees cumulative results

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