From Stress To Financial Mess: Acute Stress Affects Financial Decision Making

According to a new report in Psychological Science, stress could make our financial troubles even worse. This study suggests that stress exaggerates the reflection effect; while exposed to stress volunteers were more conservative when choosing between potentially positive outcomes and were riskier when choosing between gambles that could result in a loss. These findings indicate that in financial decision making, where rational and deliberative thinking is essential, a stressful environment might hamper our ability to make decisions.

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