ACCI Conference 2024

Standard economic theory focuses on static and stable preferences. However, growing evidence shows that cognitive, emotional, and visceral states can mediate behavioral biases and shape preferences (DellaVigna, 2009). Symmonds et al. (2010) and Levy et al. (2013) show that risk attitudes fluctuate with metabolic states. This study builds upon this research by investigating whether hunger influences risk attitudes. In a controlled laboratory experiment, we manipulated hunger levels while employing a specialized risk attitude elicitation tool capable of parametrically estimating the Prospect Theory (PT) components, utilizing a convex budget line (CBL) allocation methodology (Andreoni and Sprenger, 2012).
Participants fasted for at least three hours before the experiment and completed a high-protein shake-tasting activity before or after completing the risk attitude elicitation questionnaire. Our results suggest a limited impact of hunger on the utility function and loss aversion parameters. However, we find that hungry (fasting) participants display significantly more risk aversion (curvature of the utility function) and probability distortion (inverse S shape of the probability weighting function) than the satiated participants. These results align with and extend existing evidence regarding the impact of satiation and hunger on risk attitudes, adding to the ongoing discourse on the role of hunger in economic decision-making.

Author(s): Lydia Ashton, Emmanuel Kemel, Antoine Nebout