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Do Emotions Expressed Online Correlate with Actual Changes in Decision-Making?: The Case of Stock Day Traders.

ABSTRACT: Emotions are increasingly inferred linguistically from online data with a goal of predicting off-line behavior. Yet, it is unknown whether emotions inferred linguistically from online communications correlate with actual changes in off-line activity. We analyzed all 886,000 trading decisions and 1,234,822 instant messages of 30 professional day traders over a continuous 2 year period. Linguistically inferring the traders' emotional states from instant messages, we find that emotions expressed in online communications reflect the same distributions of emotions found in controlled experiments done on traders. Further, we find that expressed online emotions predict the profitability of actual trading behavior. Relative to their baselines, traders who expressed little emotion or traders that expressed high levels of emotion made relatively unprofitable trades. Conversely, traders expressing moderate levels of emotional activation made relatively profitable trades.

SUBMITTER: Liu B

PROVIDER: S-EPMC4713085 | biostudies-literature | 2016

REPOSITORIES: biostudies-literature

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Do Emotions Expressed Online Correlate with Actual Changes in Decision-Making?: The Case of Stock Day Traders.

Liu Bin B Govindan Ramesh R Uzzi Brian B

PloS one 20160114 1

Emotions are increasingly inferred linguistically from online data with a goal of predicting off-line behavior. Yet, it is unknown whether emotions inferred linguistically from online communications correlate with actual changes in off-line activity. We analyzed all 886,000 trading decisions and 1,234,822 instant messages of 30 professional day traders over a continuous 2 year period. Linguistically inferring the traders' emotional states from instant messages, we find that emotions expressed in ...[more]

PMID: 26765539

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Project description:Objectives: The mainstream position on regret in psychological literature is that its necessary conditions are agency and responsibility, that is, to choose freely but badly. Without free choice, other emotions, such as disappointment, are deemed to be elicited when the outcome is worse than expected. In two experiments, we tested the opposite hypothesis that being forced by external circumstances to choose an option inconsistent with one's own intentions is an important source of regret and a core component of its phenomenology, regardless of the positivity/negativity of the post-decision outcome. Along with regret, four post-decision emotions - anger toward oneself, disappointment, anger toward circumstances, and satisfaction - were investigated to examine their analogies and differences to regret with regard to antecedents, appraisals, and phenomenological aspects. Methods: Through the scenario methodology, we manipulated three variables: choice (free/forced), outcome (positive/negative), and time (short/long time after decision-making). Moreover, we investigated whether responsibility, decision justifiability, and some phenomenological aspects (self-attribution, other attribution, and contentment) mediated the effect exerted by choice, singularly or in interaction with outcome and time, on the five emotions. Each study was conducted with 336 participants, aged 18-60. Results: The results of both studies were similar and supported our hypothesis. In particular, regret elicited by forced choice was always high, regardless of the valence of outcome, whereas free choice elicited regret was high only with a negative outcome. Moreover, regret was unaffected by responsibility and decision justifiability, whereas it was affected by the three phenomenological dimensions. Conclusion: Our results suggest that (1) the prevailing theory of regret is too binding, since it posits as necessary some requirements which are not; (2) the antecedents and phenomenology of regret are broader than it is generally believed; (3) decision-making produces a complex emotional constellation, where the different emotions, singularly and/or in combination, constitute the affective responses to the different aspects of decision-making.

Dataset Information

Do Emotions Expressed Online Correlate with Actual Changes in Decision-Making?: The Case of Stock Day Traders.

Publications

Do Emotions Expressed Online Correlate with Actual Changes in Decision-Making?: The Case of Stock Day Traders.

Similar Datasets

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