The strategic value of emotions – happiness and fear in market entry games

The strategic value of emotions – happiness and fear in market entry games

Anna Sophia Vogt and Christian D. Schade, Humboldt-Universität zu Berlin

 

We conduct an incentive compatible experiment with N=168 entrepreneurs and students testing whether own emotions and knowledge about others’

emotional states influences choices in market entry games. Happiness and fear were induced using several film clips from a validated set. We find that in simultaneous market entry with three asymmetric players women react more to own induced emotions than men, and all respondents enter least against two happy and most against two anxious people (p<.001).

This indicates that people use the information about others’ emotional states to coordinate.