When it comes to making financial decisions, prevailing wisdom has long emphasized keeping emotions in check. However, ground-breaking research from the University of Essex has upended traditional assumptions about gender and decision-making, finding that men are more likely than women to let their emotions shape their financial choices.
This fascinating study, led by Dr. Nikhil Masters, examined the “emotional carryover effect”—how emotions from one situation can influence decisions in completely unrelated contexts. The findings shed light on gender differences in how emotions influence risk-taking, offering new insights into how we navigate high-stakes choices.
Do emotions really influence financial choices?
186 university students took part in the study, who were divided into three groups and shown videos designed to evoke different emotional reactions. One group watched a soothing nature documentary, another watched a tense scene from the classic horror film The Shining, and a third watched actual news footage from the 1990s about the mad cow disease (BSE) crisis.
Participants then made financial decisions in scenarios that involved either clear odds (risky choices) or ambiguous outcomes (uncertain odds). Here’s where it got interesting: men who watched emotionally charged videos (horror or news) were more cautious in their financial choices than those who watched neutral nature videos.
This cautious behavior was particularly pronounced in men who accessed BSE news footage and in scenarios with mixed odds. On the other hand, women’s financial decisions remained the same regardless of the video they watched, even when they reported experiencing similar emotions.
The gender divide in emotional decision-making
Why are men more affected by emotional states than women? Dr. Masters suggested that differences in emotional intelligence may play a role, explaining, “Women generally score higher on tests of emotional intelligence, which may explain why they are better at managing emotions when making decisions.”
Interestingly, the study also found that it is not fear per se that causes men to choose cautiously. Instead, the drop in positive emotions after watching the emotional videos seemed to influence their risk aversion.
Real-life implications for financial decision-making
These findings have important implications for how emotions affect financial markets and personal choices. For example:
- News Events and financial behavior: Emotionally charged news can disproportionately affect male investors, potentially affecting market trends.
- Cooling periods: Instituting mandatory pauses for high-stakes decisions, such as major investments or real estate purchases, can help mitigate the impact of an emotional transition.
“We are not making a choice in a vacuum,” Dr. Masters emphasized. “Understanding how emotions influence our decisions is critical, especially when it comes to life-changing financial commitments.”
Challenging gender stereotypes
The research challenges the stereotype that women are the more emotional gender when it comes to decision-making, and highlights that men can be just as, if not more, dependent on emotional experiences, especially in high-pressure situations. Although these findings are based on controlled experiments, they raise important questions about how emotions shape our daily lives.
Study guide
This study, published in the Journal of Behavioral and Experimental Economics (Volume 114, 2025, Article 102312), was a collaboration between researchers from the Universities of Essex, Bournemouth and Nottingham. It was called “Are the Emotional Effects of Transference Transmitted?” and was created by Dr Nikhil Masters from the University of Essex, Tim Lloyd from Bournemouth University and Chris Starmer from the University of Nottingham.
