Fenton-O'Creevy, Mark; Soane, Emma; Nicholson, Nigel and Willman, Paul
Thinking, feeling and deciding: the influence of emotions on the decision making and performance of traders.
Journal of Organizational Behavior, 32(8),
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We report on a qualitative investigation of the influence of emotions on the decision-making of traders in four City of London investment banks, a setting where work has been predominantly theorized as dominated by rational analysis. We conclude that emotions and their regulation play a central role in traders' decision-making. We find differences between high and low performing traders in how they engage with their intuitions, and that different strategies for emotion regulation have material consequences for trader behavior and performance. Traders deploying antecedent-focused emotional regulation strategies achieve a performance advantage over those employing primarily response-focused strategies. We argue that, in particular, response-focused approaches incur a performance penalty, in part because of the reduced opportunity to combine analysis with the use of affective cues in making intuitive judgments. We discuss the implications for our understanding of emotion and decision making, and for traders' practice.
||2010 Wiley & Sons, Ltd.
||Economic and Social Research Council [grant number L211252056], European Commission 7th Framework Programme [grant number 231830]
||traders; emotion; emotion regulation; intuition; financial decision-making; performance
||Open University Business School
||24 Jan 2012 10:38
||24 Oct 2012 06:48
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