Sentiments and economic decision-making

The field of sentiments and economic decision-making explores how emotions, opinions, and perceptions influence rational behavior and market dynamics. This area of research has gained prominence due to its potential to explain deviations from traditional economic theories. Despite the assumption that economic agents act rationally, there is growing evidence that sentiments can lead to market distortions (arising from so-called “animal spirits”). For instance, consumers may express negative sentiments towards certain products yet continue to purchase them, investors might favor risky companies despite poor fundamentals, and employers may refuse to hire a profitable employee out of animus. Sentiment is not a commitment. Recent studies have highlighted the inconsistency between stated preferences and actual behavior, challenging the notion of Homo Economicus as a purely rational actor. However, the field still lacks a comprehensive understanding of how measurable sentiments correlate with economic decision-making, necessitating further investigation into this complex relationship.

This research topic seeks to explore how explicitly stated attitudes and perceptions can lead to deviations from traditional economic predictions. By examining the role of sentiments in decision-making processes, the research aims to address questions such as: How do sentiments influence strategic interactions and risk-taking? What are the implications of sentiment-driven behavior for intertemporal choices and time inconsistency? Through theoretical, experimental, and empirical approaches, this research will test hypotheses related to the impact of sentiments on economic behavior.

To gather further insights into the relationship between sentiments and economic decision-making, we welcome articles addressing, but not limited to, the following themes:
• The role of sentiments in strategic interaction and decision-making
• Identifying behavioral inconsistencies and their economic implications
• Impact of sentiments on risk-taking and intertemporal choice
• Novel methods for measuring or analyzing sentiments, including text analysis and AI/ML topic modelling
• Such analysis in consumer behavior, investment decisions, and employment practices
• Experimental designs using textual data, such as surveys, reviews, and performance evaluations