Hot States and Cool Heads: Preference Shifts and Rationality under Food Deprivation

Abstract

In this paper, we examine the effect of food deprivation on risk, time, and social preferences. Specifically, we differentiate between effects on rationality and economic preferences. For the experiment, subjects were deprived of food for 18 hours before one-half of the subjects received a meal before and the other after the session. We elicit risk and time preferences in the gain, loss, and mixed domains in a Discounted Prospect Theory framework using a structural model approach. This allows us to differentiate between effects on normative rationality and risk attitudes. Furthermore, we use five two-person games to elicit distributional preferences and goal rationality. For risk preferences, we find increased normative rationality, i.e., decreased probability weighting, loss aversion, and decision noise. Furthermore, we find smaller differences between discounting in the gain and loss domain for food-deprived subjects. For social preferences, we find reduced importance of non-materialistic outcomes for decision-making, i.e., increased emotional control and decreased susceptibility to framing. Joint paper with Jan S. Krausea and Lukas Baumann.