Risk Preferences of Self-Esteem Levels in Monetary Auction Tasks under Self-Esteem Threat

Abstract

In this study, we chose monetary auction as a decision-making task, used “instructions” and “feedback” tests to put participants under two different self-esteem threat conditions. The aim was to find people’s risk preferences of self-esteem levels under self-esteem threat. In the first experiment, two instructions of the auction were used to give different self-esteem threats to the participants. In the second experiment, two creativity tests with different difficulty levels were given to the participants before the auction game, and different self-esteem threats were given through feedback after the test. Before the two self-esteem threat tests, the participants would fill in the SES questionnaire to measure the participants the level of self-esteem. At the end of the experiment process, participants were given a self-esteem threat check, utilized to detect the effects of instructions and feedback tests. Furthermore, to examine whether the effects are mainly from self-esteem threats not emotions, the participants were given the PANASemotion scales after the self-esteem threat tests. The results suggested that: in risk decision-making tasks, participants with moderate self-esteem had the highest risk preference. It was found that under the self-esteem threat conditions, decision-makers took more risks than any other group. Whereas the moderate self-esteem group tended to invest more money in monetary auction games than the high and low self-esteem groups. Emotion had no significant effect on risk preferences. Findings supported previous research results on the effect of moderate self-esteem, and the conclusion that people are riskier when faced with a self-esteem threat. It also revealed that participants with moderate self-esteem had the highest risk preference under self-esteem threat conditions. The self-esteem threat from one task would affect the decisions made to another task, thus reflecting real life conditions which is that when an individual’s self-esteem is threatened by one thing, it would affect their decision making process as a whole.