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Cognitive manipulation of anxiety and economic outcomes
We take advantage of a novel technique from the field of clinical psychology known as Cognitive Bias Modification (CBM) to manipulate anxiety. Once we have achieved a reduction in state anxiety elicited through repeated administration of the CBM task we employ a difference-in-difference setting through which we attempt to measure differences in economic decisions/outcomes. These include (1) Productivity under stress; (2) Confidence; (3) Measures of risk preferences such as Kahneman and Tversky's Certain Effect (1979). We find that the treatment induces higher productivity and reduced certainty effects compared to controls. Confidence was not affected. Additional outcomes variables are being looked at currently.
