Music's Effects on Time Discounting and Risk Preferences

Abstract

The study examined music’s potential modulating and regulating effects on risk preferences and hyperbolic discounting and hypothesized that major and minor keys could lead to altered risk preferences in a financial gambling task. Specifically, that music in a major key would lead to greater risk-taking and minor key music would lead to more risk-averse decision-making. Further, that the results would be inconsistent with prospect theory with the major key creating more risk-seeking behavior even in the gain domain and the minor key creating more risk aversion even in the loss domain. Then, we hypothesized that through mood induction and priming, music would be able to modulate hyperbolic discounting and time inconsistency by magnifying their effects in the major key and minimizing it in the minor key. The participants were split into a major key, minor key, and control groups. All groups took the Positive Affect and Negative Affect Schedule (PANAS) mood SRQ, followed by the music conditions hearing a novel song, in their respective keys, created for the purpose of this study, and taking the PANAS test again to measure the songs’ mood induction effects. Then, the conditions were given a financial gambling task where they had to pick between risky and conservative gambling options in the gain and loss domains before then being given time discounting and subjective time horizon tasks. The results indicated no significant differences between the conditions in risk-taking behavior nor in hyperbolic discounting and time inconsistency, though there was promising potential increases in hyperbolic discounting by the musical stimuli. Keywords: risk preferences, risk-taking, decision-making, time discounting, hyperbolic discounting, time inconsistency, PANAS, musical mood induction, prospect theory