Live-Biofeedback and Emotion Regulation in Electronic Auctions

• Applicant: Professor Dr. Christof Weinhardt, since 8/2014
• Subject Area: Accounting and Finance
• Term: from 2014 to 2018
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 249959708

Suboptimal decision-making by humans has frequently been explained by a strong influence of emotions. Indeed, it has been demonstrated in several contexts that emotions can get out of control in moments of high arousal, adversely affecting decision-makers. Emotions are however indispensable for decision-makers, since they also help us to structure the anticipated consequences of a decision in an orderly way and therefore to make good decisions. Adequate emotional processing is therefore an important prerequisite for making economic decisions.According to the psychological theory of emotion regulation (ER), emotions are elicited in the course of a dynamic process, which can be regulated consciously or unconsciously. Current research shows that ER can lead to better decisions, depending on the context. The newly established Karlsruhe Decision & Design Lab (KD2Lab) at KIT makes it possible to gain a deeper insight into emotions experienced by humans, on the basis of physiological measurements. In addition, such technologies can be used to support people in ER with the assistance of live biofeedback (LBF). With this technology, users are provided with direct feedback about their current emotional state with the aid of physiological measurements. Theoretically, LBF can contribute to increasing general awareness of one's emotional state and, based upon this, improve the ability to accurately assess one's own emotional state.The objectives of the proposed project are (i) to investigate the influence of conscious and unconscious ER, (ii) to develop a multimodal arousal parameter and an interactive LBF-learning environment for improving ER capabilities, and (iii) to investigate the influence of ER training and LBF on economic decisions in the specific context of electronic auctions. Auctions are particularly suitable for investigating these relationships since auction participants often experience strong arousal states, and emotions experienced in this context are often blamed for being the cause of suboptimal decisions. In addition, auctions have a high economic relevance and are particularly well suited to systematically analyze economic decision-making in laboratory experiments.The results contribute to a deeper understanding in identifying which ER strategies are beneficial to decision-makers, so that these can be trained systematically. Moreover, the integration of LBF is gaining more importance in the domain of information systems. LBF can help to alert decision-makers in critical situations, to adapt processes and information display for decision support, and to systematically train ER skills. The project provides valuable insights for appropriate representation of LBF and the general design of such systems.

• DFG Programme: Research Grants
• Ehemaliger Antragsteller: Professor Dr. Marc Adam, until 8/2014