People’s behaviours, habits and emotional states when making financial decisions will be under investigation as part of a new pan-European research project, xDelia, involving The Open University Business School.
The EUR 3.2 million project, led by the International Centre for Numerical Methods in Engineering in Barcelona, will fund advanced research in the area of financial decision-making over the next three years.
Mark Fenton-O’Creevy, Professor of Organisational Behaviour, said: “Gaming and sensor technologies will be used to explore the role of emotions in financial decision-making. Our research will involve a range of people, from traders and private investors to members of the public.”
Game based technologies are widely acknowledged as a method of learning as they can place people in virtual situations, and xDelia will use this to analyse behavioural patterns. Wearable sensor equipment detecting pulse rates and perspiration will provide further clues to a person’s emotional state prior to and at the point of a financial decision. Sensor and gaming technologies will be used to improve understanding of financial decision making processes, as well as in the design of technology supported learning approaches to improve financial decision-making.
“Educational approaches to financial decision-making have to date focused mainly on improving financial knowledge. However, people often already know what the correct decision in a situation should be, but they are still ruled by their emotions or habit. This project will incorporate emotional state in the decision making process, and will help businesses and financial institutions to guide their customers through financial decision making. It will also benefit traders and investors to tackle the challenges they face when making financial decisions,” Professor Fenton-O’Creevy concluded.
The research consortium also includes Saxo Bank; The University of Bristol; Erasmus University in Rotterdam; Blekinge Institute of Technology in Sweden; and The Research Centre for Information Technology at University of Karlsruhe in Germany.