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Taking complex financial decisions? Listen to fast-tempo music for better outcome



A recent study, ‘Stop the music? The effect of music on risky financial decisions: An experimental study’, published in the preprint journal SSRN on January 30, explored the influence of background music, which is present in many everyday situations, on our cognitive processes. The study examining how people invested fake coins while listening to low-tempo music, high-tempo music or no music at all.

The aim of the study was to examine the possible effect of high- and low-arousal music on decision making in the context of financial investments, focusing on two tasks: a lottery-type task and a portfolio-diversification task. The results of the study showed that people made safer investments while listening to fast-tempo, arousing music. Also, people made safer investments while listening to music they perceived as disturbing, as opposed to helpful.

The study was conducted after 63 participants were asked to make investment decisions while either high-tempo music, low- tempo music, or no music was played in the background.

After tallying the responses, the researchers chose the two pieces of music that participants rated most calming or arousing: a ‘Deadmau5’ mix of electronic music, and a relaxation mix from a new-age musician named ‘Karunesh’.

The study read, “The impact of arousal and mood on decision making can be regulated by music. People often use music for this purpose intentionally, but in many contexts, such as shops, waiting rooms, and restaurants, the listener does not choose the music, and it is continuously played in the background while the listener is engaged in other activities.”

The study pointed out that background music may influence both cognitive processes and behaviour. Studies focusing on consumer behaviour have shown that the atmosphere created by background music can influence aspects such as shopping time, amount of money spent, arousal, and pleasure. The tempo and arousing qualities of music in particular have been shown to influence speed of customer activity.

Background music may also increase cognitive load and decrease performance efficiency in cognitive processes. This effect has been found when the information processed involves the same modality (i.e., auditory) as music. In such situations, background music, by taxing the auditory channel, may lead to a deterioration in information processing.

The study mentioned, “Music has been shown to reduce learning in a multi-media task containing both visual and auditory information. However, music may also influence cognitive performance in tasks that do not include auditory processing. In such cases, the effect of the cognitive load created by music depends both on the task difficulty and the emotional effect of music.”

Generally speaking, the more arousing the music, the higher its risk of interfering with other tasks. One of the musical factors influencing arousal is tempo, with faster tempo leading to higher arousal. The aim of the present study is to examine, in an experimental setting, the effect of high-tempo arousing versus slow-tempo calming background music on decision making in the context of financial investments.

Numerous studies have shown that fast and loud classical music and other fast-tempo arousing musical styles, such as garage music and hip hop, decrease reading comprehension. High-arousal music (pop songs) has likewise been shown to lead to lower scores on cognitive measures, as compared to low-arousal songs. Relaxing music, on the other hand, increases scores on a general intelligence scale.

So the next time when you are about to make a important decision, make sure you picture the right kind of music to avoid making regrettable decisions.


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