Emotional skills: The role of emotional intelligence for strategic interactions and markets

Introduction

Emotional intelligence, like anticipating the emotions of others and regulating one’s own emotions, is thought to be a crucial skill to do well in the workplace. This may be especially true for strategic interactions relevant for the workplace such as cooperation, bargaining, and market interactions.

Importance of Emotions

From experimental studies, we know that emotions play an important role in these interactions. Yet, whether or how emotional skills influence strategic interactions is unknown. Economists and other scholars currently lack the tools and framework to systematically study the role of emotional skills in strategic settings.

Current Understanding

While we have a good understanding of other key elements of strategic interactions like social preferences and strategic reasoning, no such investigation exists for emotional skills.

Project Goals

The goal of this project is to provide the foundation to jumpstart the study of emotional skills in strategic interactions and markets. Specifically, this project addresses three main objectives:

1. Develop a new emotional skills test, specifically designed to study the role of emotional skills in strategic interactions.
2. Use the newly developed test to experimentally investigate how emotional skills shape outcomes and decisions in strategic interactions and markets.
3. Study the supply of emotional labor – the requirement that workers have to display certain emotions on the job that may mismatch their own – which is associated with considerable psychological costs.

Importance of Emotional Labor

Despite its importance for labor markets, evidence on the economics of emotional labor is lacking. I will include emotional labor in standard economic models and develop a new experimental paradigm to estimate the supply of emotional labor.

Conclusion

This project will synthesize insights from psychology and management with methods of experimental economics and will provide the experimental tools and paradigms to study emotional intelligence in strategic interactions and markets.