Authors: Rajagopal Raghunathan, New York University; and Michel Tuan Pham, Columbia University
Publication: Organizational Behavior and Human Decision Processes
Focus Area: Emotion, Decision Making
Relevance: Risk and reward expectations are essential components of fraud schemes, and the effect of emotion on victims’ decision can determine their vulnerability to particular types of scams as well as fraud in general. Techniques that allow people to sidestep their emotions when making decisions could be beneficial in prevention efforts.
Summary: Previous studies of the effect of emotion on decision making have been too simplistic, comparing only positive and negative emotions. This study looks into the effects of different kinds of negative emotions, namely anxiety and sadness, and finds that they have different influences on decision making.
- Sad people were more interested in risky but potentially highly rewarding options, while anxious people preferred safe but lower yielding options.
- The authors propose that it was not the risk that was appealing to sad people, but rather the high reward that influenced their choice.
- The effect of negative emotions diminished when subjects were asked to make the same choices on behalf of another person, rather than for themselves.
- The authors note that this did not address situations that have high or low potential losses, and suggest that decisions might differ in these scenarios.
Author Abstract: Affective states of the same valence may have distinct, yet predictable, influences on decision processes. Results from three experiments show that, in gambling decisions, as well as in job selection decisions, sad individuals are biased in favor of high-risk/high-reward options, whereas anxious individuals are biased in favor of low-risk/low-reward options. We argue that these biases occur because anxiety and sadness convey distinct types of information to the decision-maker and prime different goals. While anxiety primes an implicit goal of uncertainty reduction, sadness primes an implicit goal of reward replacement. We offer that these motivational influences operate through an active process of feeling monitoring, whereby anxious or sad individuals think about the options and ask themselves, “What would I feel better about . . .?”