The Influence of Emotions on Making Important Decisions - Essay Example

In What Ways do Emotions affect our decision making? Since several centuries, the role of emotionsduring decision making has intrigued and boggled the minds of various researchers and philosophers. Emotions are something which every human being or animal has been born with. The strong presence of emotions in the cognitive process of any person is what differentiates them from the animals or other living organisms. Although early theories state that emotions do not play an integral part in the decision making of a person, the constant research and progress has contradicted with it through various theories. This essay will not only discuss the different models and theories which have evolved over the years, but also discuss the flaws in them as well, especially the Expected Utility Model. The research “The Role of Affect in Decision Making” published by Loewenstein & Lerner (2003), has described the various theories contradicting the original concept. During the 1960s, the “behavioral decision theory” made a huge impact in the research and science of decision making. However this theory followed by various other related researches neglected the fact that emotions played an influential role when it came to decision making. This concept was then changed with the passage of time, when researchers started to weigh emotions highly while dealing with decision making. Before moving on to the flaws in the theories, diferent researches carried out on emotional influences affecting decision making are analysed. Emotions Influencing Decisions Expected Emotions The first type of influence is based on the expected emotions and the other type focuses on the immediate emotion. The expected emotion concept needs to be reviewed first. According to Loewenstein and Lerner (2003), expected emotion is the perceived affect outcome of a particular choice made by any person. The pioneer theory, which is one of the widely applied models, is the expected utility model (Loewenstein et al 2003). Hans and Gisela published a research called “The Multiplicity of Emotions”, in which they explained the expected utility model. Bell and Loomes, in that research, stated that “the basic utility of an outcome might be enriched by a function of the difference between the obtained outcome and the expected outcome, or by a function of the difference between the obtained outcome and a missed outcome” (Pfister et al 2008). According to this research and the one published by Lowenstein this has inherent flaws in it. It states that according to this model people care only about the absolute outcomes of a decision and not other factors such as the expected or unexpected and situation or individual situations. The Consequential theorists have come up with more realistic models which look into the decisions made under risks factors which contradict the Expected Utility (EU) Model. The main modifications of EU model highlighted in this essay are Asset Integration, Counterfactual Emotions and Nonlinear Probability Weighing (Loewenstein et al 2003). Asset Integration The major flaw in the EU model is the assumption of “Asset Integration”, which is modified by modern theorists by relaxing it. The Expected Utility Model states that the person is only concerned about the overall or absolute impact of a consequence or decision. This is contradicted by various theorists such as Markowitz (1952) and Kahneman & Tversky (1979), which state that in gambling the person is not only concerned with the general outcome of his gamble but also the gain or loss he would entail in undertaking it. He would be more concerned with the riskiness of losing the $100 rather than the total amount he will end up with after losing the $100. Other than that, the concept of EU model states that people gamble evaluating only the values and probabilities, this is in contrast to the modern consequentialists. The riskiness of a decision is evaluated by considering two proportions; the security or potential and aspiration level. The research states that people concerned about the security don’t tend to indulge in risk situations as they become risk averse, while the potential minded people are daring risk takers. On the other hand the aspiration level caters for the situation at hand, whether certain opportunity is there and what limits different factors currently affecting a person (Loewenstein et al 2003). Counterfactual Emotions The next addition to the EU model was the recognition of counterfactual emotions. These emotions are a result of people thinking what could have happened if they had chosen another option. By comparing the consequences of the options, the disappointment and elation emotions arise within human beings. An example to this type of emotion can be for a simple undergrad student. A student who is aiming for a gold medal from his university would expect a perfect Grade Point Average throughout his semesters. If he ends up getting a B+ grade in his final semester which results in falling short of a gold medal he will be highly disappointed. On the other hand a person who is barely passing, would not be disappointed even if he ends up with a D grade, he would rather be elated. The potential gold medalist is disappointed because he was so close to the top, while for the failure he would be satisfied as he could have failed (Loewenstein et al 2003). Nonlinear Probability Weighing The next significant modification to a flaw in the previous model is the theory that a person’s analysis of potential effects of a decision is not directly proportional to the probability or his prediction of the likeliness of the certain outcome occurring. The prime example given in the research is of horse betting. Amateur better tend to undervalue top contenders as they don’t expect to get much gain out of it even though they have a high probability of winning, while on the other hand they tend to undervalue and bet on the bottom contenders, even though they have a low probability of winning (Loewenstein et al 2003). Immediate Emotions Sometimes, people don’t tend to make decisions based on their expected emotions of outcomes but they are influenced by the current or immediate emotion while making the decision. To understand the factors and modification brought by the theories by enlisting immediate one has to look at the causes of this type of emotion. The two factors are Anticipatory Influence and Incidental Influence (Loewenstein et al 2003). Anticipatory Influence Anticipating the future consequences has a direct effect on the immediate emotions. The result of positive anticipation will result in positive emotions and vice versa. However for positive emotions, eagerly waiting for the consequences will result in impatience and agitation. But it differs from the expected utility model in the sensitivity to probability. The expected utility model dictated a linear relationship between probability and the expected emotions. However anticipatory influence according to research is more related to the anticipated intensity of an outcome and not the probability of it occurring. The other factor which differentiates the two, expected and anticipatory influence is the time between the decision and consequence. As the time of the consequence nears the anticipatory emotions tend to escalate, while the probability of it happening may remain the same (Loewenstein et al 2003). Incidental Influence According to the study carried out by Lowenstein and Rick (2003) the immediate emotions are sometimes not related to the consequence but the incidental or unrelated factors to the decision itself. Disposition and Situational factors sometimes influence the decisions. When the personalities and behavior of certain individuals influence the decision, they are called disposition affects e.g. a fearful person will tend to avoid risky endeavors and hamper decisions. When certain unrelated situations roughen a person's current mood or emotion, he/she would tend to negatively analyze a decision (Loewenstein et al 2003). Flaws in research theories of emotions The first flaw in most of the emotion theories is that they state that the emotions influence the decision making itself. The theories state that all the emotions act as an external force which influences the decision which is not even directly related to it. According to Pfister & Bohm (2008) the emotion may play a role in the decision, but does not directly influence the decision itself. Other than that they also argue that most researches classify emotions into a homogenous category and do not categorize it qualitatively (Pfister et al 2008). The other major flaw highlighted in this essay is that most of the researches tend to categorize all emotions as either positive or negative emotions. Emotions categorized single dimensionally are considered a false practice be Hans & Gisela (2008). An outcome which is good might not be pleasurable for an individual. Certain emotions are a result of complex evaluation and a mixture of both pleasing and unpleasing emotions. Anger is mostly considered a negative emotion, however it could be for an individual that anger is pleasing, while the hostile consequence of raging at a certain person might be satisfying for him (Pfister et al 2008). Finally it is commonly believed by various researches that emotion hampers the thorough process of a person leading to a decision. It hampers the rational thinking of a human being. However they contradict it by saying that emotions and decisions go hand in hand. A decision cannot occur or even the idea of choosing cannot happen, if a person does not have an emotion of doing it. (Pfister et al 2008) References Loewenstein, G., & Lerner, J. S. (2003). The role of affect in decision making. New York: Oxford University Press. Pfister, H. S., & Bohm, G. (2008). The multiplicity of emotions: A framework of emotional functions in decision making. (Vol. 3, pp. 5-17). Society for Judgment and Decision Making. Retrieved from http://journal.sjdm.org/bb1/bb1.html Pfister, H.-R, and G Bohm. "Anticipated and Experienced Emotions in Environmental Risk Perception." Judgment and Decision Making. 3.1 (2008): 73-86. Print. Read More