Emotions in Decision Making

Overview
One of the most common theories in the field of decision making is the expected utility theory (EU). According to this theory, people usually make their decisions by weighing the severity and likelihood of the possible outcomes of different alternatives. The integration of this information is made through some type of expectation, based calculus (cognitive activity) which enables us to make a decision. In this theory, psychological processes and the decision maker’s emotional state were ignored and not taken into account as inputs to the expectation based calculus.

Emotions as an information source
In “Risk as Feelings”, Loewenstein, Weber and Hsee argue that these processes of decision making include ‘anticipatory emotions’ and ‘anticipated emotions’: “anticipatory emotions are immediate visceral reactions (fear, anxiety, dread) to risk and uncertainties”; “anticipated emotions are typically not experienced in the immediate present but are expected to be experienced in the future” (disappointment or regret). Both types of emotions serve as additional source of information. For example, research shows that happy decision-makers are reluctant to gamble. The fact that a person is happy would make him or her decide against gambling, since he or she would not want to undermine his or her happy feeling. This can be looked upon as "mood maintenance".

According to the information hypothesis, feelings during the decision process affects people's choices, in cases where feelings are experienced as reactions to the imminent decision. If feelings are attributed to an irrelevant source to the decision at hand, their impact is reduced or eliminated.

Zajonc argues that emotions are meant to help people take or avoid taking a stand, versus cognitive calculus that helps people make a true/false decision.

Anticipated Pleasure
Mellers and McGraw (2001) proposed that anticipated pleasure is an emotion that is generated during the decision making process and is taken into account as an additional information source. They argued that the decision maker estimates how he or she will feel when he or she is right or wrong as a result of choosing one of the alternatives. These estimated feelings are “averaged” and compared between the different alternatives. It seems that this theory is the same as the expected utility theory (EU) but both can result in different choices.

Implications to decision making processes
In a research from 2001, Isen suggests that tasks which are meaningful, interesting, or important to the decision maker; and if he or she is in a good mood, the decision making process will be more efficient and thorough. People will usually integrate material for decision making and be less confused by a large set of variables, if the conditions are of positive affect. This allows the decision makers to work faster and they will either finish the task at hand quicker, or will turn attention to other important tasks. Positive affect generally leads people to be gracious, generous, and kind to others; to be socially responsible and to take other’s perspective better in interaction.