Emotion and Decisions

Question 1

Emotions affect decisions

Answer 1

This is usually fine, but can sometimes lead to worse decisions

Question 2

Expected emotions can bias decisions

Answer 2

We routinely predict how we’ll feel about outcomes, use these predictions to help make decisions
But, we’re lousy at predicting how we’re going to feel after gains and losses

Question 3

Kermer et al: gambling game

Answer 3

Participants predicted their reactions to winning $5 vs. losing $3
Overpredicted negative reaction to losses
Relevant to risk aversion

Question 4

Incidental emotions can bias decisions

Answer 4

Ongoing emotions that are irrelevant to current decision
May relate to personality, recent experience, or current environment

Question 5

Lerner et al

Answer 5

Mood manipulation: none vs. disgust vs. sad
Then, participants asked prices they’d want to sell or buy a set of pens
Result: mood affected both “sell” and “buy” prices