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Emotion and Decisions

Feelings Are Not the Enemy of Rational Choice
Elizabeth A. Phelps

Why do rabid sports fans buy tickets for losing teams? As a New York Knicks fan and season ticket holder for over a decade, I’ve asked myself this question many times. A prominent economist I invited to a game once commented on the irrationality of my devotion. The tickets are expensive, and I don’t get much pleasure from watching them lose.

His comment captured a notion that many economists, philosophers, and some scientists have proposed over the years—that the human mind contains competing forces of emotion and reason. In such views, emotions drive ‘irrational’ choices. The tension between emotion and reason is also apparent in our legal system. The belief that emotion undercuts rational choices has led to guidelines for evidence that attempt to limit emotion’s unwanted influence.

The idea that emotion and reason are independent forces driving decisions is typical of Western thought. But is it right? Recent research suggests the answer is no. Affective neuroscience aims to uncover the nature of emotion and understand its influence on decision-making, reasoning, and other cognitive functions. This work finds emotion is inherently intertwined with reason and they influence each other in driving decisions.

Making a decision requires weighing the relative value of the options and choosing the one we value more. The value assigned to an option, however, can vary.  For some things, like ten thousand dollars, the value seems obvious. Most people would act to gain ten thousand dollars if the requirements were ethical and not too arduous. But even the value of money can depend on circumstances. The supermodel Linda Evangelista reportedly told Vogue in the 1990s, “We don’t wake up for less than $10,000 a day.” Subjective value reflects the idea that the value assigned to an option is individually tailored. In this personal calculation, a key component is emotion.

Emotion has been described as a relevance detector—that is an internal sign of what is important.  Much as cognition is divided into discrete functions such as perception, attention, and memory, emotion has many components. For instance, a mood is a lasting subjective state, whereas emotions are discrete reactions to internal or external events. An emotional reaction can lead to physical changes, such as increases in heart rate and sweating, or may only cause changes to feelings or facial expressions.

Different components of emotion influence different decision processes. As anyone who has ever made an impulse purchase or practiced ‘retail therapy’ would know, your mood can change your choices. Verifying this everyday phenomenon, psychologists have shown that inducing a sad mood results in different buying and selling decisions than a disgusted mood or a neutral mood. Other studies found that people who are more aroused when losing money than winning money are more likely to overweigh losses relative to gains when deciding—a tendency known as loss aversion.  Emotion does not have a uniform influence on decision; instead it varies depending on the nature of the emotional response and the situation.

Psychological research is beginning to discover the complex relationship between emotion and decisions, but it is necessary to examine the underlying neural machinery to determine if emotion and reason drive decisions independently. Early theories of brain organization suggested that emotion and cognition may rely on separate systems. The limbic system was described as an interconnected set of evolutionarily older brain regions that mostly line the inner border of the cortex. Early anatomists argued that these brain regions evolved to manage basic emotional responses, such as the flight-or-fight reaction. Over time, the limbic system became known as the emotional center of the brain, with the neocortex underlying higher cognitive functions, such as reason.

These early theories of brain organization have not held up over time. Over the years, researchers have found that there is no clean dividing line in the brain between regions or systems that underlie emotion and cognition. For example, a key component of the limbic system, the hippocampus, underlies memory, a basic cognitive function. Similarly, parts of the neocortex, such as the orbitofrontal cortex, are critical for emotion. For this reason, affective neuroscientists suggest that the limbic system idea is now obsolete. Instead, we need to understand how brain regions, including those linked to emotional and cognitive functions, work together to produce adaptive behavior.

This new approach suggests a different interpretation: that emotions modulate cognition. For instance, few will forget the shocking terrorist attacks of 9/11. This memory is strong in part because during an emotionally arousing experience, the amygdala—a brain region that quickly detects emotion cues—acts via the hippocampus to enhance the storage of memory for that experience. Similarly, through its extensive connections with the visual cortex, the amygdala helps insure emotional events are prioritized in attention and perception. One consequence is that victims of crimes involving guns are often so focused on the weapon that they fail to notice the face of the perpetrator.

In these examples, the amygdala is not needed for perception or memory, but it modulates activity in other brain regions so that stimuli and events that elicit emotional reactions are more likely to be perceived and remembered. A similar relationship exists between emotion and the computation of value. The emotional response to a choice option modulates the brain systems underlying the assessment of its value and then the decision.

Emotion’s modulation of value influences how we reason about the choice options. But it can also go the other way. How we reason about choice options influences our emotional response as well. The common phrase ‘the glass half full or half empty’ captures the idea that our interpretation of an event alters our emotional reaction. A study examining gambling decisions found that thinking about each choice as one of a portfolio of choices lowered the arousal response to potential losses and thus loss aversion. Extending this result to the stock market showed that experienced traders had less variation in arousal in response to market volatility than novice traders, perhaps reflecting their broader perspective on the stock market obtained over time.

This view of emotion’s role in decisions suggest that emotion and reason are not competing forces but complementary processes that interact and influence each other. The emerging science of emotion and decision-making shows that their interaction is extensive and subtle in ways that we have yet to fully appreciate.

I’m still not sure I can provide my economist friend with a satisfactory explanation of why I’ve invested so much in Knicks tickets over the years, but I’m pretty sure I rationally considered my options, incorporating my love of the Knicks into my value computation. Fortunately for me, after a decade of losing, they’re winning again. And I have great seats.

Elizabeth Phelps is Professor of Psychology and Neural Science at New York University.

Kristen Seidman
4 years ago

My boyfriend is always telling me that my decisions are too emotional. I'm going to send him to read this article.

Alice D'artagnan
4 years ago

I recently read a book called 'Switch: How to Change When Change is Hard' by Chip and Dan Heath about the forces that go into making a decision. Here is a link that outlines the basic principles of the book: http://www.triplepundit.com/2010/05/chip-heath-direct-the-rider-motivate-the-elephant-shape-the-path/ One of the most interesting parts to me was a study done where the participants were asked not to eat the day of the study. When they arrived, they were each put into a room with two bowls of food, one had freshly baked cookies and the other had radishes. Half were told not to eat the cookies, and the other half were told to have whatever they wanted. They were then given an impossible puzzle to solve. The half that ate the cookies tried for over twice as long before giving up on the puzzle as the half who refrained from eating cookies. From this, researchers concluded that the logical and emotional forces can compete against each other and that the logical side is easily worn out when fighting emotional urges. The book likened it to a big, charging elephant (emotion) and the struggling rider pulling on the reigns (logic). The trick is to get them to want to go down the same path.

Alice D'artagnan
4 years ago

Wow, that butchered my paragraph formatting.

Long-tailed Jaeger
4 years ago

Maybe there's reason in this kind of madness, since if your losing team *does* win, you're likely to experience an enormous boost of happiness—more than if you were on the other side and went into the game expecting to win. I lived in Boston the year the Curse of the Bambino was reversed, and the whole city was electrified. I don't think anyone who attended that final game of the series would have given up the experience of being in the stands that night, no matter how much it cost them to be there.


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