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Do Emotions Effect Our Decisions To Take Risks?

In psychology, there is a term we refer to as risk aversion. It’s the desire to avoid risk or the probability of risk in an outcome or goal. For many, this is a developmental way of life. Many tended to create a philosophy out of avoiding risk. There is no such thing as an objective risk response.
We would like to think that when we are in a situation where risk needs to be assessed, that we can simply just “step outside of ourselves“ – but the very nature of human subjectivity, is that there is no outside of ourselves to step into.
In fact, research has shown that making decisions around risk tend to be directly influenced by the emotional state of the person making the assessment of a possible outcome.
Risk tends to appear as a strategy for rationalizing the probability of an outcome or goal. In business, this might be the decision to merge with a much larger company. However, there are a lot of variables that come into this decision that will define what’s the tangible risks are. Risk ultimately attempts to reduce the multiplicity of these variables into a decision that it looks like it is the best option for the goals of the company.
In more personal contexts, this might be exemplified in a person who is making a decision about whether they should, or should not get married. They might justify the benefits over the lack of benefits that present themselves. It could mean that they have more financial flexibility when they combine their lives with another person. Although this might remove the Romantic elements that tend to drive someone’s decision in this particular context, there is a tendency to look at any decision as a risk in and of itself.
Affective decision-making is a theory in the field of psychology that is still very understudied. However, it does expose the attempt to try to find a systematic way in which to explain how human beings experience emotion. In this sense, the lack of research could also be the very fact that there is no unified field theory of emotion, why? Because emotion itself is subjective and unreliable.
But, this then means that all decisions are then informed by the emotional state of the person or even the emotional dynamics of a group. This particular group can take on the form of a business, a community, a church, or even a nation.
Culture then essentially is a form of emotional expression that has been fortified by belief. Beliefs are either reinforced or challenged depending upon the emotional state of the person. Beliefs do not emerge in a vacuum-in fact, they are dependent upon emotional states. If one is receptive to changing their mind, their emotional state will be one of receptivity. If they however are defensive, that also is conflated with an emotional state of feeling closed.

A simple example would be how if someone is angry, they don’t fully think through all the issues they are responding to and they rely on stereotypes and tend to rush the decision-making process. In lab studies, it has also been shown that people tend to crave their desires more intensely.

Anger simplifies our response and has us rely on shortcuts of interpretation. However, happiness has its own bias, in that it has us look to whether the person or thing we are looking at gives us a sense of joy or even likeability.
What we have explored here is the importance of emotional states when assessing risk. That ironically, one of the best emotional experiences someone can experience when trying to balance out risk — is sadness. Only because studies have shown its value in how it has the person, company or nation ruminate over the details of benefits and actual risks.

However, to also offer a counter-argument within this article — there is research that defends the importance of happiness being a much more beneficial emotional experience — although, no matter what emotional experience one has, there will always be bias and assumptions – but the two best states for to experience would then be either sadness or happiness, but do not make a risk-based decision when angry.

What are your thoughts? Share below.

Do Emotions Effect Our Decisions To Take Risks?


gelerick

George Elerick has been studying human behavior for over 15 years. His fascination with what makes humans do what they do has driven his sociological curiosity to create social experiments to expose the ideas that drive humans to do what they do. Part behavioral consultant, part social theorist and all investigator, George has worked internationally 🌎 with universities, community groups, governments and more to uncover the human mind. From working with consumer brands as a behavioral marketing consultant to leading groups into the far reaches of Southern India, he has had the opportunity to work closely with communities from different cultural and socio-economic backgrounds for human behavioral research. He is constantly searching for the 'Why' that guides us all. When George is not busy speaking, you might find him rock-climbing 🧗🏻‍♂️somewhere or searching out a new hobby to try. He also is a standup comedian, you can find him on the circuit. He lives in Los Angeles with his British wife and two kids.


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APA Reference
Elerick, G. (2020). Do Emotions Effect Our Decisions To Take Risks?. Psych Central. Retrieved on July 8, 2020, from https://blogs.psychcentral.com/humans/2020/06/do-emotions-effect-our-decisions-to-take-risks/

 

Last updated: 15 Jun 2020
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