Emotions in decision-making

One way of thinking holds that the mental process of decision-making is (or should be) rational: a formal process based on optimizing utility. Rational thinking and decision-making does not leave much room for strong emotions. In fact, emotions are often considered irrational occurrences that may distort reasoning.

However, there are presently theories and research for both rational decision-making and emotional decision-making focusing on the important role of emotions in decision-making and the mental process and logic on the important role in rational decision-making.

Loewenstein and Lerner divide emotions during decision-making into two types: those anticipating future emotions and those immediately experienced while deliberating and deciding. Damasio formulated the somatic marker hypothesis (SMH), that proposes a mechanism by which emotional processes can guide (or bias) behavior, particularly decision-making. Pfister and Böhm believe that "the issue of rationality should be based on the validity of emotional evaluations rather than on formal coherence."

Loewenstein and Lerner divide emotions during decision-making into two types: those anticipating future emotions and those immediately experienced while deliberating and deciding. Anticipated (or expected) emotions are not experienced directly, but are expectations of how the person will feel once gains or losses associated with that decision are experienced. A great deal of research has focused on the risk/return spectrum that is considered in most decisions. For example, students may anticipate regret when deciding which section of a class is best to register for, or participants in a weight-loss plan might anticipate the pleasure they will feel if they lose weight, versus the negative feelings unsuccessful efforts may engender.

Generally, it is the contemplation of incremental losses or gains that generates anticipated emotions in decision-makers, as opposed to their overall condition. This means that an investor who imagines losing a small amount of money will generally focus with disappointment on the lost investment, rather than with pleasure on the overall amount still owned. Similarly, a dieter who anticipates losing two pounds may imagine feeling pleasure even though those two pounds are a very small percentage of what needs to be lost overall.

Also, decision-makers tend to compare a possible result of a decision against what could have happened, rather than to their current state: for instance, game participants who could win $1000 and end up with nothing base their disappointment on the loss of the hoped-for prize, rather than on the fact that they have no less money than they had when they began the game. This process, and the anticipation of such emotion, is referred to as a counterfactual comparison.

Finally, decision-makers tend to weight possible outcomes differently based on the amount of delay between the choice and the outcome. Decisions made with a time delay – intertemporal choice – tend to involve different weights on outcomes depending on their delay, involving hyperbolic discounting and affective forecasting. These effects are then connected to anticipated emotions as the decision is being contemplated.

True emotions experienced while decision-making are termed immediate emotions, integrating cognition with somatic or bodily experienced components within the autonomic nervous system and outward emotional expressions. These may or may not be connected to the decision at hand, however; while contemplation of the decision’s consequences may give rise to immediate emotions, known as anticipatory or integral influences, immediate emotions can also be related to the current environment or the dispositional affect of the person. Although unrelated to the decision under consideration, this type of emotion can still impact the decision-making process as an incidental influence.