Emotions within reason: Resolving conflicts in risk preference

Abstract

This research focused on differential effects of emotional and rational preferences in decision making and how people resolve conflicting risk preferences caused by inconsistency between their emotional reactions to and rational assessment of a risk problem. In addition, effects of the framing of choice outcomes on emotional, rational, and overall risk preferences were examined. Adopting a within-subjects design, Study 1 showed that the emotional choice preference was often the opposite of the rational choice preference and was more risk-seeking than the rational preference. The overall favourability rating for a chosen option was significantly higher when the emotional choice and rational choice were the same than when they were opposed. Emotional preferences were significantly more susceptible than rational preferences to the hedonic tone of risky choice framing. The overall preference was a compromise of the conflicting emotional and rational preferences in some risk domains, and resembled either the emotional preference or the rational preference in other risk domains. Study 2, using a between-subjects manipulation, further confirmed that emotional preference and rational preference had differential effects on risky choice.

This study was partially supported by Grant SBR-9876527 from the National Science Foundation and by the Center for Adaptive Behavior and Cognition at the Max Planck Institute for Human Development in Berlin where the author was a visiting scholar in 2004. The author would like to thank Gilbert French and anonymous reviewers for their helpful comments on earlier versions of this paper, and Noel Schaeffer, Katey Leuning, Di Meng, and Ryan Steever for their assistance in conducting the study and with data recording.

This study was partially supported by Grant SBR-9876527 from the National Science Foundation and by the Center for Adaptive Behavior and Cognition at the Max Planck Institute for Human Development in Berlin where the author was a visiting scholar in 2004. The author would like to thank Gilbert French and anonymous reviewers for their helpful comments on earlier versions of this paper, and Noel Schaeffer, Katey Leuning, Di Meng, and Ryan Steever for their assistance in conducting the study and with data recording.

Notes

This study was partially supported by Grant SBR-9876527 from the National Science Foundation and by the Center for Adaptive Behavior and Cognition at the Max Planck Institute for Human Development in Berlin where the author was a visiting scholar in 2004. The author would like to thank Gilbert French and anonymous reviewers for their helpful comments on earlier versions of this paper, and Noel Schaeffer, Katey Leuning, Di Meng, and Ryan Steever for their assistance in conducting the study and with data recording.

1 It needs to be pointed out that the emotional-rational distinction used in this paper refers only to a subset of features related to this notion. The term “rational” is loaded with different connotations. In the present context, the operational definition of the term is restricted to cognitive processes involved in analytical and deliberative decision making. Although they are two different constructs, the distinction between emotional vs. rational modes of decision making are also related to the distinction between analytic vs. holistic processing styles. Particularly, emotion is often assumed to be a major component of holistic processing.

²The framing manipulation used in the terrorist problem and the family disease problem was a risky choice framing similar to the manipulation used in the Asian disease problem (Tversky & Kahneman, 1981). However, the risky choice framing in the monetary gamble problem was not just wording the same choice outcome different but a gain-loss framing reflecting a difference in the status quo. In this case, the positive framing described a gain (reward) situation whereas the negative framing described a loss (penalty) situation.

³The frequencies of tied preference ratings for the druggist, trolley, investment, terrorist (save), terrorist (kill), disease (save), disease (die), money (gain), and money (loss) problems are listed, respectively, in the following: 8, 22, 13, 12, 21, 19, 14, 7, and 11. The total number in each case was 80.

⁴To verify if emotional and rational preferences indeed differ in a between-subjects study, it was not necessary to include framing problems in Study 2. Of the 3 nonframing choice problems, the trolley problem was excluded because it did not elicit significantly different emotional and rational preferences in Study 1.