Does Emotion Affect Our Ability To Make Rational Decisions?
Decision making is one of the most common activities we perform on a daily basis, from how we roll our eyes to resolving complicated ethical dilemmas. It has also been one of the main focuses for traditional economics. Economists spend decades to understand how humans make decisions. The traditional thinking in the field suggests that decisions are made rationally and optimally. So in theory, outcomes should be predictable.
However, if that is the case, how can traditional economic theory on decision making explain confusion, indecisiveness and impulsivity?
With the emergence of behavioral economics, more people begin to understand the significance of bounded rationality in decision making. This means our brains do not function as computers, but instead our decisions can be affected by our emotions and cognitive abilities. In fact, neuroscientists have been seeking to understand the neural and behavioral basis of decision making for a very long time.
Studies have shown that when making decisions, the brain takes a variety of information into consideration including fairness, losses and gains, reward values, risks, etc.
References
Jianfeng Hu, Tangsheng Wang (2012). The influence of neuroscience to modern society. Peking University Press
Knoch D, Pascual-Leone A, Meyer K, Treyer V, Fehr E (2006). Diminishing Reciprocal Fairness by Disrupting the Right Prefrontal Cortex. Science 314: 829-832.
Sarah F. Brosnan and Frans B.M. de Waal (2003). Monkeys reject unequal pay. Nature 425: 297-299.
Camillo Padoa-Schioppa and John A. Assad (2006). Neurons in the orbitofrontal cortex encode economic value. Nature 441: 223-226.
Takahashi YK, Roesch MR, Stalnaker TA, Haney RZ, Calu DJ (2009). The orbitofrontal cortex and ventral tegmental area are necessary for learning from unexpected outcomes. Neuron 62: 269-280.
About the Author
Tiantian Li
Tiantian is pursuing degrees in Neuroscience and Economics at Boston University. She began volunteering at the Cognition and Decision Lab at Boston University which sparked her academic interests in the fields of neuro-economics and decision science.
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