Risk as Feelings Theory

The Basic Idea

Humans are risk averse: the potential of losing something can dissuade us from engaging in particular behaviors. On the surface, our desire to avoid risky behavior seems rational. Why would we put ourselves in situations that could lead to negative outcomes? However, we perceive more risk than there actually is, and we react with more aversion than is warranted. Our fear of loss can cloud our judgment and impede our decision-making.

It is likely you are more scared of flying on a plane than riding in a car. One study found that between 33% and 40% of people experience anxiety when it comes to flying – a huge proportion of the population – but there is very little risk in plane travel. Between 2012-2016, the chances of dying on a plane were one in 3.37 billion. Even if a plane crashes, over 98% of crashes do not result in a fatality.1 Let’s compare those statistics to the statistics of car crashes: A report by Esurance, an auto insurance company, found that the odds of getting into a car crash during a 1000-mile trip is 1 in 366.2  Far more dangerous than flying! In fact, in 2019, it was found that the odds of dying in a car-crash was 1 in 107 in the U.S., whereas there were too few deaths reported for plane-crash deaths to even calculate the odds.3

The decision to avoid the perceived risk of flying and instead make your journey a road trip is not a rational decision. Emotions like anxiety and fear are powerful enough to diminish our rational decision-making abilities and make us choose a more dangerous mode of transportation. Emotions that influence our decision-making processes constitute a phenomenon known as the risk as feelings theory.

Even people who are not suffering from full-blown phobias commonly experience powerful fears about outcomes that they recognize as highly unlikely (such as airplane crashes) or not objectively terrible (such as public speaking); in contrast, many experience little fear about hazards that are both more likely and probably more severe (such as car accidents).

George Loewenstein, pioneer of behavioral science, in his paper “Risk as Feelings”4

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In the late 1970s, mathematical psychologist Amos Tversky and his colleague Daniel Kahneman, put forward prospect theory. The prospect theory showed that people feel worse about losing money compared to the pleasure they feel about gaining money, which causes individuals to avoid situations where they are at risk of losing. In the prospect theory, emotions are thus treated as anticipated outcomes of a decision.5 However, in 2001, George Loewenstein, suggested that emotions that occur in the moment of making a decision — anticipatory emotions — can also influence decision-making.4

In his paper “Risk as Feelings,” Loewenstein criticized current theories of choice for not taking emotions into account and focusing only on cognitive factors, or for being consequentialist with their interrogation of emotions, like the prospect theory. A theory is determined to be consequentialist when it places greater weight on the consequences to explain the decision-making process than on what is occurring at the time of making the decision. To fill the gaps identified, Loewenstein put forward the risk as feelings theory: the fact that emotional reactions often drive behavior, and that those emotional reactions often misperceive risk.4

While consequentialist theories predict that people will make decisions based on the likelihood of outcomes, they do not consider emotions as an integral part of the decision-making process. For example, prospect theory suggests that people might avoid making a bet where there is a 50% chance of losing $10 because they recognize the 50% chance of loss. Loewenstein instead focused on emotions that occur as people are making the decision. What is someone’s emotional state as they consider making the bet? Just the idea of making a bet can cause them to feel nervous, and that emotion can cause them to reject the bet whether there is a 50% chance of loss or a 20% chance of loss.

Loewenstein advocated for emotions to be seen as an integral part of the decision-making process. In doing so, Lowenstein made a distinction between anticipated emotions and anticipatory emotions. Anticipated emotions “are not experienced in the immediate present but are expected to be experienced in the future” (268), whereas anticipatory emotions occur in the present as a result of what someone expects could happen in the future.4

Loewenstein presented a far more complex decision-making process as a result of the risk as feelings theory, as shown in the following chart4 from his 2001 paper:

Loewenstein identified three factors that could cause anticipatory feelings to be different from anticipated feelings: vividness with which consequences can be imagined, experience with those outcomes, and history of conditioning. He also found that emotions do not tend to take probability into account, whereas cognitive processing of anticipated emotions does.4

risk as feelings perspective

Loewenstein used various examples to highlight the difference between anticipatory emotion and anticipated emotions, including an example of purchasing insurance. If other consequentialist theories were accurate, only the magnitude of loss, the probability of that loss, and one’s personal wealth and risk tolerance would impact the decision to buy insurance. However, if the risk as feelings theory is presumed, then being described a situation where not having insurance would be detrimental (e.g. describing a plane crash where one’s family wouldn’t get any compensation if they died) would impact someone’s decision.

The perceived risk is amplified by the vividness with which someone could imagine the risky situation. Loewenstein drew from a 1993 study that showed that people were more willing to pay for air travel insurance when they were told it would protect them from ‘terrorist attacks’ than if they were told it would protect them from ‘all possible causes.’ The singularity of terrorist attacks makes the situation easier to imagine, which then impacts consumers’ decision to buy insurance.4


Any theory that incorporates emotions into the decision-making process is important to dispel the notion of homo economicus, the economic theory that humans are perfectly rational decision-makers. Bringing emotions into the equation helps merge economic theory with behavioral science and psychology.

While consequential theories of emotions made important strides in realizing that humans are not purely rational thinkers and can be influenced by biases like loss aversion (we avoid loss because it is psychologically painful), the risk as feelings theory integrates emotion into decision-making processes to a greater extent. The risk as feelings theory reveals that cognition is not the only driving force in making decisions; beyond potential future outcomes, emotions play an active role.

The risk as feelings theory shows us that in uncertain situations, the possibility of negative outcomes impacts us emotionally more than it reasonably should. Since our emotions surrounding risk aren’t grounded in reality, we can try and inform ourselves to try and diminish the impact of negative emotions like stress, anxiety, or fear. For example, reminding ourselves about plane crash statistics when booking a flight might help ease the influence of risk as feelings and might allow us to remain level-headed.


It is clear that prospect theory, like other consequentialist theories, slightly diverges from the risk as feelings theory. However, the two are not mutually exclusive, as risk as feelings theory still recognizes the influence of anticipated emotions.

Another diverging theory is the affect heuristic. The affect heuristic stipulates that we rely on our emotions when making a decision in order to save time and cognitive effort. It refers to that ‘gut-like’ feeling that often guides our decisions. Where the affect heuristic differs from the risk as feelings theory is that it assumes that our emotions play a positive role in our decision-making processes, whereas the risk as feelings theory suggests emotions cloud our judgment.

Emotions Impact Course of Treatment 

A growing body of research suggests that medical decisions, which involve an element of risk, are not solely based on a cognitive analysis of risk but are also influenced by emotions. A patient’s decision to get surgery for a life-threatening treatment or not is likely influenced by their affective state. While that likelihood is unsurprising, one study hypothesized that after experiencing bad patient outcomes, physicians are also impacted by emotions. They experience regret, which then impacts the advice they would give future patients. In wanting to avoid the feeling of regret, physicians might diverge from evidence-based guidelines in their recommendations for treatment.

Joshua Hemmerich, a late cognitive scientist and medical researcher, and his team examined how emotions impacted physicians.6 The team researched medical situations involving abdominal aortic aneurysms (AAA), where the walls of the aorta become enlarged and swell out like a balloon. The swelling alone is not dangerous, but a ruptured aorta can be fatal. Physicians and patients therefore must decide between continuing surveillance of an asymptomatic but slowly growing AAA, or undergoing risky surgery. Hemmerich believed that a negative patient outcome — a rupture of an AAA that was being surveilled — would cause physicians to experience regret and that this emotion would impact subsequent recommendations for AAAs.6

To test their hypothesis, the team first needed to ensure that having a patient die because of an AAA that ruptured after a physician had decided to monitor it would cause anxiety. In the initial study, participants had to determine a course of treatment and were then told the patient’s outcome. As expected, those participants who decided to monitor the AAA and were then told that it had ruptured experienced more anxiety. After the first part of the hypothesis was confirmed, Hemmerich then studied how the negative outcome would influence subsequent treatment recommendations. He found that after an AAA rupture, physicians were 87% more likely to choose surgery for future scenarios as compared to physicians who were not told the AAA had ruptured.6

As the data from this study reflects, risk is experienced as an emotion which then influences decision-making processes. A previous AAA rupture experience should not change a physician’s treatment decisions as they should make their decisions based on evidence-based recommendation, not just a one-off experience. Since this was not the case in this experiment, Hemmerich’s study supports the risk as feelings theory.

Risk as Feelings and Gambling

As the risk as feelings theory suggests that emotions play a negative role in decision-making processes, it could be that individuals who have suffered damage to the prefrontal context (the part of your brain that processes emotion reactions) make more rational decisions. Baba Shiv, a financial expert, alongside Loewenstein, conducted a study in 2005 to examine whether individuals with a neurological disease that impacts their emotional responses would perform better in gambling decisions.7

Most people will reject a gamble when there is potential to lose, due to loss aversion. For example, if they are offered a 50-50 chance to win $200 or lose $150, they will reject the bet even though there is a high expected return. In their study, Shiv and Loewenstein wanted to see if the same would be true for individuals who had damage to their brain. They recruited 19 participants with normal brain function and 15 target participants that had neurological damage in areas found to be responsible for processing emotions. All participants were given $20 to use in investment decisions and were told they would get to keep whatever amount of money they had left at the end of the study.7

In each round, participants had to decide between investing $1 or not investing. If the participant chose to invest, they would give $1 to the experimenter who would then toss a coin. If the coin landed on heads, then the participant lost the $1, but if it landed on tails, then the participant was given $2.50 back. The potential gain ($1.50) was more than the potential loss ($1). There were 20 rounds in total, which meant that if a participant chose to invest in every round, there was only a 13% chance of obtaining a lower total earning than if a participant chose to not invest in any round and keep the original $20. The rational decision for profit maximization would therefore be to invest in every single round.7

Shiv and Loewenstein found that the 15 participants with neurological damage made decisions that more closely aligned with rational profit maximization than those with normal emotion processing brain function. In fact, the difference was stark — target participants invested 83.7% of the time, whereas the other 19 participants invested 57.6% of the time. Those target participants earned more money on average from investing more often. From these results, Shiv and Loewenstein concluded that emotions cloud people’s ability to make rational monetary decisions, thus lending support to the risk as feelings theory. 7

Related TDL Content

COVID-19 and the Science of Risk Perception

Risk can greatly influence people’s decisions and cause them to deviate from rational choices. During the pandemic, it has been clear that people have differing opinions on how much risk the COVID-19 virus poses. In this article, our writer Joshua Bromley examines which factors impact our COVID-19 risk perceptions, including experience, cultural differences, and our biased attention to information.

Does Emotion Affect Our Ability To Make Rational Decisions? 

Bounded rationality suggests that humans are not purely rational decision-makers, but can be influenced by emotions and time and cognitive function restraints. In order to better understand why emotions, influence our cognitive capabilities, our writer Tiantian Li explains the four levels of decision making and suggests that emotions play the biggest role in the second level, empirical decision-making, which includes situations where we make decisions based on experience and estimation.


  1. Deane, S. (2020, February 4). Fear of Flying Statistics, Trends & Facts (2021 Data). Stratos Jet Charters, Inchttps://www.stratosjets.com/blog/fear-of-flying-statistics-trends-facts/
  2. Griffin, D. (2020, February 2). What Are Your Chances of Getting Into a Car Accident? News 9. https://www.news9.com/story/5e6fca6cf86011d4820c3f2d/what-are-your-chances-of-getting-into-a-car-accident
  3. Preventable Deaths: Odds of dying. (2020, June 22). Injury Facts. Retrieved May 31, 2021, from https://injuryfacts.nsc.org/all-injuries/preventable-death-overview/odds-of-dying/
  4. Loewenstein, G. F., Weber, E. U., Hsee, C. K., & Welch, N. (2001). Risk as feelings. Psychological Bulletin127(2), 267-286. https://doi.org/10.1037/0033-2909.127.2.267
  5. Risk-as-feelings. (2019, April 1). Behavioral Economics. https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/risk-as-feelings/
  6. Hemmerich, J. A., Elstein, A. S., Schwarze, M. L., Moliski, E. G., & Dale, W. (2012). Risk as feelings in the effect of patient outcomes on physicians’ future treatment decisions: A randomized trial and manipulation validation. Social Science & Medicine75(2), 367-376. https://doi.org/10.1016/j.socscimed.2012.03.020
  7. Shiv, B., Loewenstein, G., & Bechara, A. (2005). The dark side of emotion in decision-making: When individuals with decreased emotional reactions make more advantageous decisions. Cognitive Brain Research23(1), 85-92. https://doi.org/10.1016/j.cogbrainres.2005.01.006

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