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