Do Emotions Help or Hurt Decisionmaking?: A Hedgefoxian Perspective

11. Aging, Affect, and Decision Making

• 11 • Aging, Affect, and Decision Making QUINN KENNEDY AND MARA MATHER OLDER ADULTS are faced with complex decisions, particularly medical and financial decisions, which can carry high levels of risk and have important consequences for their quality of life. Do older adults make decisions any differently than younger adults? Decision making involves cognitive and emotional processes that have been shown to change with age; for example, maintaining and manipulating information in working memory (MacPherson, Phillips, and Della Sala 2002), and dealing with the emotional aspects of a decision (Bechara et al. 1999; Blanchard-Fields, Jahnke, and Camp 1995). Research shows that emotional goals, such as feeling good in the moment, become more salient as people get older (Carstensen, Isaacowitz, and Turk-Charles 1999). These changes have implications for older adults’ decision making. Older adults are more likely to attend and remember positively valenced information than are younger adults (Carstensen and Mikels 2005; Carstensen, Mikels, and Mather 2006; Mather 2004; Mather and Carstensen 2005), which may lead older adults to focus on different aspects of information available during the decision making process than younger adults (Mather, Knight, and McCaffrey 2005) and remember their past decisions more positively than the decisions merit (Mather and Johnson 2000). One area in which age affects decision making includes decisions involving assessments of risk. A risky choice is one in which there is a probability or chance of various outcomes occurring. The final outcome is 245 not determined by the choice, but by the way that the chosen probabilistic situation turns out. In contrast, other choices are riskless in that the ultimate outcome for each option is known in advance and there is not uncertainty about how each option will turn out. The literature on emotion , decision making, and aging shows that age-related changes in emotion affect older adults’ decision making about options with uncertain outcomes. Affect and Decision Making While emotion and cognition often work together in decision making, emotion overrides cognition under some circumstances. Emotional reactions occur more rapidly than cognitive responses (LeDoux 1993; Zajonc 1980), and therefore can direct cognitive assessments such as the perception of risk (Finucane et al. 2000). One example of directing cognitive assessments is that people often overweigh small probabilities or perceive a negative relationship between risks and benefits even when they are positively correlated; such judgments contradict rational thought (Finucane et al. 2000; Loewenstein et al. 2001). The tendency to erroneously perceive a negative relationship between perceived risk and perceived benefit seems to be the result of referring to one’s affective response when judging both risk and benefit. For instance, people who feel more positively about cell phones rate the benefit of cell phones higher and the risk lower than those who feel more negatively about cell phones. This negative correlation increases when people are asked to make the judgments under time pressure and there is less time for analytic deliberation (Finucane et al. 2000). In addition, several factors that influence risk taking behavior are mediated by affect rather than cognition; these include background mood, the time interval between decision and outcome, and vividness with which the outcome is represented mentally (Loewenstein et al. 2001). For example, emotional reactions are more sensitive to vivid possibilities than to the probability of an event occurring (Loewenstein et al. 2001). Thus, when an emotionally evocative outcome, such as winning a million dollars in a lottery, is involved in a risky decision, people are relatively insensitive to the probability of the outcome occurring. Whether the odds are one in one hundred million or one in one hundred thousand will make little difference in the decision to buy the lottery ticket. Emotion plays an integral yet multifaceted role in decision making. Different emotions and even different aspects of the emotional experience affect decision making in distinct ways, and the effects of emotion on risky decision making depends on the nature of the risk, the level of risk 246 Do Emotions Help or Hurt Decision Making? involved, and whether potential losses are personally relevant or not (Isen 2000; Isen, Nygren, and Ashby 1988; Isen and Patrick 1983; Mann 1992). For example, people in a positive mood are less risk taking than people in a neutral mood when the potential loss is personally relevant, regardless of the level of risk (Nygren et al. 1996). Positive Emotions Work by the psychologist Alice Isen and her colleagues demonstrates that positive mood has a...