Saturday, March 17, 2012

The Role of Emotions in Decision Making

There is an interesting article from Jonah Lehrer over at Wired. He looks at a recent study that asked subjects to predict outcomes for 8 different events - those who people who trusted their feelings were more likely to predict the outcomes.

There are piles of studies showing that people who lack emotions are unable to make decisions. For example, Antoine Bechara (2004) found that people who have lesions in the ventromedial (which includes the orbitofrontal) area of the prefrontal cortex (the prefrontal cortex is widely understood to be a center for decision-making and long-term planning) suffer from impaired processing of ‘‘somatic’’ or emotional signals with little or no impact on basic cognitive functions (this is his "somatic-marker hypothesis" in decision-making). Bechara found that these people had impaired decision-making skills that compromised the decision quality in their daily lives.

In another paper, Nasir Naqvi, Baba Shiv, and Antoine Bechara (2006) published an overview of the "somatic-marker hypothesis" - here is the abstract:
Decision making often occurs in the face of uncertainty about whether one’s choices will lead to benefit or harm. The somatic-marker hypothesis is a neurobiological theory of how decisions are made in the face of uncertain outcome. This theory holds that such decisions are aided by emotions, in the form of bodily states, that are elicited during the deliberation of future consequences and that mark different options for behavior as being advantageous or disadvantageous. This process involves an interplay between neural systems that elicit emotional/bodily states and neural systems that map these emotional/bodily states.
For a good overview of the role of emotions in decision making, see Decision Making, by Seunghee Han and Jennifer S. Lerner in Oxford Companion to the Affective Sciences (Oxford University Press, 2009). The Harvard Emotion and Decision Making Group has made most or all of their papers available online as PDFs (open access).

These studies, and many others, offer a little background for the article from Lehrer. References for the two studies above are at the bottom of the page.

Are Emotions Prophetic?

For thousands of years, human beings have looked down on their emotions. We’ve seen them as primitive passions, the unfortunate legacy of our animal past. When we do stupid things – say, eating too much cake, or sleeping with the wrong person, or taking out a subprime mortgage – we usually blame our short-sighted feelings. People commit crimes of passion. There are no crimes of rationality.

This bias against feeling has led people to assume that reason is always best. When faced with a difficult dilemma, most of us believe that it’s best to carefully assess our options and spend a few moments consciously deliberating the information. Then, we should choose the alternative that best fits our preferences. This is how we maximize utility; rationality is our Promethean gift.

But what if this is all backwards? What if our emotions know more than we know? What if our feelings are smarter than us?

While there is an extensive literature on the potential wisdom of human emotion – David Hume was a prescient guy – it’s only in the last few years that researchers have demonstrated that the emotional system (aka Type 1 thinking) might excel at complex decisions, or those involving lots of variables. If true, this would suggest that the unconscious is better suited for difficult cognitive tasks than the conscious brain, that the very thought process we’ve long disregarded as irrational and impulsive might actually be more intelligent, at least in some conditions.

The latest demonstration of this effect comes from the lab of Michael Pham at Columbia Business School. The study involved asking undergraduates to make predictions about eight different outcomes, from the Democratic presidential primary of 2008 to the finalists of American Idol. They forecast the Dow Jones and picked the winner of the BCS championship game. They even made predictions about the weather.

Here’s the strange part: although these predictions concerned a vast range of events, the results were consistent across every trial: people who were more likely to trust their feelings were also more likely to accurately predict the outcome. Pham’s catchy name for this phenomenon is the emotional oracle effect.

Consider the results from the American Idol quiz: while high-trust-in-feelings subjects correctly predicted the winner 41 percent of the time, those who distrusted their emotions were only right 24 percent of the time. The same lesson applied to the stock market, that classic example of a random walk: those emotional souls made predictions that were 25 percent more accurate than those who aspired to Spock-like cognition.

What explains these paradoxical results? The answer involves processing power. In recent years, it’s become clear that the unconscious brain is able to process vast amounts of information in parallel, thus allowing it to analyze large data sets without getting overwhelmed. (Human reason, in contrast, has a very strict bottleneck and can only process about four bits of data at any given moment.) But this raises the obvious question: how do we gain access to all this analysis, which by definition is taking place outside of conscious awareness?

Here’s where emotions come in handy. Every feeling is like a summary of data, a quick encapsulation of all the information processing that we don’t have access to. (As Pham puts it, emotions are like a “privileged window” into the subterranean mind.) When it comes to making predictions about complex events, this extra information is often essential. It represents the difference between an informed guess and random chance.

How might this work in everyday life? Let’s say, for example, that you’re given lots of information about how twenty different stocks have performed over a period of time. (The various share prices are displayed on a ticker tape at the bottom of a television screen, just as they appear on CNBC.) You’ll soon discover that you have difficulty remembering all the financial data. If somebody asks you which stocks performed the best, you’ll probably be unable to give a good answer. You can’t process all the information. However, if you’re asked which stocks trigger the best feelings – your emotions are now being quizzed – you will suddenly be able to identify the best stocks. According to Tilmann Betsch, the psychologist who performed this clever little experiment, your feelings will “reveal a remarkable degree of sensitivity” to the actual performance of all of the different securities. The investments that rose in value will be associated with the most positive emotions, while the shares that went down in value will trigger a vague sense of unease.

But this doesn’t meant we can simply rely on every fleeting whim. The subjects had to absorb all that ticker-tape data, just as Pham’s volunteers seemed to only benefit from the emotional oracle effect when they had some knowledge of the subject. If they weren’t following college football, then their feelings weren’t helpful predictors of the BCS championship game.

The larger lesson, then, is that our emotions are neither stupid nor omniscient. They are imperfect oracles. Nevertheless, a strong emotion is a reminder that, even when we think we know nothing, our brain knows something. That’s what the feeling is trying to tell us.
Papers cited:

Bechara, A. (2004, Jan 29). The role of emotion in decision-making: Evidence from neurological patients with orbitofrontal damage. Brain and Cognition, 55: 30–40. doi: 10.1016/j.bandc.2003.04.001

Naqvi, N., Shiv, B., and Bechara, A. (2006). The role of emotion in decision making. Current Directions in Psychological Science, 15(5): 260-264.
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