Positive Arousal Increases Individuals’ Preferences for Risk

Modern theories in cognitive psychology and neuroscience indicate that there are two fundamental ways in which human beings comprehend risk. The "analytic system" uses algorithms and normative rules, such as probability calculus, formal logic, and risk assessment. It is relatively slow, effortful, and requires conscious control. The "experiential system" is intuitive, fast, mostly automatic, and not very accessible to conscious awareness. The experiential system enabled human beings to survive during their long period of evolution and remains today the most natural and most common way to respond to risk. It relies on images and associations, linked by experience to emotion and affect (a feeling that something is good or bad). This system represents risk as a feeling that tells us whether it is safe to walk down this dark street or drink this strange-smelling water. Proponents of formal risk analysis tend to view affective responses to risk as irrational. Current wisdom disputes this view. The rational and the experiential systems operate in parallel and each seems to depend on the other for guidance. Studies have demonstrated that analytic reasoning cannot be effective unless it is guided by emotion and affect. Rational decision making requires proper integration of both modes of thought. Both systems have their advantages, biases, and limitations. Now that we are beginning to understand the complex interplay between emotion and reason that is essential to rational behavior, the challenge before us is to think creatively about what this means for managing risk. On the one hand, how do we apply reason to temper the strong emotions engendered by some risk events? On the other hand, how do we infuse needed "doses of feeling" into circumstances where lack of experience may otherwise leave us too "coldly rational"? This article addresses these important questions.

At the heart of emotion, mood, and any other emotionally charged event are states experienced as simply feeling good or bad, energized or enervated. These states--called core affect--influence reflexes, perception, cognition, and behavior and are influenced by many causes internal and external, but people have no direct access to these causal connections. Core affect can therefore be experienced as free-floating (mood) or can be attributed to some cause (and thereby begin an emotional episode). These basic processes spawn a broad framework that includes perception of the core-affect-altering properties of stimuli, motives, empathy, emotional meta-experience, and affect versus emotion regulation; it accounts for prototypical emotional episodes, such as fear and anger, as core affect attributed to something plus various nonemotional processes.

Many decisions must be made under stress, and many decision situations elicit stress responses themselves. Thus, stress and decision making are intricately connected, not only on the behavioral level, but also on the neural level, i.e., the brain regions that underlie intact decision making are regions that are sensitive to stress-induced changes. The purpose of this review is to summarize the findings from studies that investigated the impact of stress on decision making. The review includes those studies that examined decision making under stress in humans and were published between 1985 and October 2011. The reviewed studies were found using PubMed and PsycInfo searches. The review focuses on studies that have examined the influence of acutely induced laboratory stress on decision making and that measured both decision-making performance and stress responses. Additionally, some studies that investigated decision making under naturally occurring stress levels and decision-making abilities in patients who suffer from stress-related disorders are described. The results from the studies that were included in the review support the assumption that stress affects decision making. If stress confers an advantage or disadvantage in terms of outcome depends on the specific task or situation. The results also emphasize the role of mediating and moderating variables. The results are discussed with respect to underlying psychological and neural mechanisms, implications for everyday decision making and future research directions. Copyright © 2012 Elsevier Ltd. All rights reserved.