Animal Spirits: Affective and Deliberative Processes in Economic Behavior

The economic conception of human behavior assumes that a person has a single set of well-defined goals, and that the person's behavior is chosen to best achieve those goals. We develop a model in which a person's behavior is the outcome of an interaction between two systems: a deliberative system that assesses options with a broad, goal-based perspective, and an affective system that encompasses emotions and motivational drives. Our model provides a framework for understanding many departures from full rationality discussed in the behavioral-economics literature, and captures the familiar feeling of being "of two minds." And by focusing on factors that moderate the relative influence of the two systems, our model also generates a variety of novel testable predictions.

[1]  J. Stainer,et al.  The Emotions , 1922, Nature.

[2]  S. Freud.  The Ego and the Id , 1923 .

[3]  S. Fiske,et al.  The Handbook of Social Psychology , 1935 .

[4]  H. Barger.  The General Theory of Employment, Interest and Money , 1936, Nature.

[5]  J. Keynes,et al.  The General Theory of Employment, Interest and Money. , 1936 .

[6]  E. Miller.  Handbook of Social Psychology , 1946, Mental Health.

[7]  G. E. Rice,et al.  "Altruism" in the albino rat. , 1962, Journal of comparative and physiological psychology.

[8]  J. Masserman,et al.  "ALTRUISTIC" BEHAVIOR IN RHESUS MONKEYS. , 1964, The American journal of psychiatry.

[9]  Thomas C. Schelling,et al.  The Life you Save May Be Your Own , 1968 .

[10]  G. Deane,et al.  Cardiac activity during experimentally induced anxiety. , 1969, Psychophysiology.

[11]  J. Snortum,et al.  Temporal estimation and heart rate as a function of repression-sensitization score and probability of shock. , 1971, Journal of consulting and clinical psychology.

[12]  R. Lazarus,et al.  Anticipatory stress and coping reactions under various conditions of uncertainty. , 1972, Journal of personality and social psychology.

[13]  E B Ebbesen,et al.  Cognitive and attentional mechanisms in delay of gratification. , 1972, Journal of personality and social psychology.

[14]  R. Elliott,et al.  Heart rate and skin conductance in anticipation of shocks with varying probability of occurrence. , 1974, Psychophysiology.

[15]  R. Elliott.  Heart Rate in Anticipation of Shocks Which Have Different Probabilities of Occurrences , 1975, Psychological reports.

[16]  D. Raphael,et al.  I: The Theory of Moral Sentiments , 1976 .

[17]  H. Cleckley.  The Mask of Sanity: An Attempt to Clarify Some Issues about the So-called Psychopathic Personality , 1976 .

[18]  Joseph E LeDoux,et al.  The Integrated Mind , 1978, Springer US.

[19]  L. Ross,et al.  Human Inference: Strategies and Shortcomings of Social Judgment. , 1981 .

[20]  R. Zajonc.  Feeling and thinking : Preferences need no inferences , 1980 .

[21]  R. Thaler.  Toward a positive theory of consumer choice , 1980 .

[22]  R. Thaler,et al.  An Economic Theory of Self-Control , 1977, Journal of Political Economy.

[23]  R. Thaler,et al.  An Economic Theory of Self-Control , 1977, Journal of Political Economy.

[24]  G. A. Miller,et al.  Book Review Nisbett, R. , & Ross, L.Human inference: Strategies and shortcomings of social judgment.Englewood Cliffs, N.J.: Prentice-Hall, 1980. , 1982 .

[25]  J. Bargh.  Automatic and conscious processing of social information. , 1984 .

[26]  Ross Buck,et al.  The communication of emotion , 1984 .

[27]  R. Zajonc.  On the primacy of affect. , 1984 .

[28]  M. Yaari,et al.  On dividing justly , 1984 .

[29]  F. Lhermitte,et al.  Human autonomy and the frontal lobes. Part II: Patient behavior in complex and social situations: The “environmental dependency syndrome” , 1986, Annals of neurology.

[30]  G. Loewenstein.  Anticipation and the Valuation of Delayed Consumption , 1987 .

[31]  J. Maser,et al.  Panic: Psychological Perspectives , 1988 .

[32]  R. Thaler,et al.  THE BEHAVIORAL LIFE‐CYCLE HYPOTHESIS , 1988 .

[33]  Michael W. Otto,et al.  Anxiety and Its Disorders: The Nature and Treatment of Anxiety and Panic , 1989 .

[34]  W. Mischel,et al.  Delay of gratification in children. , 1989, Science.

[35]  Z. Kunda,et al.  The case for motivated reasoning. , 1990, Psychological bulletin.

[36]  Drew McDermott,et al.  A critique of pure reason 1 , 1987, The Philosophy of Artificial Intelligence.

[37]  Jonathan Baron,et al.  Behavioral Law and Economics: Reluctance to Vaccinate: Omission Bias and Ambiguity , 1990 .

[38]  Paul D. MacLean,et al.  An Explanation of Behavior. (Book Reviews: The Triune Brain in Evolution. Role in Paleocerebral Functions.) , 1990 .

[39]  T. Heatherton,et al.  Effects of physical threat and ego threat on eating behavior. , 1991, Journal of personality and social psychology.

[40]  Timothy D. Wilson,et al.  Thinking too much: introspection can reduce the quality of preferences and decisions. , 1991, Journal of personality and social psychology.

[41]  A. Tversky,et al.  Loss Aversion in Riskless Choice: A Reference-Dependent Model , 1991 .

[42]  M. Hautzinger.  [Sex differences in depression]. , 1991, Zeitschrift fur klinische Psychologie, Psychopathologie und Psychotherapie.

[43]  Daniel M. Wegner,et al.  You can't always think what you want: Problems in the suppression of unwanted thoughts , 1992 .

[44]  A. Reeves,et al.  The Triune Brain in Evolution: Role in Paleocerebml Functions , 1992 .

[45]  Seymour Epstein,et al.  Irrational reactions to negative outcomes : evidence for two conceptual systems , 1992 .

[46]  M. Hallett,et al.  Focal transcranial magnetic stimulation and response bias in a forced-choice task. , 1992, Journal of neurology, neurosurgery, and psychiatry.

[47]  Eric J. Johnson,et al.  Framing, probability distortions, and insurance decisions , 1993 .

[48]  Timothy D. Wilson,et al.  Introspecting about Reasons can Reduce Post-Choice Satisfaction , 1993 .

[49]  T. K. Srull,et al.  Handbook of Social Cognition , 1993 .

[50]  G. Bodenhausen.  Emotions, Arousal, and Stereotypic Judgments: A Heuristic Model of Affect and Stereotyping , 1993 .

[51]  Robert M. Sapolsky,et al.  Why Zebras Don't Get Ulcers , 1994 .

[52]  R. Baumeister,et al.  Losing Control: How and Why People Fail at Self-Regulation , 1994 .

[53]  Daniel Kahneman.  New challenges to the rationality assumption , 1994 .

[54]  G. Bodenhausen,et al.  Negative affect and social judgment: The differential impact of anger and sadness , 1994 .

[55]  G. R. Leon,et al.  Effects of anxiety on eating: does palatability moderate distress-induced overeating in dieters? , 1994, Journal of abnormal psychology.

[56]  G. Bodenhausen,et al.  Happiness and stereotypic thinking in social judgment. , 1994 .

[57]  G. Loewenstein,et al.  A Bias in the Prediction of Tastes , 1995 .

[58]  David T. Lykken,et al.  The Antisocial Personalities , 1995 .

[59]  Sean A. Spence,et al.  Descartes' Error: Emotion, Reason and the Human Brain , 1995 .

[60]  P. Lang.  The emotion probe. Studies of motivation and attention. , 1995, The American psychologist.

[61]  M. Banaji,et al.  Implicit social cognition: attitudes, self-esteem, and stereotypes. , 1995, Psychological review.

[62]  T Shallice,et al.  The domain of supervisory processes and temporal organization of behaviour. , 1996, Philosophical transactions of the Royal Society of London. Series B, Biological sciences.

[63]  D. Wegner,et al.  Strength of Will , 1996 .

[64]  K. Berridge.  Food reward: Brain substrates of wanting and liking , 1996, Neuroscience & Biobehavioral Reviews.

[65]  G. Loewenstein.  Out of control: Visceral influences on behavior , 1996 .

[66]  W. Roth,et al.  Activation in novice and expert parachutists while jumping. , 1996, Psychophysiology.

[67]  David I. Laibson,et al.  Golden Eggs and Hyperbolic Discounting , 1997 .

[68]  Tim Shallice,et al.  The domain of supervisory processes and the temporal organisation of behaviour , 1998 .

[69]  T. Robbins,et al.  The prefrontal cortex: Executive and cognitive functions. , 1998 .

[70]  S. Paradiso.  The Emotional Brain: The Mysterious Underpinnings of Emotional Life , 1998 .

[71]  B. Shiv,et al.  Heart and Mind in Conflict: The Interplay of Affect and Cognition in Consumer Decision Making , 1999 .

[72]  C. Frith,et al.  Towards a functional anatomy of volition , 1999 .

[73]  S. Chaiken,et al.  Dual-process theories in social psychology , 1999 .

[74]  J. Metcalfe,et al.  A hot/cool-system analysis of delay of gratification: dynamics of willpower. , 1999, Psychological review.

[75]  D. Wegner,et al.  Apparent mental causation , 1999 .

[76]  D. Wegner,et al.  Apparent mental causation. Sources of the experience of will. , 1999, The American psychologist.

[77]  J. Polivy,et al.  Distress and eating: why do dieters overeat? , 1999, The International journal of eating disorders.

[78]  Faruk Gul,et al.  Temptation and Self‐Control , 1999 .

[79]  R. Baumeister,et al.  Longitudinal improvement of self-regulation through practice: building self-control strength through repeated exercise. , 1999, The Journal of social psychology.

[80]  Iris Bohnet,et al.  The sound of silence in prisoner's dilemma and dictator games , 1999 .

[81]  Ted O’Donoghue,et al.  Doing It Now or Later , 1999 .

[82]  K. McConnell,et al.  A Review of Wta/Wtp Studies , 2000 .

[83]  William A. Cunningham,et al.  Performance on Indirect Measures of Race Evaluation Predicts Amygdala Activation , 2000, Journal of Cognitive Neuroscience.

[84]  Gary Charness,et al.  Social preferences: Some simple tests and a new model , 2000 .

[85]  Timothy D. Wilson,et al.  A model of dual attitudes. , 2000, Psychological review.

[86]  Daniel T. Gilbert,et al.  The Momentary Realist , 2000, Psychological science.

[87]  L. Cosmides,et al.  To appear in: Evolutionary Psychology and the Emotions Handbook of Emotions, 2nd Edition , 2022 .

[88]  C. Starmer.  Developments in Non-expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk , 2000 .

[89]  G. Loewenstein,et al.  Egocentric Empathy Gaps between Owners and Buyers: Misperceptions of the Endowment Effect , 2000, Journal of personality and social psychology.

[90]  G. Harcourt.  Keynes, John Maynard , 2001 .

[91]  David I. Laibson,et al.  A Cue-Theory of Consumption , 2001 .

[92]  R. Dolan,et al.  Effects of Attention and Emotion on Face Processing in the Human Brain An Event-Related fMRI Study , 2001, Neuron.

[93]  A. McConnell,et al.  Relations among the Implicit Association Test, Discriminatory Behavior, and Explicit Measures of Racial Attitudes , 2001 .

[94]  S Shiffman,et al.  A multi-dimensional analysis of cue-elicited craving in heavy smokers and tobacco chippers. , 2001, Addiction.

[95]  C. Sunstein.  Probability Neglect: Emotions, Worst Cases, and Law , 2001 .

[96]  Andrew Caplin,et al.  Psychological Expected Utility Theory and Anticipatory Feelings , 2001 .

[97]  Christopher K. Hsee,et al.  Money, Kisses, and Electric Shocks: On the Affective Psychology of Risk , 2001, Psychological science.

[98]  I. Kant,et al.  Groundwork for the Metaphysics of Morals , 2002 .

[99]  John H. Miller,et al.  NOTES AND COMMENTS GIVING ACCORDING TO GARP: AN EXPERIMENTAL TEST OF THE CONSISTENCY OF PREFERENCES FOR ALTRUISM , 2002 .

[100]  D. Massey.  A Brief History of Human Society: The Origin and Role of Emotion in Social Life , 2002, American Sociological Review.

[101]  S. Preston,et al.  Empathy: Its ultimate and proximate bases. , 2001, The Behavioral and brain sciences.

[102]  M. Pycia,et al.  Dynamic inconsistency and self-control: a planner-doer interpretation , 2002 .

[103]  Thomas D. Griffin,et al.  Dispositions, scripts, or motivated correction? Understanding ideological differences in explanations for social problems. , 2002, Journal of personality and social psychology.

[104]  A. Bechara,et al.  Investment Behavior and the Dark Side of Emotion , 2003 .

[105]  A. Anderson,et al.  Neural Correlates of the Automatic Processing of Threat Facial Signals , 2022 .

[106]  Kathleen D. Vohs,et al.  Willpower, choice, and self-control. , 2003 .

[107]  Daniel Read,et al.  Time and Decision , 2003 .

[108]  M. Muraven,et al.  Mechanisms of Self-Control Failure: Motivation and Limited Resources , 2003, Personality & social psychology bulletin.

[109]  C. Sunstein.  Terrorism and Probability Neglect , 2003 .

[110]  George Loewenstein,et al.  Helping a Victim or Helping the Victim: Altruism and Identifiability , 2003 .

[111]  G. Loewenstein,et al.  Time and Decision: Economic and Psychological Perspectives of Intertemporal Choice , 2003 .

[112]  George Loewenstein,et al.  Social Projection of Transient Drive States , 2003, Personality & social psychology bulletin.

[113]  George Loewenstein,et al.  Predicting and indulging changing preferences. , 2003 .

[114]  W. Mischel,et al.  Sustaining delay of gratification over time: A hot-cool systems perspective. , 2003 .

[115]  David I. Laibson,et al.  Neuroeconomics: How Neuroscience Can Inform Economics , 2005 .

[116]  Matthew D. Lieberman,et al.  Does Rejection Hurt? An fMRI Study of Social Exclusion , 2003, Science.

[117]  Luis C. Corchón,et al.  Addiction and Cue-Triggered Decision Processes. , 2004, The American economic review.

[118]  Samuel M. McClure,et al.  Separate Neural Systems Value Immediate and Delayed Monetary Rewards , 2004, Science.

[119]  K. Berridge,et al.  Unconscious Emotion , 2004 .

[120]  Andrew Caplin,et al.  Measuring Self-Control , 2004 .

[121]  Deborah A. Small,et al.  Heart Strings and Purse Strings , 2004, Psychological science.

[122]  J. Gross,et al.  Thinking makes it so: A social cognitive neuroscience approach to emotion regulation. , 2004 .

[123]  Andrew J Waters,et al.  Negative affect and smoking lapses: a prospective analysis. , 2004, Journal of consulting and clinical psychology.

[124]  K. Vohs,et al.  Handbook of self-regulation : research, theory, and applications , 2004 .

[125]  F. Strack,et al.  Reflective and Impulsive Determinants of Social Behavior , 2004, Personality and social psychology review : an official journal of the Society for Personality and Social Psychology, Inc.

[126]  Hanna Damasio,et al.  Investment Behavior and the Negative Side of Emotion , 2005, Psychological science.

[127]  David Dunning,et al.  The illusion of courage in social predictions: Underestimating the impact of fear of embarrassment on other people ! , 2005 .

[128]  Jess Benhabib,et al.  Modeling internal commitment mechanisms and self-control: A neuroeconomics approach to consumption-saving decisions , 2005, Games Econ. Behav..

[129]  Ilana Ritov,et al.  The ''Identified Victim'' Effect: An Identified Group, or Just a Single Individual? , 2005 .

[130]  Jonathan D. Cohen,et al.  Journal of Economic Perspectives—Volume 19, Number 4—Fall 2005—Pages 3–24 The Vulcanization of the Human Brain: A Neural Perspective on Interactions Between Cognition and Emotion , 2022 .

[131]  George Loewenstein,et al.  Adam Smith, Behavioral Economist , 2005 .

[132]  Dieter Schönecker,et al.  I M M A N U E L K A N T Groundwork of the Metaphysics of Morals , 2011 .

[133]  D. Fudenberg,et al.  A Dual Self Model of Impulse Control , 2004, The American economic review.

[134]  A. Bechara,et al.  The role of emotion in decision making: A cognitive neuroscience perspective , 2006 .