Risk as Feeling 1 Risk as Feelings

Virtually all current theories of choice under risk or uncertainty are cognitive and consequentialist. They assume that people act as if they assess the desirability and likelihood of possible outcomes of choice alternatives and integrate this information through some type of expectation-based calculus to arrive at a decision. We propose an alternative theoretical perspective, which we dub the riskas-feelings hypothesis, that highlights the role of affect experienced at the moment of decision making. Drawing on research from clinical, physiological, and other sub-fields, of psychology we show that emotional reactions to risky situations often diverge from cognitive assessments of those risks. When such divergence occurs, it is the emotional reactions that often drive behavior. The risk-as-feelings hypothesis is shown to explain a wide range of phenomena that have resisted interpretation in cognitive-consequentialist terms.