How Anxiety Leads to Suboptimal Decisions Under Risky Choice Situations

Abstract

The current research proposes that situationally activated anxiety--whether incidental or integral-impairs decision making. In particular, we theorize that anxiety drives decisionmakers to more heavily emphasize subjective anecdotal information in their decision making, at the expense of more factual statistical information--a deleterious heuristic called the anecdotal bias. Four studies provide consistent support for this assertion. Studies 1A and 1B feature field experiments that demonstrate the role of incidental anxiety in enhancing the anecdotal bias in a choice context. Study 2 builds on these findings, manipulating individuals' incidental anxiety and showing how this affects the anecdotal bias in the context of message evaluations. Study 2 also provides direct evidence that only high-arousal negative emotions such as anxiety/worry enhance the anecdotal bias, not just any negative emotion (e.g., sadness). While the first three studies examine how incidental anxiety impacts choice, the last study demonstrates the effect of integral anxiety on decision making, manipulating anxiety by intensifying participants' perceived risk. Our results show that--consistent with findings from our first three studies--the anecdotal bias is enhanced when anxiety is heightened by individuals' perception of risk.

Take It or Leave It: How Choosing versus Rejecting Alternatives Affects Information Processing

“…Study 2 tested the effect of task type in the context of online reviews where people typically receive two types of information: an aggregate rating based on ratings from multiple users, and a sample of individual ratings and verbal reviews. Prior research has shown that people often discount aggregate numerical information in the presence of anecdotal evidence (Alter et al 2007;Tversky and Kahneman 1973;Yang, Saini, and Freling 2015). For example, when asked to evaluate the probability that Jack is an engineer, people may ignore the proportion of engineers in the sample and rely on Jack's verbal description instead, a decision bias often referred to as base rate neglect (Tversky and Kahneman 1973).…”

“…For example, when asked to evaluate the probability that Jack is an engineer, people may ignore the proportion of engineers in the sample and rely on Jack's verbal description instead, a decision bias often referred to as base rate neglect (Tversky and Kahneman 1973). Similarly, when choosing between two insurance plans offered by companies A and B, people can disregard the aggregate satisfaction ratings of the two companies, and instead rely on the personal experience of a specific consumer when making their decisions (Yang, et al 2015). Importantly, the tendency to discount aggregate numerical information in the face of anecdotal evidence is reduced under more deliberative processing (Alter et al 2007;Yang, et al 2015).…”

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“…First, emotions underlie many aspects of risk perception . For example, anxious individuals appear to rely more on anecdotal evidence when making decisions, or choose more certain, apparently less risky options than angry individuals . Emotions expressed on social media also appear to influence the trustworthiness and usefulness of the messages .…”

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“…All these changes in the mood of a community directly affect reliability of the community to recover to a normal state. In fact, several studies correlate disruptive events with long‐lasting effects on mood states …”