Abstract
Intuitively, how we feel about potential outcomes will determine our decisions. Indeed, one of the most influential theories in psychology, Prospect Theory, implicitly assumes that feelings govern choice. Surprisingly, however, we know very little about the rules by which feelings are transformed into decisions. Here, we characterize a computational model that uses feelings to predict choice. We reveal that this model predicts choice better than existing value-based models, showing a unique contribution of feelings to decisions, over and above value. Similar to Prospect Theory value function, feelings showed diminished sensitivity to outcomes as value increased. However, loss aversion in choice was explained by an asymmetry in how feelings about losses and gains were weighed when making a decision, not by an asymmetry in the feelings themselves. The results provide new insights into how feelings are utilized to reach a decision.
Highlights
How would you feel if you received international recognition for outstanding professional achievement? How would you feel if your marriage broke apart? Intuitively, answers to these questions are important, as they should predict your actions
How exactly do feelings associated with possible outcomes relate to actual choices? What are the computational rules by which feelings are transformed into decisions? While an expanding body of literature has been dedicated to answering the reverse question, namely how decision outcomes affect feelings (Carter & McBride, 2013; Kassam, Morewedge, Gilbert, & Wilson, 2011; Kermer, Driver-Linn, Wilson, & Gilbert, 2006; McGraw, Larsen, Kahneman, & Schkade, 2010; Mellers, Schwartz, Ho, & Ritov, 1997; Rutledge, Skandali, Dayan, & Dolan, 2014; Yechiam, Telpaz, & Hochman, 2014), little is known of how feelings drive decisions about potential outcomes
We found the best fitting computational model to characterize how feelings associated with different amounts of gains and losses relate to the objective value of these amounts
Summary
How would you feel if you received international recognition for outstanding professional achievement? How would you feel if your marriage broke apart? Intuitively, answers to these questions are important, as they should predict your actions. Prospect Theory was not derived by eliciting people’s feelings to predict choice, but rather by observing people’s choices in order to estimate the subjective value associated with possible outcomes. An implicit assumption of the theory, is that subjective value (utility) is a proxy for feelings, which in turn govern choice; “humans described by Prospect Theory are guided by the immediate emotional impact of gains and losses” (Kahneman, 2011). This suggests that if we measure a person’s feelings associated with different outcomes, we should be able to generate that person’s utility function and use it to predict their choices. We do not know if and how feelings guide choice
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