Psychological Bulletin, Vol. 127, 2001
20 Pages Posted: 11 Oct 2006
Virtually all current theories of choice under risk or uncertainty are cognitive and consequentialist. They assume that people 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 decision. The authors propose an alternative theoretical perspective, the risk-as-feelings hypothesis, that highlights the role of affect experienced at the moment of decision making. Drawing on research from clinical, physiological, and other subfield of psychology, they show that emotional reactions to risky situations 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.
Keywords: choice under risk, affect, risk-as-feelings, risk preference, risk attitude
JEL Classification: D81, D11, D12, D91
Suggested Citation: Suggested Citation
Loewenstein, George and Weber, Elke U. and Hsee, Christopher K., Risk as Feelings. Psychological Bulletin, Vol. 127, 2001. Available at SSRN: https://ssrn.com/abstract=929947