I just finished Dan Ariely's new book, The Upside of Irrationality. Ariely, of course, is a very accomplished behavioral economist and previously wrote the best-selling and insightful book, Predictably Irrational. Ariely's experimental research provides thought-provoking insights into how the human mind works. Take, for instance, a study he conducted regarding how emotions affect decisions.
Ariely and a colleague, Eduardo Andrade, first began by using two different movie clips to either put individuals in a positive or negative emotional state. Then, they had the subjects play the ultimatum game. In this simple game, participants are given $20. One individual is given the right to decide how much of the $20 they wish to share with another person. If the "receiver" rejects the offer, however, then neither party receives any money. While a "rational" person might accept any offer, given that some money is better than none, most people actually will reject an offer that is perceived to be unfair out of a desire to punish the sender for their selfish behavior. It turns out that a person's emotional state amplifies the effects of this experiment. In other words, being in a negative emotional state raises the odds that you will reject unfair offers. No surprise there, I guess. However, the most interesting part of the research concerns the lingering effects of emotions. Ariely and Andrade find that the amplified effect from a person's emotional state still holds even when you conduct the ultimatum game again later on, after the emotions have apparently subsided. In other words, we aren't just affected by the heat of the moment. If we make decisions in the heat of the moment, we may be setting the stage for a pattern of similar behavior over time.