Just as wise grandmothers advise, it’s best to avoid decisions when upset, anxious, or sad.

Maurice Schweitzer and Alison Wood Brooks of Wharton validated Grandmother Wisdom in eight experiments that demonstrated anxiety’s impact on lowering self-confidence, impairing information processing, and impeding ability to distinguish advice from neutral advisors and those with a conflict of interest.

They found that people experiencing anxiety tend to seek advice and act on it, but they are less able to differentiate poor advice from valid recommendations, and these results are applicable to making decisions about crucial medical treatment, financial investments, or even guidance counseling.

The team evoked anxious feeling among volunteers by presenting potentially frightening film clips and music, and asked them to judge a person’s weight based on a photograph or number of coins in a jar or solve a complex math problem.

Participants were offered money for correct judgments, and the opportunity to receive advice from others when they were uncertain.
Those who heard the scary music or saw the alarming film clip rated themselves as less confident of their decision, and were more likely to ask others for advice.
These effects were not observed when volunteers were shown a film clip that could provoke anger.

Schweitzer, Brooks, and Gino concluded that people vary in their receptivity to advice based on:

• Advisor’s characteristics, such as expertise, consistent with Cialdini’s observation
  

  Robert Cialdini

• Perceived difficulty of the decision
• Decision maker’s emotional state when receiving advice

The researchers advised decision-makers to:

• Monitor their internal states for anxiety
• Use feedback from multiple sources when making important decisions
• Work toward developing increased self-confidence
• Evoke calm state, often possible with systematic breathing or mindful attention and equanimity

Catherine Hartley, then of New York University and Elizabeth Phelps of New York University contributed to the neuroeconomic analysis of anxiety’s impact on decision- making when they reported that brain structures responsible for regulating fear and anxiety are also involved in economic decision-making under uncertain conditions.

Specifically, the amygdala is crucial in learning, experiencing, and regulating both fear and anxiety and it is also implicated in decision-making in situations of potential loss.
The prefrontal cortex is specialized in controlling fear and is also involved in decisions containing risk elements.

Hartley and Phelps suggest that techniques for altering fear and anxiety may also improve economic decisions-making.

Rajagopal Raghunathan, then of New York University and Michel Tuan Pham of Columbia University demonstrated the same connection between anxiety and making decisions about gambling and job selection.

They conducted three experiments and found that sad individuals select high risk / high-reward gambling and job options, whereas anxious individuals are biased in favor of low-risk / low-reward options.

Raghunathan and Pham posit that anxiety tends to motivate people to reduce uncertainty whereas sadness moves people to replace rewards.
They suggest suggesting two different decision biases related to mood states.

Raghunathan and Pham add to Schweitzer, Brooks, and Gino’s recommendations for mitigating decision bias:

• “Monitor feelings”
• Consider alternate options
• Speculate on future moods and preferences if each option were selected: “What would I feel better about . . .?”

-*How do you mitigate the potential decision bias when anxious or sad?

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Memorable Business Stories: Ideas and Numbers
Business Influence as “Enchantment”

• ©Kathryn Welds