Emotion is Making Us Rethink How We Make Decisions

Is logical, rational thought the best way to make decisions? Much of our history in the sciences and humanities has reached that conclusion. Yet, emotion, often discounted or seen as a negative influence, may be inaccurate.

Researchers are challenging the long-held belief that logical analysis is the supreme route to effective decision-making. They point out the marginal role rationality plays in our decision-making process and stress the significant impact of emotions.

This perspective is supported by a study on wine tasting, which showed that the perceived cost of wine influences its enjoyment. This finding challenges our heavy reliance on logic and highlights the critical role of emotional involvement in fostering confidence in our decisions. The researchers argue for a harmonious approach incorporating instinct and intuition into making decisions.

While rational, analytical thought is often regarded as the pinnacle of decision-making, Professor Baba Shiv of Stanford Graduate School of Business suggests otherwise. Questioning the dichotomy between reason and emotion, Shiv asks, "Is a good decision based on reason? Or is it based on emotion?" . His work has been featured in?CNN,?Fox Business,?Financial Times,?The New York Times?and?The Wall Street Journal.? Throughout his career, he’s researched how brain structures related to emotion and motivation affect our choices.

Shiv delves into the intricate neurology behind our choices, presenting evidence contradicting the traditional emphasis on reason and rationality. He advocates leveraging our emotions and instincts to make meaningful choices rather than solely relying on analytical reasoning.

The assumption that rationality is central to effective decision-making and societal function is deeply ingrained in Western thought post-Enlightenment. It’s an idea Shiv traces from Aristotle to Descartes to the present, but one that “forgets that we have evolved with emotion. If emotion were irrelevant, we would have evolved very differently.”

According to his findings, rational thought constitutes 5 to 10% of our decision-making process, with emotions playing a pivotal yet often unrecognized role. “Emotions… have a profound influence on our decisions and we aren’t aware of it,” he says.

In a revealing study on wine tasting, Shiv observed that participants' perceptions of wine quality were influenced by price, leading to heightened pleasure for wines they believed were more expensive. This phenomenon underscores the influence of subjective beliefs on pleasure and satisfaction.

In fact, only three wines were used — two were poured twice, and each was marked with a fake price ranging from $5 to $90. As the participants tasted each wine, Shiv monitored their brain activity.

“What intrigued me was that people swore that the more expensive the wine is, the better it tastes,” Shiv says.

“And the question I had was: Is this just a figment of our imagination? Or is the brain extracting more pleasure when the wine is more expensive?” That is exactly what his results found: “The area of the brain that codes for pleasure shows greater activation when the brain thinks it is tasting a higher-priced wine than when it’s tasting a lower-priced wine, even though subjects tasted the same wine.”

Shiv emphasizes the importance of emotions not just in making decisions but also in committing to them. He introduces the concept of "decision confidence," the assurance that our choice is right, as a vital component of effective decision-making. According to Shiv, it is less about making the "right decision" and more about being confident in the decision made. “If you emerge from the decision with doubts, you’re more likely to give up too early and not persist in the course of action you adopted,” he says. “You need to emerge from the decision feeling confident. It’s not making the ‘right decision’ but making the decision right.”

Shiv's work encourages a broader perspective in a society that values rationality, especially in the business realm. He proposes that adopting an approach akin to that of an artist, which embraces instinct and intuition, can lead to better decision-making outcomes.

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