Reason, emotion and decision-making: risk and reward computation with feeling

Area of Science:

• Neuroscience
• Cognitive Psychology
• Behavioral Economics

Background:

• Traditional models separate cognitive (rational, calculative) and emotional (heuristic, rapid) decision-making processes.
• The neural encoding of specific decision parameters and their relation to these processes is not well understood.

Purpose of the Study:

• To review research on the neural encoding of decision parameters.
• To investigate the correspondence between encoded parameters and decision-making frameworks.
• To clarify the roles of emotional and cognitive processes in risky choice.

Main Methods:

• Literature review of neuroscientific and psychological studies.
• Analysis of findings related to decision-making under uncertainty.
• Examination of theoretical frameworks in decision theory.

Main Results:

• Evidence suggests emotional processes encode precise quantitative parameters of financial decision theory.
• This challenges the notion that emotions exclusively use approximate, heuristic processes.
• A potential reorientation of emotional and cognitive contributions to risky choice is indicated.

Conclusions:

• Emotional processes may play a more quantitatively precise role in decision-making than previously assumed.
• This research reframes the understanding of how emotions and cognition interact in financial decision-making.
• Future research should explore the neural basis of these precise emotional computations.