We commonly assume that if we are to behave rationality, we should better rely on cognitive decision making processes, such as balancing reasons, processing facts, calculating cost-benefits, and predicting statistical risks. Three business school professors, Leonard Lee ( Columbia ), On Amir (UCSD) and Dan Ariely (MIT) have posted on SSRN their article, In Search of Homo Economicus: Preference Consistency, Emotions, and Cognition, where they present findings from three experiments pointing to higher transitivity in emotional decision making systems than in cognitive processes. Rational behavior (calculated, forward looking, long term plan, self-control, value maximization) is commonly attributed to the cognitive, reason-based processes, while irrationalities (impulsivity, myopic, transitory behavior) is assumed to be aligned with emotional, feeling based judgments. This new study shows however that emotion based judgments manifest greater preference consistency over time, as compared to cognitive processes, suggesting better prediction of behavior in the former. They show that when participants relied on their emotional system â€“ encoding reality in images, metaphors, narratives, rather than words, numbers and symbols â€“ they acted more consistently and had fewer transitivity violations. In another experiment, they also show that participants that were under higher cognitive load (had to remember a long sequence of numbers) made fewer transitivity errors than those who ostensibly had more cognitive resources to process the decision problems.
Here’s the abstract, as Solum would say, “Download it while it’s HOT!”
Understanding the roles of emotion and cognition in forming preferences is critical in helping firms choose effective marketing strategies and consumers make appropriate consumption decisions. In this work, we investigate the role of the emotional and cognitive systems in preference consistency (transitivity). Participants were asked to make a set of binary choices under conditions that were aimed to tap emotional versus cognitive decision processes. The results of three experiments consistently indicate that automatic affective responses are associated with higher levels of preference transitivity than deliberate cognitive considerations, and suggest that the basis of this central aspect of rational behavior – transitivity – lies in the limbic system rather than the cortical system.
Posted by Orly Lobel