Decision making is often a highly emotional experience. Anticipating that one must make a decision, the process of actually making one, and experiencing its consequences can each generate intense emotions. However decision researchers have, until recently, generally assumed that emotions should be kept out of decision making as much as possible. Systematic study of decision-related emotions has emerged only in the last decade or so as a significant research topic. Some important steps have already been made. The research proposed here aims to extend these initial steps in three main directions. First, the research examines interactive decisions, where one individual's choices affect the outcomes of another's, and will study the impact of emotions on decisions involving risk, trust, altruism and other important social motives. Second, the research will move beyond earlier work, which has mainly examined the decisional effects of broad positive and negative emotional states, to investigate the effects of more specific emotions (e.g. fear, anger, happiness and sadness). Third, earlier studies have often relied on self-report measures of opinion, preference, or intended behavior rather than on observing actual behaviors that have significant real impacts on the decision makers. In contrast, the current studies will measure actual, incentive compatible behavior. These three extensions - social embeddedness, emotional specificity, and real outcomes - will bring the understanding of the interplay of emotions and decisions closer to the important societal questions we wish to illuminate: Which emotions increase or decrease the risk-taking behaviors, from those of high-level managers making strategic decisions to individual choices of health-related activities? How do emotions affect the building of trust in personal, political and business relationships? Which emotions increase or decrease contributions to important public goods such as public television or community development? In short these studies will systematically extend existing emotion and decision research into contexts of higher realism and specificity, and thus of greater relevance to the settings in which many of the most crucial human decisions are made.
