Finally connecting with our feelings

Allowing unfiltered emotion to steer financial choices appears to be a formula for calamity. However, Jennifer Lerner, the Thornton F. Bradshaw Professor of Public Policy, Decision Science, and Management at the Kennedy School, discovered that anger proved beneficial, particularly for men, in a computerized betting scenario.

Lerner, along with National Institutes of Health researcher Rebecca Ferrer (a former student), co-directed a series of studies employing the Balloon Analog Risk Task, where participants earn greater amounts of money with each air pump into a virtual balloon, but lose it all if they overinflate and burst the balloon.

When men were prompted to feel anger, they undertook larger risks and ended up with more substantial winnings compared to neutral-emotion males or angry females. In contrast to earlier research that illustrated how anger could lower risk assessments and diminish the tendency to take protective measures among both genders, these studies centered on real risk-taking behaviors — demonstrating that anger motivated more audacious gambling, particularly among men.

Linking gender and emotion is always complex, Lerner observed. After all, adults cannot be randomly assigned to male or female categories, let alone discern whether disparities stem from biology, social influences, cultural factors, or something else. Yet, the discoveries provoke intriguing inquiries about how gender, emotions, and risk intersect in high-stakes arenas like entrepreneurs or financial markets, she mentioned.

“There’s a significant and captivating debate regarding whether men are generally more risk-taking, which our research only partially addresses,” Lerner stated. “It examines solely the influence of anger on financial risk-taking and the gender disparities therein.” 

To ensure the results are grasped in a broader context, she emphasized two points.

“Whether risk-taking is advantageous or detrimental is entirely contingent on the scenario,” Lerner stated. “Our studies were structured to reward risk-taking, but many real-world situations necessitate a more cautious approach.

“Additionally, while men and women may vary on average in how anger affects their financial risk-taking, there is greater variability within each gender than between genders. Thus, understanding someone’s gender will reveal less about their decision-making than comprehending their individual characteristics or social/cultural context.”

Emotion has been greatly overlooked as a factor in decision-making, as per Lerner. “Even though,” she remarked, “if you ask people on the street, ‘What’s crucial to comprehend in decision-making,’ they frequently respond ‘emotion.’” 

Her research contributes to a recent trend — studies analyzing how emotion influences decision-making have substantially increased, acknowledging that emotion can be either beneficial or maladaptive. More broadly, emotion now features prominently in new models of brain, mind, and behavior.

In essence, science is catching up to the prevalent use of emotion to influence behavior in marketing strategies. In studies led by students, Lerner’s lab has explored emotionally charged public health campaigns aimed at conveying the risks linked to tobacco consumption. One investigation, directed by Charlie Dorison, Ph.D. ’20, revealed that inducing specific types of sadness can counterproductively heighten smoking rates. Another, led by Ke Wang, Ph.D. ’24, found that gratitude can significantly facilitate smoking cessation. Both investigations arise from a broader line of research in Lerner’s lab exploring how emotion influences appetitive risk-taking behaviors (e.g., smoking, vaping, gambling).

In Lerner’s personal experience, being well-versed in risk afforded her something immensely valuable: her daughter. As a child, Lerner was diagnosed with lupus. Among other effects of the autoimmune disease, it was advised that she should never bear biological children: The risk of miscarriage was substantial, and her health could be severely compromised. She contemplated adoption, yet soon discovered that having lupus would greatly reduce her chances of being chosen as an adoptive parent.

Lerner could have allowed pervasive fear to dictate her decision about parenthood. Instead, she and her spouse delved into medical research.

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The objective was to explore emotions influenced by physicians’ advisories and prevalent notions prior to scrutinizing the true hazards. Was their anxiety peripheral or fundamental? How much ambiguity could they bear comfortably?

“We meticulously examined everything — all the scientific research we could locate,” Lerner remarked. “And we concluded that based on my health status at that moment and the medications I was taking, we could embrace the hazards.” Two months ago, that child — now an adult — graduated from university.

Professionally, Lerner investigates risk across various fields, including health, economics, national security, and (most recently) climate change. She is involved with multiple councils and boards, including the board of the Forecasting Research Institute, a nonprofit endeavoring to devise methodologies for quantifying the risk of existential dangers (e.g., AI domination). She is convinced that decision-making abilities are vital life skills for everyone and should be introduced at a young age. Thus, she also dedicates her time as an ambassador for the Alliance for Decision Education, a nonprofit offering free access to decision-making educational resources for K-12 institutions. Much of her teaching is focused on professionals worldwide engaged in roles intensive in decision-making — “from financial analysts to firefighters,” as she describes — within an executive education program that she instructs.

“In today’s society, the capability to effectively utilize information is an essential skill,” she stated. “That involves being clear on how to assess uncertainty, how to evaluate your confidence in those assessments, and how to discern the countless — both beneficial and detrimental — ways emotion may influence judgments. These aren’t merely instruments for leaders or analysts — they are for all of us.”

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