Understanding how people arrive at their choices is an area of cognitive psychology that has received attention. Theories have been generated to explain how people make decisions, and what types of factors influence decision making in the present and future.
Scientific research in such decision-making typically explores the influence of socio-economic and cognitive factors on financial behavior.
However, very little research has explored the holistic influence of contextual, emotional, and hormonal factors on preferences for risk in insurance and investment behaviors. Accordingly, the goal of this review article is to address the complexity of individual risky behavior and its underlying psychological factors, as well as to critically examine current regulations on financial behavior.
How Do Cognitions and Emotions Influence Risky Behavior Theories of judgements and decision-making have explored the influence of economic and psychological factors on risky behavior.
However, very little research has offered a holistic exploration of the influence of contextual, content, emotional, and hormonal factors on preferences for risk in insurance and investment behaviors. Moreover, in this review article, we aimed to address this gap: Accordingly, our review highlights a need to investigate how variation in these factors produces variation in decision-making under risk.
Utilitarian Expectations and Decision Norms Non-psychological e. These expectations are quite often unrealistic, as human agency psychological processing and behavior is assessed and measured with externally designed economic tools e.
In this article, we summarize theoretical and empirical evidence for the role of several major psychological and biological factors influencing human agency, expected normative acts and respective behavioral outcomes.
According to normative economics and descriptive psychology theories of decision-making e. Furthermore, human agents engaging in financial behaviors e.
A rational decision-maker must choose the alternative with the highest utility, independent of decision-making context i.
Crucially, normative theory implies that any information not pertinent to calculating the expected values of the options should not influence the choices.
For example, based on tasks with hypothetical monetary gambles, prospect theory Tversky and Kahneman, predicts that two psychological parameters contextual loss and gain framing and probability levels employed in the gamble underlie human risky decisions.
However, recent research Kusev et al. These experiments Kusev et al. Specifically, differences in contextual descriptions of risk e. Furthermore, theorists have argued that the particular combination of contextual factors, accessibility to content of decision-making utility, task type and demands, and computational skills trigger a particular type of behavioral response — normatively rational or irrational risky behavior e.
It is also well established that human agents experience decision-making information rather than relying on descriptions of decision-making information. For example, risky events in the real world are experienced sequentially and often without contextual summaries Hertwig et al.
However, some risky events are not experienced individually over time, but are reviewed retrospectively and can also immediately be inspected holistically as with learning about decisions from descriptions Tversky and Kahneman, Nevertheless, with both decision-making experiences agents refer to exactly the same utilitarian data before expressing their risk preferences.
For example, research in insurance decision-making Kusev et al. Specifically, respondents exaggerated the risk for accessible utilitarian events in memory, indicating that variation in decision content produces variation in preferences for risk Kusev et al.
Insurance decisions and other precautionary behaviors are aimed at minimizing or avoiding risk. Typically the benefits of taking precautionary actions exemplify risk-averse behavior Hershey and Schoemaker, ; Kusev et al. Health-related insurance behavior and private long-term care insurance are of particular interest for policy makers and the general public.
Results from a recent survey on retirement-planning behavior revealed that emotions might be important predictors of long-term care insurance purchase intentions Tennyson and Kyung Yang, More specifically, it was found that respondents for whom family is a greater source of life satisfaction express higher purchase intentions.
The authors suggest that strong emotional ties with the family may lead to a stronger desire to prevent burdening them with long-term care responsibilities Tennyson and Kyung Yang, Emotions and Emotion Regulation Strategies in Risky Behavior In this section, we will focus on the effects of emotions on decision-making.
Namely, some of the most influential theoretical and empirical perspectives on the complex interactions between affective processes and decision processes will be reviewed, followed by applications in insurance and investment decisions. In the last part of this section, we will introduce the concept of emotion regulation ER and present recent studies looking into the effects of the mechanisms people use to control emotions on their decision performance.
While mainstream economics tends to employ axiomatic normative assumptions about decision agency, research evidence from psychology and neuroscience provide strong empirical support for the effects of human emotions on risky behavior e.
The main efforts in the studies of emotion-decision interaction are in understanding the role of emotions in decision-making Loewenstein and Lerner, ; Damasio,and their neural underpinnings Panksepp, Several models and theories on the emotion-decision processes interplay attempt to explain and predict the decision consequences of affective factors.
Loewenstein and Lerner present a systematization of possible interactions between emotions and decision-making. One important theoretical contribution suggested by these authors is the classification of emotions as immediate or anticipated emotions. Anticipated emotions refer to the emotions people expect to feel as a consequence of choosing one decision alternative over another.
Expected utility theory or other consequentialist models assume that people predict utilitarian and emotional consequences associated with choice optionsand choose the option that maximizes positive emotions and minimizes negative emotions.
In contrast, immediate emotions include all affective states that the decision-maker has at the time of the decision.
These immediate emotions can be directly related to the decision context. For example, when a person experiences anxiety in front of a risky situation, or indirectly, when the decision-maker feels happy, and more optimistic about positive outcomes of a risky decision Loewenstein and Lerner, Notably, in the last few decades, economists have chiefly been preoccupied with studying anticipated emotions, such as regret and disappointment Loomes and Sugden,whereas psychologists have focused on immediate emotions Loewenstein, title = "Factors that Influence Prescribing Decisions", abstract = "BACKGROUND: Strategies to control the quality and cost of medication use are largely dependent on the ability to alter selection of medications.
actually the ultimate decision holder of which brand should be prescribed to their patients. Therefore, all the Conferences, promotional tools and drug samples. Influence is heavily depends on how the sales person The mindset and the factors, which influences the prescribing behavior of physicians and their practice in Greece and.
Next, factors that influence familial decision making regarding HPV vaccination are identified in the context of childhood vaccination and adolescent sexual health literatures.
Finally, future directions for maximizing HPV vaccination uptake are presented. involved in the drugs prescription decision making. Decision to the drugs prescription is influenced by many factors such as promotion of pharmaceutical companies, regulation, patient buying power, drugs External factors are ones affect an individual who is sure that internal process is .
Our survey of practising psychiatrists within Greater Glasgow & Clyde Health Board examines trends in prescribing choices and the factors that influence them. Results draw attention to areas where further education for both prescribers and their patients may be targeted to help promote collaborative decision making during treatment planning.
Assessment of factors which influence GP decision-making regarding medication use in patients with dementia at the end of life Dr Carole Parsons School of Pharmacy prescribing decisions in relation to the use of statins, quetiapine, aspirin, lisinopril, bendroflumethiazide, amlodipine, and zolpidem.