Introduction
In this blogpost I will provide a summary and elucidate the scientific concepts described in the paper ‘’Risk as Analysis and Risk as Feelings: Some Thoughts about Affect, Reason, Risk, and Rationality’’ by Paul Slovic, Melissa L. Finucane, Ellen Peters and Donald G. MacGregor (2004). The paper is part of the course Risk, Society and Governance (RIS515). Which is taught during the Master Risk Management at the University of Stavanger. If you want to study this paper, you can download the flashcards I made down below. Import the .text file into the Anki application.
Three different ways of viewing risk
Contemporary risk management deals with risk in three different ways: 1) Risk as feelings, which is a instinctive and intuitive approach to risk. 2) Risk as analysis, an scientific approach to risk. 3) Risk as politics. Slovic (1999) argued that the way in which a risk is defined determents its outcome. Which makes that risk can be seen as a political instrument. The cartoon street calculus by Garry Trudeau (1994) shows that our primary mode of assessing risk is risk as feelings. Most risk are handled automatically. The authors of the current article define this as the ‘’experiential’’ mode of thinking.
The importance of Affect
The authors argue that affect plays an import role in this mode of thinking. Affect refers to the subjective experience of feeling something as either good or bad, and it plays a role in evaluating the positive or negative quality of a stimulus. For example, you are presented with two options: Option A and Option B. Your affective response might lead you to feel positive about Option A and negative about Option B, even before considering the potential outcomes of choosing either option. The affective response serves as a quick evaluation of the desirability or aversion associated with the options. The authors argue that this reliance on affective responses as a mental shortcut, known as the “affect heuristic,” can influence our decision-making processes.
The experimental and the rational mode of thinking
Affect is part of the experimental mode of thinking. And its relevance is increasingly recognized by decision researchers. The experimental and the rational mode of thinking are in constant interaction with each other. Moreover, affect was fundamental in the development of rational thinking. Damasio (1994) argued that our thoughts consist of images which are marked by a positive or negative feeling. These images altogether can be described as the ‘’affect pool’’. When making a decision people consult the affect pool in order to determine what to do. This way of decision-making requires les reinking then weighing all of the pros and cons. It is a mental shortcut and can therefore be labelled as a ’’heuristic’’.
Early risk reaserche:
The autors go on to describe a number of studies conducted that formed the foundation for risk perception and jugement. These publications and there main findings are listed below.
Fischhoff et al. (1978): In this study, participants were asked to rate the risks associated with various hazards, such as nuclear power plants and cigarette smoking. The researchers found that feelings of dread and fear were the primary determinants of risk perception, rather than factors such as statistical likelihood or expert opinion. They also found that people’s judgments of risk and benefit are negatively correlated, meaning that as perceived risk increases, perceived benefit decreases, and vice versa.
Slovic (1987): This study extended the findings of Fischhoff et al. by examining risk perception for a broader range of hazards, including natural disasters, food additives, and nuclear war. The researchers found that risk perception was strongly influenced by feelings of fear, which were associated with the potential for catastrophic consequences, lack of control, and unfamiliarity with the hazard.
Alhakami and Slovic (1994): The researchers found that the inverse relationship between perceived risk and perceived benefit is linked to the strength of positive or negative affect associated with that activity. This means that people base their judgments not only on what they think about an activity but also on how they feel about it.
Finucane et al. (2000):
Participants were provided with four different kinds of information designed to manipulate affect by increasing or decreasing perceived benefit or perceived risk for each of three technologies. The researchers found that affective evaluation influenced judgments of risk and benefit directly and was not simply a response to a prior analytic evaluation. The inverse relationship between perceived risks and benefits increased greatly under time pressure when opportunity for analytic deliberation was reduced.
Study: Ganzach (2001)
Main finding: Analysts base their judgments of risk and return for unfamiliar stocks upon a global attitude. If stocks were perceived as good, they were judged to have high return and low risk, whereas if they were perceived as bad, they were judged to be low in return and high in risk. However, for familiar stocks, perceived risk and return were positively correlated, rather than being driven by a global attitude.
Loewenstein et al. (2001) proposed the “risk as feelings” model, which suggests that individuals’ risk perceptions are influenced by their emotional reactions to potential outcomes rather than just objective probabilities. They argue that people are more likely to take risks when they experience positive emotions and are more risk-averse when experiencing negative emotions. The authors suggest that this can explain a wide range of behaviours, such as gambling, drug addiction, and even financial decision-making.
Study: Denes-Raj and Epstein (1994)
Participants were given a choice between drawing from two bowls of jelly beans, one with more red beans but a smaller proportion and the other with fewer red beans but a better probability of winning.
Results showed that individuals often chose the bowl with more red beans despite knowing the probabilities were against them, as images of winning beans convey positive affect that motivates choice.
Study: Slovic et al. (2000)
Experienced forensic psychologists and psychiatrists were asked to judge the likelihood that a mental patient would commit an act of violence within six months after being discharged from the hospital.
Findings showed that clinicians who were given risk assessments framed in terms of relative frequency (e.g., “of every 100 patients similar to Mr. Jones, 10 are estimated to commit an act of violence to others”) labeled Mr. Jones as more dangerous than those who were shown the statistically “equivalent” risk expressed as a probability (e.g., “Patients similar to Mr. Jones are estimated to have a 10% chance of committing an act of violence to others”).
Yamagishi (1997): Judges rated a disease that kills 1,286 people out of every 10,000 as more dangerous than one that kills 24.14% of the population.
Hendrickx et al. (1989): Warnings were more effective when presented in the form of vivid, affect-laden scenarios and anecdotes rather than relative frequencies of harm.
Sanfey and Hastie (1998): Respondents given narrative information more accurately estimated the performance of a set of marathon runners than those given information in bar graphs or data tables.
Pennington and Hastie (1993): Jurors construct narrative-like summations of trial evidence to help them process their judgments of guilt or innocence.
Lichtenstein et al. (1978): Publicized causes of death, such as accidents and homicides, were overestimated, while underpublicized causes, such as diabetes and tuberculosis, were underestimated, likely due to their affective charge and sensationalism.
Proportion dominance
Proportion dominance refers to the tendency for information presented as a proportion or probability to have a stronger impact on judgments compared to other types of information, such as monetary outcomes. It was first observed in a study by Slovic and Lichtenstein (1968) where participants rated the attractiveness of different gambles. The ratings were more strongly influenced by the probabilities of winning and losing rather than the monetary outcomes. This finding has been consistently replicated in subsequent research.
In a study by Slovic et al. (2002), participants were asked to rate the attractiveness of a gamble with a win probability of 7/36 and a win amount of $9. Another group rated a similar gamble but with the addition of a small loss (29/36 chance of losing 5 cents). Surprisingly, the addition of the small loss dramatically increased the attractiveness ratings, with almost no overlap between the distributions of responses for the two groups.
Further analysis using conjoint analysis revealed that participants placed significantly greater weight on probability than on the monetary payoff when judging attractiveness. Despite participants’ belief that they were weighing probability and payoff equally, the actual weighting showed a 5 to 16 times greater emphasis on probability.
The researchers propose an explanation based on the concept of affective mapping. They suggest that probabilities have a relatively precise mapping onto the attractiveness scale because they have clear upper and lower bounds. In contrast, monetary outcomes have a more diffuse mapping, as people may have difficulty determining whether a specific amount is good or bad. Thus, when the $9 payoff was presented alone, it was dominated by the unattractive impression created by the low win probability. However, when a small loss was added, it provided a context that made the $9 payoff more meaningful and attractive. The more precise and favourable impression of the win/lose ratio had more weight in the judgment process, leading to an overall increase in the perceived favourability of the gamble.
Proportion dominance also has implications in the context of life-saving interventions. Studies conducted by Baron (1997), Fetherstonhaugh et al. (1997), Friedrich et al. (1999), and Jenni and Loewenstein (1997) found that when evaluating different interventions aimed at saving lives, people tend to prioritize the proportion of lives saved relative to the population at risk rather than the actual number of lives saved.
Insensitivity to probability
Insensitivity to Probability refers to the phenomenon where variation in the probability of an outcome has little impact on people’s evaluations and emotional responses when the consequences carry strong affective meaning. For example, when it comes to scenarios like winning the lottery or dealing with a life-threatening illness like cancer, individuals’ images and feelings are likely to be similar regardless of whether the probability of winning or surviving is extremely low or slightly higher. In such cases, people tend to have an “all or none” response that is more sensitive to the possibility rather than the precise probability of positive or negative outcomes. Consequently, even very small probabilities can carry significant weight in decision-making.
This insensitivity to probability helps explain certain paradoxical findings, such as the coexistence of widespread gambling and the purchase of insurance. It also sheds light on why societal concerns about hazards like nuclear power or exposure to trace amounts of toxic chemicals persist despite information about the low probabilities of adverse consequences. Research by Rottenstreich and Hsee (2001) supports these arguments, demonstrating that when the potential outcome of a gamble holds strong emotional significance, its attractiveness or unattractiveness remains relatively insensitive to considerable changes in probability, even from 0.99 to 0.01.
The failures of the experiential system in decision-making can be attributed to two factors. First, our affective reactions can be deliberately manipulated by external influences, such as advertising and marketing, which can distort our behaviors (Slovic et al., 2002). Second, inherent biases of the experiential system limit its effectiveness in evaluating certain stimuli that are not amenable to valid affective representation (Slovic et al., 2002).
Failures of the experiential system
One limitation of the experiential system is its tendency to be sensitive to small changes in the environment while being less responsive to larger changes further away from a reference point. This phenomenon, referred to as “psychophysical numbing,” can result in faulty judgments and decisions (Fetherstonhaugh et al., 1997). Additionally, when it comes to visceral factors like hunger, emotions, or pain, the experiential system’s immediate impact on behaviour tends to overshadow the consideration of delayed visceral factors. Anticipating and recalling these feelings in a veridical manner is challenging, contributing to the phenomenon of addiction (Loewenstein, 1999).
The decision to smoke cigarettes exemplifies the difficulties that experiential thinking faces in dealing with outcomes that change slowly over time, are remote in time, and have visceral impacts. Recent research suggests that young smokers tend to act experientially, driven by the affective impulses of the moment and enjoying smoking as something new and exciting, rather than consciously weighing the risks (Slovic, 2001). Many smokers express intentions to quit, but nicotine addiction, a visceral condition, often keeps them trapped in the habit (Slovic, 2001).
The failure of the experiential system to protect young people from smoking is evident in survey responses where the majority of adult and young smokers express regret about starting smoking if they had the chance to do it over again (Slovic, 2001). This discrepancy between decision utility and experience utility highlights the difference between the anticipated utility at the time of decision and the actual hedonic experience that occurs (Kahneman, 1994; Kahneman & Snell, 1992; Loewenstein & Schkade, 1999).
In summary, while the affect heuristic and experiential thinking are fundamental to risk assessment and survival, they are not without flaws. Deliberate manipulation of affective reactions and inherent biases of the experiential system, as observed by Slovic et al. (2002), can lead to faulty judgments. The difficulty in accurately evaluating certain stimuli and the overpowering influence of immediate visceral factors, as discussed by Fetherstonhaugh et al. (1997) and Loewenstein (1999), further contribute to the limitations of experiential thinking in decision-making processes.
Can Risk Analysis Benefit from Experiential Thinking?
the paper highlights the potential benefits of incorporating experiential thinking into risk analysis. The study emphasizes that even activities traditionally approached analytically, such as proving mathematical theorems or making chess moves, can be enhanced by experiential guidance. It suggests that relying on stored knowledge of winning patterns helps mathematicians evaluate the validity of proofs (de Groot, 1978). The importance of considering softer values and emotions in risk analysis is also discussed, citing the Academy report “Understanding Risk: Decision Making in a Democratic Society” as a blueprint for this approach (National Research Council, 1996). The paper illustrates a case where a risk analysis devoid of feeling, commissioned by Philip Morris, resulted in controversy and necessitated an apology (New York Times, 2001).
How Can an Understanding of ‘Risk as Feeling’ Help Us Cope with Threats from Terrorism?
The research conducted by Rottenstreich and Hsee (2001) is presented. The study demonstrates that events associated with strong emotions can overwhelm individuals, even if their likelihood is low. The paper suggests that while risk as feeling tends to exaggerate frightening consequences, risk as analysis provides a more accurate assessment of likelihood. An example is provided where fear may lead individuals to consider purchasing a handgun for protection against terrorists, but it is essential to analyse evidence showing that a gun fired in the home is more likely to harm oneself or a loved one than an unknown intruder. The section also raises questions about the role of risk analysis, the limitations of quantitative models in predicting terrorist attacks, and the need for research to develop experiential risk analysis skills.
In conclusion, the paper highlights the significance of affect in understanding and responding to risk. It emphasizes that meaningful information, including statistics and measures of risk, must be infused with affect to be properly understood and acted upon. The paper suggests that the affect heuristic, which integrates affective feelings within the experiential system, plays a crucial role in rational decision-making in many situations. However, it acknowledges the limitations of the affect heuristic when the actual consequences differ significantly from anticipated outcomes. The study concludes by acknowledging the nascent state of scientific research on affective rationality and the potential for future studies to help humans harness the affect heuristic effectively in risk analysis and other domains.
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