Jennifer Lerner, director of the Harvard Decision Science Laboratory and CPL faculty member, is joined by doctoral student Viral Gandhi as they present and discuss the efforts of their lab to better understand the decision making process of leaders.
Anger is usually seen as a negative emotion, but it has at least one effect that would be useful in undoing the recession. Right now, banks aren't lending enough, and too many consumers are hiding whatever liquidity they have under their mattresses. Both banks and consumers need to be a little more risky.
When people feel blue, for instance, they tend to both overshop and—speaking of emotional, irrational behavior—overpay, by as much as 300 percent compared to when they are not depressed, as scientists led by behavioral economist Jennifer Lerner of Harvard reported this year.
The emerging field of decision science now has a permanent anchor at Harvard Kennedy School. The Harvard Decision Science Laboratory – a cutting edge research facility dedicated to examining the factors affecting judgment and decision making – opened its doors with a gala ribbon-cutting ceremony and series of lab tours on Friday, Dec. 5.
The first issue includes articles on Asim Khwaja’s research on the positive impact of the Muslim pilgrimage, the Hajj; Jennifer Lerner’s work on behavioral and decision science; and Nolan Miller’s study of food subsidies for the very poor.
Dr Lerner presented the results of some elegant research carried out in the immediate aftermath of September 11th. Her research showed that the perception of risk was strongly influenced by emotional factors, and that people were likely to make judgments on risk influenced by whether or not they were in states of anger or fear.
Some researchers say it has also been rich with examples of the ways in which shaken confidence -- and other psychological and behavioral factors -- affects individuals' financial decisions and the economy as a whole.