Sadder, but Not Wiser: The Myopia of Misery
Harvard University, 2011
Hundreds of studies have examined the “sadder-but-wiser” hypothesis—that sad people make wiser decisions—and most find support for it. However, such studies typically examined judgments and decisions in domains without precisely quantifiable, normative standards of “wisdom.” Moreover, virtually no tests of the hypothesis examined financial decisions, arguably the most frequent and consequential decisions people make. To address these gaps, the present experiments examined the effects of sadness on intertemporal financial choices of the form $X now versus $(X+Y) later—typical of the choices people make when considering whether to spend now or save to spend more later. Studies of intertemporal choices typically reveal extreme impatience. That is, people typically choose earlier rewards over significantly larger, later rewards, leading to regret. Would sadness reverse the typical pattern by increasing wisdom and decreasing impatience—per the sadder-but-wiser hypothesis? Three experiments show the opposite and quantify the exact financial disadvantage of sadness: Whereas the median neutral-mood participant was indifferent between receiving $19 today and $100 in a year, the median sad-mood participant became indifferent at only $4 today. Moreover, sadness increased impatience even though the emotion was normatively irrelevant to the choice...
In conclusion, these experiments, combining methods from psychology and economics, reliably reveal that sadder is not necessarily wiser. Instead, sadness made people more myopic, and thus willing to forego greater later gains for instant gratification. Given the number of societal problems resulting from a “need-it-now” mentality, these results may inform not only theories of emotion and financial decision making but also the formation of powerful interventions for optimizing decision-making environments
Full Text
Harvard University, 2011
Hundreds of studies have examined the “sadder-but-wiser” hypothesis—that sad people make wiser decisions—and most find support for it. However, such studies typically examined judgments and decisions in domains without precisely quantifiable, normative standards of “wisdom.” Moreover, virtually no tests of the hypothesis examined financial decisions, arguably the most frequent and consequential decisions people make. To address these gaps, the present experiments examined the effects of sadness on intertemporal financial choices of the form $X now versus $(X+Y) later—typical of the choices people make when considering whether to spend now or save to spend more later. Studies of intertemporal choices typically reveal extreme impatience. That is, people typically choose earlier rewards over significantly larger, later rewards, leading to regret. Would sadness reverse the typical pattern by increasing wisdom and decreasing impatience—per the sadder-but-wiser hypothesis? Three experiments show the opposite and quantify the exact financial disadvantage of sadness: Whereas the median neutral-mood participant was indifferent between receiving $19 today and $100 in a year, the median sad-mood participant became indifferent at only $4 today. Moreover, sadness increased impatience even though the emotion was normatively irrelevant to the choice...
In conclusion, these experiments, combining methods from psychology and economics, reliably reveal that sadder is not necessarily wiser. Instead, sadness made people more myopic, and thus willing to forego greater later gains for instant gratification. Given the number of societal problems resulting from a “need-it-now” mentality, these results may inform not only theories of emotion and financial decision making but also the formation of powerful interventions for optimizing decision-making environments
Full Text
