The varying roles played by emotion in economic decision making

•Emotions influence economic decision-making at three different entry points.•Anticipated emotions are those forecast to be felt when outcomes are revealed.•Two types of immediate emotions, felt at the time of the decision, are influential.•They are background (i.e., incidental) and action-related emotions.•These different layers of affect can lead to mixed emotion.

Emotions play complex roles in economic decision-making, particularly those involving risk. We discuss recent scholarship documenting three different entry points at which emotion can influence decision-making. First, decisions can be influenced by anticipated emotions, the feelings people forecast that they will experience once the outcomes of their decisions are revealed. Second, decisions can be swayed by immediate emotions, feelings felt at the time of decision. Immediate emotions fall into two categories. First are background emotions, or feelings people just happen to feel for incidental reasons at the time they make a decision. Second are action-related emotions, or feelings evoked as participants consider each decision option open to them. We discuss how emotions evoked at different entry points can lead to mixed emotions as people consider their choices.