🌡️ How Your Emotions Skew Your Choices
New research uncovers how your emotional state impacts the way you perceive risk-reward tradeoffs
We like to believe we steer our choices with logic, but often it's our emotions gripping the wheel. Our emotional states are deeply embedded in our decision-making, which can be a good thing at times. The way we instinctually feel about different options can be a quick and sensible shortcut for choosing the option we truly prefer.
Of course, the problem is that our emotions aren’t always welcome additions to our decision-making. Fear can deter us from tackling ambitious challenges for our own betterment, anger can nudge us toward regretful actions, and sadness can dissuade us from wanting to make any decisions at all.
It’s important to know how our emotions tend to bias our decision-making so we can notice when it’s happening and counteract it when necessary. Fortunately, a new study is offering fresh insight into one specific way that mood can influence our willingness to take risks.
⚠️ What the research says about how mood impacts risk tolerance
In a 2025 study published in Nature Communications Psychology, researchers investigated whether incidental mood states can bias economic decision-making. They recruited 94 participants across four experiments, exposing each person to different emotional conditions while they made choices about monetary rewards.
The core of the experiment followed a procedure of mood induction and economic decision-making:
Mood induction: Participants read emotional vignettes accompanied by similarly emotional music. For the happiness condition, they read scenarios like "You leave for a holiday and your destination looks like paradise" while upbeat music played. For sadness, they read scenarios like "Your beloved pet has passed away" paired with somber music. The neutral condition involved dry encyclopedic facts with no music.
Choice tasks: After each mood induction, participants completed a series of economic decisions. On each trial, they chose between a large reward that required a cost (e.g. exerting physical effort, taking a gamble, or waiting for a delayed payout) and a smaller, cost-free reward. This allowed the researchers to see whether induced moods would alter people’s willingness to “pay” extra in risk, effort, or time to get a bigger reward.
An analysis of participants’ self-reported mood scores before and after each mood induction confirmed that the vignettes effectively shifted emotional states as intended: happiness increased positive mood scores, sadness reduced them, and neutral trials caused little change.
Physiological measures—such as pupil dilation, skin conductance, and facial muscle activity—also added some objective verification to support the idea that mood manipulations had genuine bodily effects, not just self-reported ones.
The most important finding was that these induced mood changes reliably influenced economic choices. After experiencing the happiness induction (compared to the neutral induction), participants were significantly more likely to choose the costly, high-reward option. After sadness inductions, they became more cautious and chose the less rewarding, less risky option more often.
This effect was not limited to one type of cost: the mood-induced shift appeared across risk-based, effort-based, and delay-based decisions. In other words, being in a good mood made people more willing to gamble, to work harder, or to wait longer in order to secure a bigger reward.
To dig deeper, the researchers used computational modeling to figure out exactly how mood was affecting people’s decisions. Mood didn’t change how people weighed up the size of specific rewards or costs. Instead, mood acted more like a “nudge” that made people more or less willing to embrace risk for reward overall. When people were happy, this nudge consistently pushed them toward picking the bigger, riskier option. When they were sad, it nudged them away from it. So rather than changing how people calculated risks and rewards, mood seemed to shift their overall tendency to choose risk.
These results suggest that even fleeting emotions—triggered by something as simple as a brief story and music—can sway decisions in meaningful ways, with implications for how we approach our financial choices and our risk tolerance.
⭐️ Takeaway tips
#1. Don’t jump on risky decisions during high emotions
Feeling happy and energized may boost your confidence and openness, but it can also make you undermine the level of risk tolerance you’re usually comfortable with. When deciding whether or not to take on life-changing decisions, especially those involving financial or personal stakes, take a moment to pause, cool off, or even sleep on it before committing.
#2. Watch for mood-driven caution
If you’re in a down mood or feeling anxious, you might default to playing it safe—even when taking a calculated risk could be beneficial. Sadness can deter you from committing to sensible investments for your future. Recognize when your emotional state may be pulling you back unnecessarily, and consider seeking a second opinion or returning to the question when your mood stabilizes.
#3. Build awareness of emotional spillover
We often assume decisions are made in isolation, but moods from unrelated parts of your day (a bad commute, a funny video) can spill over into critical choices. Consciously check in with your mood throughout the day to remain aware of how your emotional states may feed into the decisions you need to make in life and work.
“Negative emotions depend on identification; if identification is destroyed in some particular case, they disappear. The strangest and most fantastic fact about negative emotions is that people actually worship them.”
~ P. D. Ouspensky