The Affect Heuristic

Revision as of 18:17, 28 February 2021

Created by Marie-Louise Wolfsberg Schmidt, February 2021

Abstract
The affect heuristic is the process of using the somatic markers as a short-cut to make quick decisions or judgments. The experimental part of the human mind has the ability to tag objects and experiences with emotions. These tags are defined as somatic markers in Paul Slovic et al.’s paper on the affect heuristic^[1]. This can be done consciously, but in most cases, it is done unconsciously, even before the mind has had the time to think up rational justification. With enough experience and knowledge, this method of making decisions can be highly efficient and flexible – especially when it is used consciously ^[1]

However, affect can easily be manipulated. It can even be manipulated by our own mind and priorities. Bounded rationality is the process where we make a decision that will satisfy rather than optimize a situation ^[2], while bounded awareness is our ability to filter information and impressions ^[2]. Both limit the efficiency of our decisions since it keeps the mind from realizing all possible outcomes. Also, our environment can manipulate the information we receive and how it is presented. All affect how we feel about situations and outcomes.

In addition, the somatic markers offer the ability to anticipate outcomes ^[1], which means it is useful in risk management. If the decision-maker has had a similar experience to the situation they are analyzing, they can quickly use the affect heuristic to identify risks, their probability, and their impact. People tend to perceive risk and benefit differently from reality. Rationally high risk can yield high reward and vice versa. However, most people find that when their personal benefit is high enough, the risk is less ^[1]. Therefore, it is essential to know what lies behind decisions. Understanding how the mind makes decisions can help backtrack bad decisions or even prevent them since the decision-maker is now aware of his/her bias. This article aims to combine the theory and discoveries from Slovic et al.’s definition of the affect heuristic with project management theories and standards to explain how it occurs and how it can be used in a project management setting.

Background

There exists a large amount of literature describing how decisions should be made in project management. Mostly the frameworks describe a procedure where the decision-maker takes his/her time communicating with experts, gathering knowledge, discussing with group members, being challenged on their view, and come up with all possible alternatives and their potential outcomes. But what do we do when one person has a minute or maybe seconds to decide? In that case, it is important to be mindful about what influences our decisions and how our mind works when it comes to prioritizing and judging. One of the influences comes from affect. And the way the brain uses it in judgment and decision-making is called the affect heuristic.

Paul Slovic et al. described the Affect Heuristic concept in 2002, with the idea that “images, marked by positive or negative affective feelings, guide judgment”^[1]. This article makes use of Slovic’s definition of affect:

“… affect means the specific quality of “goodness” or “badness” (i) experienced as a feeling state (with or without consciousness) and (ii) demarcating a positive or negative quality of a stimulus.” ^[1].

The basic idea is that people tag memories or situations with varying degrees of affect (emotions they are experiencing in that moment). These tags can be used as short-cuts in decision-making. The tags are described as somatic markers by Seymour Epstein, who discussed this concept in 1994 ^[3]. When a situation triggers a memory, the somatic marker is used to anticipate if the outcome will be positive or negative and thereby add arguments to the decision-making process ^[1]. Affective reactions to stimuli are often the first reaction^[1] and mostly happens unconsciously. This means that we usually have made an assumption or decision about a situation before we even know it. In some cases, this method can be easier and more efficient than going through a whole decision framework ^[1]. Understanding how the heuristic works can be valuable in situations where time is limited.

It can be difficult to grasp exactly what the affect heuristic is, but think of it as an estimator. An example could be someone who is looking to buy a new car. Here the estimator includes price, color, and size. But, if the decision-maker has had a bad experience with the car brand, or the salesman in the store, this can also be part of the estimation of whether he/she wants to buy the car or not. The decision-maker uses the positive or negative feeling about the previous experience to estimate whether the car is worth buying.

Affect is part of the descriptive decision study^[1]. It helps to describe how we actually make a decision in contrast to the prescriptive decision study, which develops methods for making optimal decisions ^[2]. Knowing how we actually make decisions can help us realize what keeps us from making the optimal decisions despite knowing the frameworks for optimal decision making. We prefer things that make us feel good and often decide based on that, then rationalize it afterward ^[1]. Affect also plays a prominent role in motivation ^[1]. We are usually motivated to do something we know we like or prefer to something we do not like. This knowledge is great to have for a project manager since, as a leader, he/she should be aware of how motivation works in the people involved in his project^[4]. Gathering and sharing information while making judgments and decisions is part of a project manager’s or a project team’s role. The Guide to the Project Management Body of Knowledge (PMBOK) states how important it is for the project manager to possess knowledge and experience about the project they are managing and their environment like their organization, stakeholders, and competition ^[4]. This is essential not just in their decision-making but also in other aspects of their project (i.e., internal and external communication). In a situation where the decision is based on autocracy^[4], the project manager might have to rely on his/her own experience, which is usually influenced by the affect heuristic. So being mindful about the bias that comes with affect might help him/her being more rational. Because of the numerous frameworks that have been created on how to execute a project optimally, organizations sometimes forget to let the project manager and team use their personal experience. This type of experience is difficult to measure and document, so it might be considered bias. But it is a mistake to discard affect entirely since it has the potential to lead to creativity and innovation – mainly to avoid situations that have been anticipated to have a negative outcome. A good leader and project manager should know about human behavior and motivation^[4], which is why the affect heuristic is a relevant topic when it comes to project management.

The Benefits of Affect in Decision Making

The affect heuristic plays a large role in the way we make decisions. Lacking the ability to combine feelings with experiences will prevent us from anticipating how our decisions will affect others and themselves, which means it is also part of making a rational decision ^[1]. We might end up making a decision that seemed to be optimal, but in the end, it will have large consequences. A study described in Slovic’s article also concluded that people with brain damage that prevent the ability to do this were not able to show any anticipatory responses to a situation, though they were exposed to a similar situation several times ^[1].

From this, the following benefits are identified: Firstly, it is gathered that the affect heuristic enables us to learn from our mistakes. This has contributed to the evolution and survival of the human. If we did not remember that we felt scared the last time we encountered a lion, we would probably walk right up to it, and this time get eaten.

This leads to the second benefit. The affect heuristic enables us to predict our future. Remembering how we felt about a situation allows us to know if the outcome of a specific situation will be positive or negative from our own perspective. In a project management setting, this is useful when doing risk management. At the beginning of a project, data and information might be limited, limiting the amount of proper analysis to identify any future threats or their impact. So the affect heuristic is excellent for brainstorming, and mapping risks, if the team or project manager has the right experience.

Third, it promotes thinking in alternatives. When a decision-maker uses the affect heuristic, it causes him/her to think of the decision’s different outcomes. The more likewise situations that have been tagged, the more alternative outcomes can be anticipated. These anticipations can then be used to decide on the probability of each outcome. If there are more positive anticipated outcomes than negative, the decision-maker will feel that the likelihood of a positive outcome is bigger than the probability of a negative outcome. The affect heuristic helps inspire thoughts about alternative outcomes. This also means identifying opportunities. Doing Projects – a Nordic flavor to project management mentions a “mindful” project, which means that the project team has developed a culture that enables every team member to identify these threats and opportunities ^[5]. You could also say that a mindful project manager is aware of the tendencies that occur in decision-making and can see through the upper layer of reasoning.

Lastly, it is a quick and flexible way to make decisions in situations where time is limited. It requires the decision-maker to be mindful of the knowledge he/she has about the situation. Acquiring knowledge about decision strategies can be a great way for a project manager to prepare for such decisions. Max H. Bazerman and Don A. Moore's book "Judgment in Managerial Decision Making" covers strategies for improving decision making, and references several sources on decision strategy^[2]. Reflecting on the affect that has an impact on a specific decision is part of some of the strategies described in their book. Some examples of where the heuristic comes into play are found in the strategy that includes the process of "debiasing your judgment" by identifying possible bias, and "reason analogically", which is the process of using previous lessons from likewise situations. Both will help debias a decision process^[2].

Limitations of the Affect Heuristic

The affect heuristic is, as mentioned, something that often happens unconsciously in our minds. Affect comes from how the person perceives situations from different perspectives and contexts. This means that there are several ways it can be manipulated, which limits the effectiveness depending on the affect heuristic in decision-making. Bounded awareness and bounded rationality are some of the limitations of the affect heuristic.

Bounded awareness and rationality

The human brain receives an enormous amount of information every single day. To avoid information overload, the brain must filter through all this information. This happens unconsciously and depends on the person’s energy level, health, interests, and many other factors what information gets stored^[2]. Since the information includes the somatic markers, the affect heuristic is already very limited by our own ability to store information efficiently. The following describes various tendencies that lie within the bounded awareness term^[2].

Inattentional blindness describes our failure to see the obvious in a situation^[2]. This might cause a project manager to overlook important information or opportunities within his/her project. We only see what we are looking for, so an optimistic project manager might only look for opportunities and successes while missing vital warning signs that could lead to emerging threats. This is also part of the tendency of blindness to change. We are more prone to realize visual changes and overlook changes in our environment^[2]. This includes but is not limited to project team members’ behavior and stakeholder values, and social changes.

Focalism is a term used for describing the tendency where people focus too much on a specific event or situation and too little on situations that occur more frequently. The consequence is that people will overestimate the degree of impact the focal event will have on our “future thoughts” and emotional response^[2]. We tend to expect that one big event will have a more significant impact on us than many smaller events, and this can be highly ineffective when it comes to affective forecasting. Another consequence is the focusing illusion. This illusion describes the tendency to overweight the information we have been focusing on and underweight the neglected information ^[2].

In many cases, decision-making in a group setting comes with lots of advantages. The group can share critical information and discuss their experience. However, a study from 1985 showed that group discussion “… tended to increase the recall of information that supported the initially most popular (and ultimately winning) candidate even though this information was primarily shared before the discussion.” ^[6]. This will also limit the information needed to make the right decision based on the affect heuristic. A good project manager will provide a procedure, which promotes the sharing of new knowledge since it is his/her job to have a complete overview.

The lack of information keeps us from evaluating all possible outcomes and simplifying the decision, which leads to making a choice that will satisfy the stakeholders but might not optimize the project outcome. This is called bounded rationality and is an example of the lazy human brain. It confirms that we tend to deviate from rationality if we have not been given a decision-making framework, which encourages the project team to gather the necessary information and explore where information is lacking. The more relevant information that has been stored, the more precise is the somatic marker. More precise somatic markers provide better impression formation, judgment, and decision making^[1].

How we perceive risk and benefit

Another limitation is how we perceive risk and reward. It has been found that our perception of risk and benefit is negatively correlated^[1]. This means that an outcome with high benefit yields a low risk in many judgment situations and vice versa. An example would be a person who decides if they should smoke again to seem cool. For them, the benefit of fitting in with the rest of the group might be significant enough to make the risk of lung cancer seem small. This is interesting since high risk usually yields high reward, and low risk yields low reward. The same goes for when a decision-maker must choose between several alternatives. A study from 2020 done by Slovic et al. verified that the affect heuristic drives judgment in risk and benefit both in a situation with several alternatives to choose between and in a situation where a single option is evaluated ^[7]. It has also been found that this negative correlation would be enhanced under time pressure ^[1]. It is important to know this when deciding whether to take risks in a project since it can lead to overconfidence.

The Affect Heuristic in Project Management

Though the affect heuristic has significant limitations of the affect heuristic, the project management literature and frameworks can be applied to avoid affect being the main factor in decisions. Usually, good planning, documentation, and clear communication will prevent a situation where the limited time precludes evaluating alternatives and solutions.

Already knowing about the affect heuristic can help a project manager use critical thinking both for him/herself and his/her team members. This is part of the skill a project manager must possess^[4]. The affect heuristic is great when it comes to brainstorming. If paired with proper documentation, it can be a helpful tool when tracking the scope. This documentation could be in the form of a "Lessons Learned" document, which should be reviewed continuously^[4]. This should document both rational lessons and what each individual personally has experienced regarding the project. This will help team members understand each other and help streamline the understanding of the scope while also preventing bad decisions regarding setting requirements.

The same can be done for stakeholders. One of the mentioned limitations was the blindness to change. Documenting previous and current experiences with stakeholders might help predict changes in stakeholder visions or requirements. If a team member has worked with a stakeholder before and has previously experienced that, they tend to change their mind often, which felt stressful to him, the discussion of it might help the project manager to be prepared for sudden changes or reactions.

At the beginning of the scheduling of the project, the tasks are estimated from experience. The estimations are based on the person or group with the most experience^[4]. If this person or group had to something similar previously to the current project and felt stressed out or compromised on time, they might be more eager to up the task durations. The opposite can also happen. The person/group felt that they could have finished the different activities earlier, which could lead to underestimating the amount of time needed for the current tasks. As the project goes on, the project activities' actual duration may become clearer, so to avoid falling behind the project team has to consider that the tasks might take longer than anticipated and include slack in their schedule. The fact that affect is a response entails that we make assumptions about a situation. Documenting assumptions is also a recommendation from PMBOK, which then can use this documentation to predict task durations^[4].

It has been mentioned several times that the affect heuristic is helpful when it comes to risk management. The ability to predict outcomes will help identify risks, their probability, and their impact. Using a risk register or a SWOT-analysis together with the affect heuristic to get an overview of the potential risks and opportunities might lead to discovering risks that would not have been discovered. Good planning and risk management can help identify, incorporate and handle many threats to a project. But there is always the knowledge that we don not know, that we do not know^[8]. These are emergent risks and may call for immediate action. In this case, the project manager might actually have to rely on his instinct – including the affect heuristic. In this case, a good project manager has been able to filter through information and has enough experience to make the right decision. If this situation occurs, the project manager will usually have to explain his/her decision. Here, being mindful about the affect heuristic and think about what somatic marker and thereby experience was used, can help him/her explain and backtrack the decision.

These methods are described under the assumption that the decision-maker knows about the affect heuristic. But, as mentioned in the beginning, the affect heuristic happens whether we choose to use it or not. So the tool described in this article is not the affect heuristic itself, but the ability to know how much of an impact it has in a current situation, and knowing how to use it in collaboration with other decision-making tools.

Annotated Bibliography

Bazerman, M. & Moore, D. (2013): Judgment in Managerial Decision Making.
Judgment in Managerial Decision Making is a book that summarizes the various aspects of descriptive decision-making practice. Chapter 4, which describes bounded awareness, has been used to understand how people unconsciously filter information to avoid information overload and simplify complex decisions. The book also covers bias, overconfidence, commitment, and motivation while also discussing how to improve decision-making from a people perspective. Most importantly, it introduces judgment heuristics, including the affect heuristic. This article shortly mentions decision strategies, but more information on the topic can be found in this literature which references additional literature for further exploration.

Slovic, P., Finucane, M., Peters, E., & MacGregor, D. G. (2007): The Affect Heuristic. Reprinted from Gilovich, T., Griffin, D., Kahneman, D. (2002), Heuristics and Biases: The Psychology of Intuitive Judgment.
This paper describes the affect heuristic in detail and verifies its presence in decision-making through various studies. The article has provided the background information necessary to find how it can be used in a project management setting. Further research and exploration of the affect heuristic have been made by Slovic in collaboration with other authors.

Project Management Institute, Inc. (2017): Guide to the Project Management Body of Knowledge (PMBOK® Guide) (6th Edition). Project Management Institute, Inc. (PMI).
The book provides a framework for how to execute a project, program, or portfolio in theory. These methods and the use of standards should be incorporated in project management practice, mainly to avoid a situation where the affect heuristic is the optimal way of making a decision. However, it fails to describe how anything that involves people is, to some degree, unpredictable. Though it is possible to be prepared with a robust but flexible plan, unanticipated events will happen. It also fails to describe how to handle a situation where the project manager must think fast since it assumes that there will always be time for going through a process of requesting changes, which might not always be the case.

References

1. ↑ ^{1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 1.16} Slovic, P., Finucane, M., Peters, E., & MacGregor, D. G. (2007): The Affect Heuristic. Reprinted from Glivovich, T., Griffin, D., Kahneman, D. (2002), Heuristics and Biases: The Psychology of Intuitive Judgment.
2. ↑ ^{2.00 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10} Bazerman, M. & Moore, D. (2013): Judgment in Managerial Decision Making.
3. ↑ Epstein, S. (1994): Integration of the Cognitive and the Psychodynamic Unconscious. the American Psychological Association.
4. ↑ ^{4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7} Project Management Institute, Inc. (PMI), (2019): Standard for Risk Management in Portfolios, Programs, and Projects. Retrieved from https://app.knovel.com/hotlink/toc/id:kpSRMPPP01/standard-risk-management/standard-risk-management
5. ↑ Geraldi, J., Thuesen, C., Oehmen, J. & Stingl, V. (2017): Doing Projects - A Nordic Flavor to Managing Projects. Forlaget Dansk Standard
6. ↑ Stasser, G. & Titus, W. (1985): Pooling of Unshared Information in Group Decision Making: Biased Information Sampling During Discussion. In Journal of Pereonality and Social Psychology (1985). the American Psychological Association, Inc.
7. ↑ Skagerlund, K., Forsblad, M., Slovic, P. & Västfjäll, D. (2020): The Affect Heuristic and Risk Perception – Stability Across Elicitation Methods and Individual Cognitive Abilities. Frontiers in Psychology.
8. ↑ Project Management Institute, Inc. (PMI), (2019): Standard for Risk Management in Portfolios, Programs, and Projects. Retrieved from https://app.knovel.com/hotlink/toc/id:kpSRMPPP01/standard-risk-management/standard-risk-management.