The Affect Heuristic

Abstract 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. The affect heuristic is using the somatic markers as a short-cut to make quick decisions or judgments. 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

However, affect can easily be manipulated. Bounded rationality is the process where we make a decision that will satisfy rather than optimize a situation, while bounded awareness is our ability to filter information and impressions . 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 get and how it is presented. This also affects how we feel about situations and outcomes.

The somatic markers also offer the ability to anticipate outcomes , 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 also 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 . 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 will 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 in a project management setting.

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 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 pp. 61). 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 pp. 65).

Inattentional blindness describes our failure to see the obvious in a situation (2 pp. 65). 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 pp. 68). 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 pp. 67). 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 pp. 68). In many cases, decision-making in a group setting comes with many 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.” (7 pp. 1476). This will also limit the information needed to make the right decision based on the affect heuristic.

The lack of information keeps us from evaluating all possible outcomes and thereby trying to simplify 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 haven’t 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 pp. 1342).

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 pp. 1342). 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 judgement in risk and benefit both in a situation with several alternatives to choose between, and in a situation where a single option is evaluated (8 pp. 4). It has also been found that this negative correlation would be enhanced under time pressure (1 pp. 1344).

The Affect Heuristic in Project Management

Risk Management

• The perception of risk and benefit
• Fig. 2 and 2A from the Affect Heuristic (reference 1)
• Defining risks

Benefits of the Affect Heuristic

• Promotes creativity
• Kahneman's system 1
• Quick decisions
• Flexibility
• When there isn't time for consideration of all solutions.

Limitations of the Affect Heuristic

• Manipulation of information
• Bounded Awareness
• Bounded rationality
• How to use systems thinking to acquire the knowledge needed to make better decisions.

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.

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.

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

Current -> May change

1. 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. Züst, R. & Troxler, P. (2006): No More Muddling Through: Mastering Complex Projects in Engineering and Management.

3. Bazerman, M. & Moore, D. (2013): Judgment in Managerial Decision Making.

4. 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. Epstein, S. (1994): Integration of the Cognitive and the Psychodynamic Unconscious.

6. Gilovich, T., Griffin, D. & Kahneman, D. (2002): Heuristics and Biases: The Psychology of Intuitive Judgement