Emotional

Foundations

Madurika Nanayakkara
Behavioural Finance
Academic year – 2021/2022

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 Learning Outcome
At the end of the session, students should be able to;
1.Demonstrate the emotion theory and evolutionary
theory.
2. Analyse the effects of emotion on reasoning body
and mind

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 What is an emotion?

• Emotions are reactions that human

beings experience in response to events
or situations

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 Six Features of Emotions
• Cognitive antecedents - beliefs trigger an emotional
response

• Intentional Objects - Emotions are about something like a

person or situation

• Physiological arousal - Hormonal and nervous system

changes accompany emotional responses

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 Six Features of Emotions
• Physiological expressions - Emotions can be characterised by observable
expressions associated with a person’s functions.

• Valence - Emotions can be rated on a scale with a neutral point in the centre
and positive and negative feelings on the endpoints. Valence is a
psychological term that is used to rate feelings of pleasure and pain or
happiness and unhappiness

• Action tendencies - Emotions are linked to action tendencies. When you

experience an emotion, you often feel an urge to act a certain way. In some
cases, you might even feel compelled to take action

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 Emotion Theory
• If we understand where emotions come from and how they impact
our behavior, we will become better financial decision-makers.

• Can we control our emotions, or do they control us?

• Psychologists recognize that emotions include cognitive,

physiological, and overt behavioural elements.

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 History of Emotion Theory
• Cognitive psychologists’ theory - Early work on emotions explained emotions
in terms of cognitive processes so that an emotion is simply what we think
about a situation.

• Jame’s Theory (William James in 1884) – an emotion is a feeling resulting

from an autonomic response. The autonomic nervous system governs our
bodies’ involuntary actions, such as sweating, shaking, and even fleeing.

• Canon’s Theory (Walter Cannon) - physiological responses sometimes occur

without emotion (e.g., sweaty palms).

– Although he agreed with James that emotions are different from other 7
 History of Emotion Theory
Canon’s Theory (Walter Cannon) - physiological responses sometimes occur
without emotion (e.g., sweaty palms).

– he agreed with James that emotions are different from other states of the
mind because of how the body responds

– Cannon did not agree that autonomic responses differentiated emotions

because we can observe very similar responses with very different
emotions (e.g., you might clench your fists in joy or anger).

– Cannon also argued that people’s brains respond to a stimulus before

their body takes action. 8
9
Let’s watch this video

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 Evolutionary Theory
Darwin’s theory of evolution
• Traits that contribute to the survival of a species become
characteristics of the species in the long run.

• Less fit individuals do not survive, and fit parents pass their
characteristics on to their offspring. Species that do not adapt this
way become extinct.

• Darwin later argued that emotions, as well as physical traits, are

inherited and have become innate
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 Evolutionary Theory
Arguments of Evolutionary Theorists

• Our basic emotions have evolved to promote the survival of the species

• At times, a situation demands a quick response and there is no time for

deliberation.

• Indeed, many emotions are explained as rapid-fire innate responses to a

stimulus, with cognition taking a smaller role.

• An adaptive role is served because emotions lead to appropriate action and

communication
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Get away as quickly
as possible! It is the
emotional
expression that
communicates this

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 Evolutionary Theory…
• Not only do emotions serve as communicating mechanisms, they also serve
as infectious mechanisms,

• That is, emotions can create analogous emotions in the observer, and this
often occurs in a subliminal, noncognitive fashion.

• In one study, merely seeing the picture of another person smiling led to the
observer smiling in concert.

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 Evolutionary Theory…
• People observing emotions in a movie felt the same emotions as the ones
portrayed.

• People acting tensely transmitted tension to those watching.

• The ability of emotions to be “transmitted” is potentially important in the

context of social forces—a snowball effect occurs, with many people feeling
the same way at the time, not only because the original stimulus acts on
different people, but also because of the infectiousness of emotion

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Minds, Bodies, and Emotions

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 Minds, Bodies, and Emotions
• What is the source of emotions? We know that emotions are part of the
human experience, but how do they arise?
• The source of emotion includes cognitive, physiological, and evolutionary
aspects.
• Thought processes and emotion should not be viewed as separate, opposing
influences.
• Psychologists recognize that emotions include cognitive, physiological, and
overt behavioral elements.
• The reasoning of a person is the result of a complex interaction of the mind
and body, and an understanding of the process must include all aspects of
the being.

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 Minds, Bodies, and Emotions
• Evolutionary theories of emotion suggest that emotions are responses
resulting from evolutionary conditioning.
• Though these responses may be useful, do we choose them or are they
thrust upon us in response to a situation?
• Strictly speaking, we cannot choose our emotional response if an emotion is
an innate response to a stimulus.
• Even if our emotions are not consciously chosen, we all have the ability to
control the degree of an emotional response, at least to some extent.
• In the case of extreme emotional response, whether positive or negative, we
are all better off if we take a step back and attempt to consider the best
response carefully

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website, in whole or in part. 19