Emotions in economics

This chapter explores the complex relationship between emotions and decision-making, particularly from an economic perspective. It highlights the challenges economists face in translating emotional terms into economic language but underscores the significant role emotions play in influencing human behaviour. The chapter reviews various models for categorizing emotions and theories like the Affect-as-Information Model, Affect-Infusion Model, and appraisal theories, offering insights into how emotions shape decisions. Empirical methods used to study the impact of emotions on decision-making are also examined. These findings suggest that a deeper understanding of emotions is essential for grasping the full scope of human behaviour in economic contexts.