When Negative Emotions Foster Better Economic Decisions

Abstract

This article examines the positive effects of negative emotions. Through a review of different studies and theories, it is shown that emotions such as fear, sadness, or regret, when experienced moderately, can promote more analytical and detailed information processing, which may lead to better economic decisions. Specifically, it analyzes how negative emotional states can induce more accurate behaviors within the financial domain. The article concludes by emphasizing that these negative emotions serve an adaptive function that, under certain circumstances, allows individuals to learn from their mistakes and steer their behavior toward more reflective strategies, challenging the traditional view that only associates negative emotions with unfavorable outcomes.