[Extract] Emotions are commonly viewed as subcortical eruptions impairing the rational guidance of behaviour. However, certain authors (e.g. Damasio 1994; LeDoux 1996; Loewenstein et al. 2001) have disputed this contrast, suggesting that rationality by itself would be overwhelmed and directionless were information not emotionally tagged for significance. Nonetheless, lapses of rationality continue to be blamed on emotional interference. This is especially true of irrational risk-reward choices made during financial market bubbles and crashes, choices considered by many as instances ofirrational exuberance and pessimism overwhelming rational economic agency (Shiller 2005). However, there are grounds for believing that the emotions of euphoria and fear displayed in markets may be more accurately described as shifts in confidence and risk preferences, caused by elevated levels of steroid hormones.
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The Leadership Hubris Epidemic: biological roots and strategies for prevention
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978-3-319-57254-3
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32
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Palgrave McMillan
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Cham, Switzerland
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10.1007/978-3-319-57255-0