As well as judgment biases, identity and prosocial motivations emotions also exert a powerful influence on economic decision making. This lecture overviews the literature on the role of a diverse range of emotions on economic decision making.

***Loewenstein, G. (2000). Emotions in economic theory and economic behavior.  American Economic Review: Papers and Proceedings, 90, 426-432.

***Loewenstein, G. (1996). Out of control: visceral influences on behavior.  Organizational Behavior and Human Decision Processes, 65, 272-92.

Recommended Readings:

Edward L. Glaeser, 2005. "The Political Economy of Hatred," The Quarterly Journal of Economics, MIT Press, vol. 120(1), pages 45-86, January.

"Exotic Preferences" by Lowenstein

Elster, J., (1996) Rationality and the Emotions," Economic Journal, Royal Economic Society, vol. 106(438), pages 1386-97, September.

Elster, J. (1984), Ulysses and the Sirens, rev. ed., Cambridge University Press.

Elster, J. (1998). Emotions and economic theory. Journal of Economic Literature, 36, 47–74.