Be careful when making big decisions while under stress

Before you make a major decision—like taking a new job, buying a house, or choosing which mutual fund to invest in—check your stress levels. Ditto for smaller, but important, decisions. Being under stress may affect your ability to make a smart, rational decision, according to a new review article published in the journal Current Directions in Psychological Science.

The issue isn’t that stress makes people over-emotional and unable to think rationally. Rather, stress acts like a pair of rose-colored glasses, causing you to play up the positive aspects of a choice and downplay any negatives.
Stress increases levels of dopamine, a brain neurotransmitter that plays an important role in reward-seeking behavior (this dopamine release partly explains why stress is associated with drug addiction). Stress makes you gravitate towards positive and rewarding stimuli and steer clear of the negative and punishing. Because of this, stress appears to help people learn from positive feedback and impairs their learning from negative feedback, explained the study’s co-author Mara Mather of the University of Southern California.

“Stress responses may result in a bias towards potentially rewarding options while diminishing avoidance of negative options,” wrote the authors of the study.  That means if you’re weighing the pros and cons of a potential new job, you may place more weight on factors like company perks or salary and less weight on factors such as a difficult boss or a long commute. Or, if you’re choosing a client to work with and you’re under a lot of stress, you may be swayed by his winning personality and overlook some of the flaws in his proposal.

If you know you have a big decision to make - try to lower your stress levels.  You can do this through relaxation exercises, yoga or simply going for a walk before you make a final decision. The researchers suggested that long term chronic stress can affect your decision making as much as short term - “acute” – stressors.  So working stress reduction into your daily life may make you a better decision maker.

The authors pointed out another interesting finding in the research.  Although men and women have similar decision making behaviors while under stress, when it comes to risk-taking decisions, the genders diverge. Studies show that under stress, men tend to increase risk-taking behavior in pursuit of greater rewards (stressed out men will make riskier gambles in a casino, for example, than non-stressed men), whereas women tend to play it safer under stress.

Since so many work-related decisions involve some degree of risk taking, it’s important to understand the effects of stress on your gender and your choices.