Social identity, affective forecast, and psychological hedging

Emotions play an important role in guiding our actions, particularly when future outcomes involve risk and uncertainty.

Previous psychology research has shown that people often mispredict their emotional responses to future outcomes and suffer regrets and disappointments as a result.

The aims of the proposed research programme are firstly, to examine a potential contributing factor of this misprediction. We posit that ‘social identity’ – defined as a person’s sense of belonging to a social group could influence individuals to over- or underestimate the impacts of future outcomes on their emotional wellbeing.

The second objective is to test whether such a bias can be mitigated. We propose a novel behavioural mechanism called ‘psychological hedging’, in which people are given the opportunity to offset the risk of negative emotional responses to unwanted outcomes against a monetary compensation.

The findings from this research will contribute to our understanding of the underlying psychological mechanisms that drive human decisions and the extent to which they affect our psychological wellbeing.