Stress and Decision Making: Why Stress Leads to Risky, Poor Choices

Many decisions are made under stress, and many decision situations are stressful themselves. Stress and decision making are thus related to each other. Often, stress will lead to risky and bad decisions. To avoid these low quality decisions under stress, we first must understand why they occur.

Stress and Decision Making Go Hand in Hand

Many decisions must be made under stress. Examples include making financial investments, choosing a strategy for a company, selecting answers during exams, or deciding on emergency medical action. In addition, some decisions naturally elicit stress—such as choosing to end life-support for a loved one or committing to a costly financial agreement. Clearly, stress and decision making are tightly connected.

How Decisions Are Made

Decisions vary in complexity. They may involve inference, evaluating the best outcome, or making social and moral choices. One key factor is uncertainty: the more uncertain the outcome, the harder the decision.

When outcomes are known, we tend to make strategic decisions based on rational thinking. These rely on executive brain functions like planning, categorization, and working memory—functions located in the prefrontal cortex of the brain.

When outcomes are unknown or vague, we tend to use intuition and emotion. This engages the limbic system, particularly the amygdala, which processes fear and anxiety.

Chronic stress—via high levels of the hormone cortisol—impairs prefrontal cortex function. This shifts decision making away from logic and toward emotionally driven choices, which tend to be riskier.

How Stress Affects the Brain’s Decision Circuitry

The prefrontal cortex is central to high-level thinking. Chronic stress disrupts its activity, pushing the brain to rely more on the amygdala. Emotions then override logic, and poor, impulsive, or risky decisions often follow.

Research shows that patients with prefrontal cortex damage choose riskier, disadvantageous options. Since chronic stress alters this brain region in healthy individuals, it similarly shifts decision behavior toward risk.

The Consequences of Stress on Decision Making

Stress undermines decision quality in several ways:

• Narrowing focus: Stress reduces the number of options you consider.
• Risk bias: Under stress, people—especially men—tend to favor risky options.
• Habit reliance: Stress makes people fall back on automatic or habitual responses, even when inappropriate.
• Impaired flexibility: Stress makes it harder to adapt decisions to new information.

Interestingly, if a stressful event is framed as a challenge rather than a threat, people make better decisions. A challenge mindset improves cognitive flexibility and motivation.

Stress, Risk, and Gender Differences

Stress changes risk-taking behavior differently across genders:

• In men, stress increases risk-taking.
• In women, stress often leads to more caution.

These patterns are linked to hormonal and brain-based differences in how men and women process stress.

Age also plays a role: older adults are generally more risk-averse than younger people under stress.

Social and Emotional Influences

Stress can affect decisions involving social trust and ethics. For instance:

• Stress can increase generosity and openness to advice.
• It may influence trust in others or decisions involving moral dilemmas.

In social settings, stress can skew decision making by activating the brain’s reward system, shifting focus away from long-term outcomes.

Common Decision Stressors

Several factors amplify stress during decision making:

1. Complexity

Complex decisions involve many variables and possible outcomes. The more difficult and high-stakes a decision, the more stress it creates—and the lower its quality may be.

2. Time Pressure

Time constraints force rapid decisions. While a little pressure can boost focus, too much impairs cognitive performance and planning.

3. Information Overload

Too much information overwhelms the brain. You may overlook important facts and focus on irrelevant details, leading to poor decisions.

How to Make Better Decisions Under Stress

Improving decision making under stress begins with regulating your emotional state:

• Reframe stress as a challenge: This helps shift your mindset and boosts performance.
• Use breathing techniques: Controlled breathing can activate the parasympathetic nervous system and reduce anxiety.
• Limit distractions: Simplify your environment and filter unnecessary information.
• Seek a second opinion: Other perspectives can counter emotional bias.
• List your options: Writing down choices can clarify thinking and reduce impulsivity.
• Strengthen communication: In teams, flatten hierarchies during high-pressure situations to improve information flow.

Executives in particular benefit from focusing on strategy rather than micromanaging operations. Delegating decisions can reduce overload, allowing leaders to make higher-quality, long-term decisions.

Conclusion

Stress and decision making are deeply intertwined. Chronic or acute stress distorts how we evaluate risks, limits flexible thinking, and increases the likelihood of poor choices. But by recognizing the effects of stress and actively managing them, you can make better decisions—even under pressure.