Academic journal article Journal of Cognitive Psychotherapy

Depressive Decision Making: Validation of the Portfolio Theory Model

Academic journal article Journal of Cognitive Psychotherapy

Depressive Decision Making: Validation of the Portfolio Theory Model

Article excerpt

A multi-dimensional model of decision making, based on modern portfolio theory, is advanced that proposes that individuals consider in making behavioral decisions and contemplating risk. This model is specifically applied to depressive decision making. According to this model, depressed individuals view themselves as having few current and future resources, low predictability and control, less maximization of positives, greater minimization of negatives, less utility for gains, more disutility for losses, higher stop-loss criteria, higher information demands, more regret, and more reliance on waiting as a strategy. Participants were 153 adult psychiatric patients who were tested on a 25-item Decision Questionnaire that assessed 25 dimensions of decision making and these responses were correlated with the Beck Depression Inventory. The results substantially supported the assumptions of a general portfolio theory of risk. Risk aversion and depression were related to most of the dimensions and depression was related to risk aversion. Less depression was related to maximizing positives as a goal, but was unrelated to minimizing negatives. Four factors accounted for most of the variance: General efficacy, discouragement, unpredictability, and risk aversion.

Cognitive models of depression have emphasized biases or distortions in information processing, perception of non-contingency, attributional style, and underlying schematic processes that confer vulnerability to further depression (Abramson, Metalsky, & Alloy, 1989; Beck, 1987; Beck, Rush, Shaw, & Emery, 1979; Clark, Beck, & Alford, 1999; Ingram, Miranda, & Segal, 1997). Depressed individuals show a bias toward recalling and predicting negative events, blaming themselves for negative outcomes, not taking credit for positive outcomes, and maintaining negative assumptions and schemas even when the individual is not symptomatic. Cognitive models of depression propose that depressed individuals have distortions or biases in their thinking, such that they selectively attend to negative information (Beck et al., 1979), attribute negative outcomes to themselves and positive outcomes to external or situational factors (Abramson, Seligman, & Teasdale, 1978), or ruminate about negative experiences (Nolen-Hoeksema, 2000). Although there is considerable empirical evidence supporting these different cognitive models of depression, there are few data on the factors that affect the willingness of depressed individuals to change.

Normative models of decision making propose that individuals would consider all alternatives, objectively weigh the costs and benefits of each option, and focus on future utility rather than past disutility (or "sunk costs") (Baron, 1994). However, individuals seldom follow the normative model in their mundane decisions that are determined more by heuristics and regret-aversion than by exhaustive searches and hedonic calculus (Baron, 1994; Kahneman & Tversky, 1979; Simon, 1979). Although cognitive models of depression have established biases in information processing, judgment and explanatory style, there has been little focus on the issue of how depressed individuals make decisions. An exception to this is the work on helplessness and hopelessness depression that does address the issue of how depressed individuals view their future prospects for rewards (Abramson et al., 1989, 1978; Alloy, Abramson, Metalsky, & Hartledge, 1988). According to these models, individuals will manifest hopelessness about future positive outcomes if they believe that their current negative outcomes are due to stable and internal causes (such as lack of ability) and if they believe that positive outcomes are due to luck or low task difficulty (Abramson et al., 1978).

Portfolio Theories and Decision Making

Decision making may be viewed as a core problem in depression, since depressed individuals may either persist in non-rewarding patterns or may prematurely give up in the face of helplessness (Beck, 1987; Leahy, 1997a). …

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