Positive emotions seem to drive decision-making in the world of microlending, according to a study by mediaX Thought Leader Brian Knutson, an associate professor of psychology, and Alexander Genevsky, a doctoral student in psychology.

Microfinance offers financial services to low-income people or those who do not have access to typical banking services. A loan can help those on the bottom of the economic ladder become upwardly mobile if, for example, the loan helps someone in a developing country to launch a new business, improve housing or fund education.

In particular, the photographs of loan applicants that prompted the highest positive emotional reaction resulted in the highest rate of lending. Applicants whose photos prompted the highest negative arousal were the least successful in garnering loans.

Based on their new research, Knutson and Genevsky believe it is possible that positive affect increases risk-taking – including giving to a needy stranger, as in the case of microfinance.

Read the entire Stanford News story by Clifton Parker HERE.