• Joumana Elomar

How Stress Impacts Decision-Making

There's a baseball bat and a ball. Together, they cost $1.10. If the bat costs a dollar more than the ball, how much is the ball? Take a moment to think about it. What's your gut saying? For most people, the intuitive answer is $1. However, when we do the math it doesn't add up. If the ball is 10 cents, then the bat is $1.10, so together they'd be $1.20. The correct answer is 5 cents, and $1.05.

When we're stressed, research shows that we're more likely to make decisions based on mental shortcuts. But is this the case across all decision-making? Are we always worse under stress? And how do we manage our stressors? Let's jump into it.

Decision-Making Under Stress

Making decisions is an extremely complex cognitive task. From a cognitive perspective, it involves perception, attention and memory. Meaning that our decisions are vulnerable to what we perceive, what we pay attention to and what we remember. Throw that on top of how our ability to think clearly changes when we're tired or anxious and understanding how stress impacts decision-making becomes a giant ever-evolving puzzle.

Breaking it down, here are some findings on stress impacts decision-making:

  • Impacts working memory: Our working memory is our capacity to hold information for brief periods of time. Studies suggest that short bursts of stress can improve memory but longer periods of stress slow down our working memory. Meaning our ability to hold onto information in the moment is affected.

  • Impacts attention: Under stress, our attention narrows. Our brains decide to focus on the most critical aspects of the dangerous situation, discounting the broader pieces of information related to our situation. This can impact the information that we are able to perceive when we're making a decision.

  • Increases reliance on mental shortcuts: The bat and ball scenario is an example of this! Relying on mental shortcuts isn't always bad, but it creates room for errors where biases can slip in. In one study, they showed that stress increases our loss aversion. So we become more sensitive to losses e.g. If a situation includes risky choices, we pay more attention to the potential loss and we're more likely to choose the risk-adverse option.

  • Impacts risk-taking behaviours: Multiple studies show that stress increases our levels of risk taking even if the outcomes are not beneficial. However, findings in this area are mixed due the inconsistency of methods used for testing. With decisions that involve higher uncertainty, studies report reduced risk-taking in women and increased risk-taking in men.

  • Increases risk of exhaustion: Stress can also lead to exhaustion, which can impair cognition including attention and working memory. One study showed that effects on the brain can still be seen three years later.

To tie it together, short bursts of stress can enhance decision bias by increasing our individual likeliness to risk, and our aversion to loss. While these short bursts can have positive impacts on our memory and attention, longer periods reduce our capacity to hold information and change what we pay attention to. This can skew our perspective and cause us to make poor decisions.

Are We Always Worse Under Stress?

Short answer: No. Stress can positively impact our productivity, decision-making and mental health. Long answer: Stress is the way our body and minds respond to external challenges. Depending on the stressor and how we respond, stress can be positive (eustress), or negative (distress).

When we perceive a challenge as within our coping abilities, we can experience eustress (a short-term response). For example, have you ever felt equally excited and stressed to apply for a new job? Or start a new project? Or move into a new house? Even though these changes can be sources of stress, we can feel motivated and focused in these situations. This is the product of eustress!

Keeping in mind: Eustress is based on perception so sources of eustress can vary greatly between people! What one person might feel anxious over can generate excitement for another. No two people are alike here. So how do we manage our stress?

Managing Stressors

As stress manifests differently for all people, how we manage it depends on the situation and our personalities. One way to approach it is to think about whether we can control or not control the situation. We can use different strategies to manage stress here:


  • Reduce the stressor: As obvious as this one is, try to reduce the stressor eg. If you're feeling fatigued from work, can you take a few days off? Or if you're feeling stressed by the news, can you limit your exposure? When we're feeling stressed, we don't think as clearly as we normally do and it can be difficult to break habits that contribute to our stress.

  • Prioritise your physical health: Sleep, meditation and exercise have all been shown to help us alleviate stress. When we meet our physical needs, we can better manage our emotions and cope with difficult situations.

  • Shift the situation: Is there anything you can do to change the situation? eg. If you're finding it difficult to focus, can you try productivity techniques? i.e. Pomodoro method. As the old adage goes, if you can't solve the problem then change the problem. And if you can't do anything to change it, it may not be within your control. Head to the strategies below!


  • Connect: When we get stressed out, it can be good to take a break from social things! But there's a difference between taking a break and isolating ourselves from our support network. When we cut off our friends and family, it creates the perfect echo chamber for negativity.

  • Do something good for others: Times of stress can make us feel really helpless. Doing something good for others can be a way to give us a sense of control. This is especially helpful in times of crisis, or when we feel like we really can't do anything.

  • Journal: Getting your thoughts down on paper has been proven over and over to help alleviate stress. One study shows that there are 17 health benefits to journaling, including less trips to the doctor, improved mood and greater feelings of mental well-being.

  • Reappraisal: If the stress is coming from within, changing how you think can help you reduce emotional exhaustion. So instead of 'This situation sucks' 'This situation is a great opportunity to X'.


  • Focus on the present: Do things you enjoy. Read a book. Feel the sun on your skin. Sometimes stress is caused by anxiety. As anxiety lives in the future, grounding ourselves in the present makes for excellent protection against it.

  • Carve out a 20-min worry session. If you really feel the need to stress over something, give yourself 20mins where you write down everything that you think could go wrong! Sometimes giving yourself the space to stress can help alleviate it.

Tying It Up

Wrapping up, stress can have both negative and positive impacts on our decision-making. Not all stress is bad for us, but it can increase decision bias, reduce our capacity to hold information and change what we pay attention to. This can distort our perspective when we make decisions and lead to poorer outcomes. As stress is a part of everyday life, learning how to cope and manage it is extremely important.