We use the formalism of decision theory to develop principled definitions of emotional states of a rational agent. We postulate that these notions are useflfl for rational agent design. First, they can serve as internal states controlling the allocation of computations and time devoted to cognitive tasks under external pressures. Second, they provide a well defined implementation-independent vocabuhuy the agents can use to communicate their internal states to each other. Finally, they are essential during interactions with human agents in open nmlti-agent environments. Using decision theory to formalize the notions of emotions provides a formal bridge between the rich bodies of work in cognitive science, and the high-end AI m-ehiteetures for designing rational artificial agents.