Decision Making
July 22nd 2007 23:03
Decision making is hard work. On any given day, we make thousands, if not tens of thousands, of choices – from what to wear, to what to make for dinner, to where to take a vacation. Some of these come easily, but others drive us to distraction or, worse, drive us to bad decisions. Why? Because we all fall prey to a variety of subconscious habits that interfere with our thinking. Luckily, research into the psychology of choice suggests that you can avoid many of those pitfalls. “Understanding where your particular problems arise is a necessary first step to overcoming them,” says Princeton University psychology professor Daniel Kahneman, who won the 2002 Nobel Prize in Economic Sciences for his study of how consumers make decisions. “It can be difficult, but by paying attention to your tendencies and following some rules, you can give yourself a chance.”
Problem: We have too many choices to sift through.
Blame the Internet. With limitless information on so many subjects just a Google search away, we’ve become a nation of junior detectives, know-it-all shoppers, and overeducated patients. So why is choosing still so hard? A century ago, the average consumer had little in the way of real selection. From cornflakes to college, the options available to most people were limited. Today we have so many choices that we are often overwhelmed by too much of a good thing.
Worse, we tend to gravitate toward a big selection. Consider an experiment conducted a few years ago at a gourmet grocery store in Northern California. Sheena S. Iyengar, an associate professor of leadership and ethics at the Columbia University School of Business, and Mark Lepper, chairman of the department of psychology at Stanford University, gave away free samples of jam to anyone who visited their tasting table. At certain times, shoppers were offered six different flavors. At other times, the number of varieties was increased to 24. Anyone who came to the table at any time received a coupon good for $1 off one of the jams.
About 40 percent more shoppers visited the table when there were 24 jams, but those who stopped by when there were just six jars on the table were almost 10 times more likely to actually buy jam. Experts call this “choice under conflict.” We think we want lots of options in life, but when faced with too many, we freeze. “
Choice under conflict helps explain why people feel anxious when considering a dozen or more investment options in their work retirement plans. The phenomenon also accounts for why certain discount retailers, like Costco, are so successful at getting us to buy: They limit the number of washing machines from which shoppers can select. “People think unlimited choice is a good thing,” says Swarthmore College psychology professor Barry Schwartz, whose book The Paradox of Choice: Why More Is Less (HarperCollins, $24) came out earlier this year. “They don’t realize that you can become paralyzed by too many choices and that increased options mean increased confusion.
Solution: Limit your options.
It goes without saying that you should see what’s available when making major purchases or other decisions. But whenever possible, let others do the early winnowing for you. If you’re having a hard time selecting a new air-conditioner, for instance, limit your options to the top two or three choices in Consumer Reports. Likewise, when looking for a college for your son or daughter, better to visit just four or five campuses than eight or nine (what applies to you also applies to your young scholar). “The mind can organize and prioritize only so much information,” says Cornell University psychology professor Thomas Gilovich, who specializes in behavioral economics. “You can know so much that your knowledge becomes useless.”
Problem: We try to justify past behavior.
Here’s a story that may sound familiar. After paying more than $3,000 in car repairs over the previous two years, Helen, a stay-at-home mom in her 40s, was faced with a tough decision: Her transmission had conked out, and she had to decided between spending $1,200 to fix it or buying a new car. What did she do? “I fixed the car,” she says. “I didn’t want to waste the $3,000 I’d already spent.”
If Helen’s reasoning sounds sensible, you’re falling for the “sunk cost” fallacy, or the common tendency to justify past decisions with current ones. Ohio University psychologists Hal R. Arkes and Catherine Blumer, who have studied the sunk-cost fallacy, blame it on our desire not to appear wasteful. But whatever the cause, it’s the reason people have a hard time leaving a bad movie, breaking up with someone, or switching jobs. Ask an unhappy lawyer why she doesn’t change careers, for example, and she’ll probably answer with two numbers: how much she spent on law school and how many years she’s been working. But, like Helen, our lawyer misses the point: She won’t get her money or time back by being miserable for another 10 years. The sunk-cost fallacy is so powerful, and complicates so many decisions, because we’re trained from our earliest days to pay too much attention to what we’ve already spent in time, money, or emotion.
Solution: Rewrite history.
Crying over spilled milk is useful if it makes you more careful with milk in the future. But when making serious life choices, ask yourself the following question: If I had that decision to make over again, would I still decide to spend the $1,200? If Helen had asked, “Would I have put that original $3,000 into this car the first time it needed it needed work if I had known then what I know now?” her answer would almost certainly have been no. And that would have told her something about the wisdom of spending $1,200 more on repairs. “How we frame decisions can have a profound effect on how we decide them,” says psychologist J. Edward Russo, coauthor of Winning Decisions: Getting It Right the First Time (Doubleday, $27.50). “Sometimes you have to look at a choice from a different angle or point in time.” In other words, by recognized bad money for what it is, you can avoid throwing good money after it.
Problem: We fear regret too much.
On Saturday night, Ms. A goes to the movies. When she gets to the theater, she’s told that she has won $100 for being the theater’s 100,000th customer. That same night, Ms. B goes to the movies at a different theater. She’s told that the woman in front of her won $1,000 for being the millionth customer. Ms. B wins $150.
Who would you rather be, Ms. A or Ms. B? When presented with similar puzzlers, most people will choose Ms. B. But some people will actually choose Ms. A, says University of Chicago behavioral economist Richard Thaler. They will choose the $100 because they imagine they would feel so bad about just missing out on the $1,000 that they would give up $50 to avoid it. At play here is what Thaler and his peers call “regret aversion.”
But the principle – that people make or put off certain choices because they fear feeling regret – affects all types of decisions, even romantic ones. Among all the reasons given for why women and men today marry later, regret aversion is rarely mentioned. But the hope that an ideal mate without flaws is just one blind date away can certainly play a part in the decision to avoid forming a lasting relationship. “Baby boomers in particular struggle with regret,” says Hamilton Beazley, author of No Regrets: A Ten-Step Program for Living in the Present and Leaving the Past Behind (Wiley, $15). “Their expectations in life are so idealized – because they’ve lived in such a prosperous time – that they are virtually impossible to achieve.”
Solution: Try it, you’ll like it (or at least you won’t regret it).
You can afford to take more risks in your decision making, and there’s hard science to prove it. “Research shows that in the long run, people regret inactions,” says Gilovich, who studies regret. Ask yourself what you most regret about the past year. You’ll probably list things you did. But apply the same question to the past 10 years and you may find yourself listing things you didn’t do: the job you turned down because it wasn’t perfect, the class you didn’t take because you didn’t have the time, the trip you passed up because you didn’t have the money. More likely than not, few if any of your reasons for not having acted seem nearly as convincing 10 years later. Perhaps more than any single piece of advice, says Gilovich, this realization can free up your decision-making process. Unless a particular decision will kill, imprison, or bankrupt you, there’s every reason to think that down the road you won’t regret what you did, even if it didn’t work out.
Problem: We overthink too many decisions.
Retailers will tell you that shoppers often buy the first item they look at seriously after coming into a store. Why, then, do people spend so much time inspecting other items? Because while we know what we want, we need to convince ourselves. Unfortunately, comparison shopping often ends up doing precisely the opposite. “When it comes to choosing people are either ‘maximizers’ or ‘satisficers,’” Schwartz says. “Maximizers spend a great deal of effort on the search. Satisficers try for results that are good enough. They’re the ones who are usually happiest with their decisions.” In other words, go with your gut: Research shows that a gut response is generally more likely to leave you satisfied with a choice than careful analysis is.
In a psychological study done in 1993 at the University of Virginia, for example, college students were asked to choose one from a selection of posters, which they would eventually hang in their dorm rooms. Some of the students were told they could pick the one they instinctively liked, while others were asked to first analyze all the posters by various criteria before choosing. Guess what? The ones who were allowed to go with their initial instinct ended up liking the poster they got a lot more than those who were given strict criteria.
Solution: Trust your instincts.
Give yourself permission to relax. Caution and research are useful, but there’s a difference between smart decisions and good decisions. Smart decisions are logical and reasoned and make sense. Good decisions make you feel good, both because the issue is settled and because you’re free from waves of second guessing. In some situations, that’s what matters most – especially those in which there’s no right or wrong, when it’s simply a matter of what works for you. The clothes you should wear, the books you should read, the couch you should buy, are not as likely to give you satisfaction as what you want to wear, read, or sit on. (Within reason. You still need to be properly informed about your decisions.) “People want to be perfect deciders,” says Gilovich. “But you can only hope to be a happy decider.”
Trusting your instincts is often appropriate, even with decisions of serious consequence. Choosing a doctor, for example, is as much about how you feel in her office as about the diplomas that hang on her walls (of course, she also needs to be qualified to treat you). When you find yourself doubting your gut instincts, use this trick: Rather than search for better alternatives, start taking a critical look at your first instinct. If you can’t come up with a good reason not to trust it, you probably should.
Problem: We can’t identify some preferences.
Sometimes even the most decisive people can’t figure out their true preference. Consider Lindsay, a doctor in her 30s. Her two best friends were going on vacation – Beth to Cancun, Anna to Costa Rica – and each had invited Lindsay to come along. She gave serious thought to both trips, but after several days was still unable to decide. “I even tried listing each trip’s pros and cons, but it didn’t work,” she says. “I’m normally a decisive person, but I wasn’t getting anywhere.”
It’s unavoidable that you will periodically find yourself stuck between two apparently equal choices. When that happens, there’s a surprisingly simple trick to learning what you really want.
Solution: Whrn in doubt, flip for the answer.
Yes, flipping a coin can help you read your true feelings. Here’s how it works: When you’re facing a decision with two distinct possibilities, assign option A to heads and option B to tails, then flip. If the coin lands and you’re happy, fine. If it lands and you feel a pang of regret, or if you find yourself hoping it lands one way or the other while it’s in the air, you know you weren’t really facing two equal options. In fact, many people find the coin flip useful because even before it lands, they realize they were hoping for one result or the other.
Problem: We have too many choices to sift through.
Blame the Internet. With limitless information on so many subjects just a Google search away, we’ve become a nation of junior detectives, know-it-all shoppers, and overeducated patients. So why is choosing still so hard? A century ago, the average consumer had little in the way of real selection. From cornflakes to college, the options available to most people were limited. Today we have so many choices that we are often overwhelmed by too much of a good thing.
Worse, we tend to gravitate toward a big selection. Consider an experiment conducted a few years ago at a gourmet grocery store in Northern California. Sheena S. Iyengar, an associate professor of leadership and ethics at the Columbia University School of Business, and Mark Lepper, chairman of the department of psychology at Stanford University, gave away free samples of jam to anyone who visited their tasting table. At certain times, shoppers were offered six different flavors. At other times, the number of varieties was increased to 24. Anyone who came to the table at any time received a coupon good for $1 off one of the jams.
About 40 percent more shoppers visited the table when there were 24 jams, but those who stopped by when there were just six jars on the table were almost 10 times more likely to actually buy jam. Experts call this “choice under conflict.” We think we want lots of options in life, but when faced with too many, we freeze. “
Choice under conflict helps explain why people feel anxious when considering a dozen or more investment options in their work retirement plans. The phenomenon also accounts for why certain discount retailers, like Costco, are so successful at getting us to buy: They limit the number of washing machines from which shoppers can select. “People think unlimited choice is a good thing,” says Swarthmore College psychology professor Barry Schwartz, whose book The Paradox of Choice: Why More Is Less (HarperCollins, $24) came out earlier this year. “They don’t realize that you can become paralyzed by too many choices and that increased options mean increased confusion.
Solution: Limit your options.
It goes without saying that you should see what’s available when making major purchases or other decisions. But whenever possible, let others do the early winnowing for you. If you’re having a hard time selecting a new air-conditioner, for instance, limit your options to the top two or three choices in Consumer Reports. Likewise, when looking for a college for your son or daughter, better to visit just four or five campuses than eight or nine (what applies to you also applies to your young scholar). “The mind can organize and prioritize only so much information,” says Cornell University psychology professor Thomas Gilovich, who specializes in behavioral economics. “You can know so much that your knowledge becomes useless.”
Problem: We try to justify past behavior.
Here’s a story that may sound familiar. After paying more than $3,000 in car repairs over the previous two years, Helen, a stay-at-home mom in her 40s, was faced with a tough decision: Her transmission had conked out, and she had to decided between spending $1,200 to fix it or buying a new car. What did she do? “I fixed the car,” she says. “I didn’t want to waste the $3,000 I’d already spent.”
If Helen’s reasoning sounds sensible, you’re falling for the “sunk cost” fallacy, or the common tendency to justify past decisions with current ones. Ohio University psychologists Hal R. Arkes and Catherine Blumer, who have studied the sunk-cost fallacy, blame it on our desire not to appear wasteful. But whatever the cause, it’s the reason people have a hard time leaving a bad movie, breaking up with someone, or switching jobs. Ask an unhappy lawyer why she doesn’t change careers, for example, and she’ll probably answer with two numbers: how much she spent on law school and how many years she’s been working. But, like Helen, our lawyer misses the point: She won’t get her money or time back by being miserable for another 10 years. The sunk-cost fallacy is so powerful, and complicates so many decisions, because we’re trained from our earliest days to pay too much attention to what we’ve already spent in time, money, or emotion.
Solution: Rewrite history.
Crying over spilled milk is useful if it makes you more careful with milk in the future. But when making serious life choices, ask yourself the following question: If I had that decision to make over again, would I still decide to spend the $1,200? If Helen had asked, “Would I have put that original $3,000 into this car the first time it needed it needed work if I had known then what I know now?” her answer would almost certainly have been no. And that would have told her something about the wisdom of spending $1,200 more on repairs. “How we frame decisions can have a profound effect on how we decide them,” says psychologist J. Edward Russo, coauthor of Winning Decisions: Getting It Right the First Time (Doubleday, $27.50). “Sometimes you have to look at a choice from a different angle or point in time.” In other words, by recognized bad money for what it is, you can avoid throwing good money after it.
Problem: We fear regret too much.
On Saturday night, Ms. A goes to the movies. When she gets to the theater, she’s told that she has won $100 for being the theater’s 100,000th customer. That same night, Ms. B goes to the movies at a different theater. She’s told that the woman in front of her won $1,000 for being the millionth customer. Ms. B wins $150.
Who would you rather be, Ms. A or Ms. B? When presented with similar puzzlers, most people will choose Ms. B. But some people will actually choose Ms. A, says University of Chicago behavioral economist Richard Thaler. They will choose the $100 because they imagine they would feel so bad about just missing out on the $1,000 that they would give up $50 to avoid it. At play here is what Thaler and his peers call “regret aversion.”
But the principle – that people make or put off certain choices because they fear feeling regret – affects all types of decisions, even romantic ones. Among all the reasons given for why women and men today marry later, regret aversion is rarely mentioned. But the hope that an ideal mate without flaws is just one blind date away can certainly play a part in the decision to avoid forming a lasting relationship. “Baby boomers in particular struggle with regret,” says Hamilton Beazley, author of No Regrets: A Ten-Step Program for Living in the Present and Leaving the Past Behind (Wiley, $15). “Their expectations in life are so idealized – because they’ve lived in such a prosperous time – that they are virtually impossible to achieve.”
Solution: Try it, you’ll like it (or at least you won’t regret it).
You can afford to take more risks in your decision making, and there’s hard science to prove it. “Research shows that in the long run, people regret inactions,” says Gilovich, who studies regret. Ask yourself what you most regret about the past year. You’ll probably list things you did. But apply the same question to the past 10 years and you may find yourself listing things you didn’t do: the job you turned down because it wasn’t perfect, the class you didn’t take because you didn’t have the time, the trip you passed up because you didn’t have the money. More likely than not, few if any of your reasons for not having acted seem nearly as convincing 10 years later. Perhaps more than any single piece of advice, says Gilovich, this realization can free up your decision-making process. Unless a particular decision will kill, imprison, or bankrupt you, there’s every reason to think that down the road you won’t regret what you did, even if it didn’t work out.
Problem: We overthink too many decisions.
Retailers will tell you that shoppers often buy the first item they look at seriously after coming into a store. Why, then, do people spend so much time inspecting other items? Because while we know what we want, we need to convince ourselves. Unfortunately, comparison shopping often ends up doing precisely the opposite. “When it comes to choosing people are either ‘maximizers’ or ‘satisficers,’” Schwartz says. “Maximizers spend a great deal of effort on the search. Satisficers try for results that are good enough. They’re the ones who are usually happiest with their decisions.” In other words, go with your gut: Research shows that a gut response is generally more likely to leave you satisfied with a choice than careful analysis is.
In a psychological study done in 1993 at the University of Virginia, for example, college students were asked to choose one from a selection of posters, which they would eventually hang in their dorm rooms. Some of the students were told they could pick the one they instinctively liked, while others were asked to first analyze all the posters by various criteria before choosing. Guess what? The ones who were allowed to go with their initial instinct ended up liking the poster they got a lot more than those who were given strict criteria.
Solution: Trust your instincts.
Give yourself permission to relax. Caution and research are useful, but there’s a difference between smart decisions and good decisions. Smart decisions are logical and reasoned and make sense. Good decisions make you feel good, both because the issue is settled and because you’re free from waves of second guessing. In some situations, that’s what matters most – especially those in which there’s no right or wrong, when it’s simply a matter of what works for you. The clothes you should wear, the books you should read, the couch you should buy, are not as likely to give you satisfaction as what you want to wear, read, or sit on. (Within reason. You still need to be properly informed about your decisions.) “People want to be perfect deciders,” says Gilovich. “But you can only hope to be a happy decider.”
Trusting your instincts is often appropriate, even with decisions of serious consequence. Choosing a doctor, for example, is as much about how you feel in her office as about the diplomas that hang on her walls (of course, she also needs to be qualified to treat you). When you find yourself doubting your gut instincts, use this trick: Rather than search for better alternatives, start taking a critical look at your first instinct. If you can’t come up with a good reason not to trust it, you probably should.
Problem: We can’t identify some preferences.
Sometimes even the most decisive people can’t figure out their true preference. Consider Lindsay, a doctor in her 30s. Her two best friends were going on vacation – Beth to Cancun, Anna to Costa Rica – and each had invited Lindsay to come along. She gave serious thought to both trips, but after several days was still unable to decide. “I even tried listing each trip’s pros and cons, but it didn’t work,” she says. “I’m normally a decisive person, but I wasn’t getting anywhere.”
It’s unavoidable that you will periodically find yourself stuck between two apparently equal choices. When that happens, there’s a surprisingly simple trick to learning what you really want.
Solution: Whrn in doubt, flip for the answer.
Yes, flipping a coin can help you read your true feelings. Here’s how it works: When you’re facing a decision with two distinct possibilities, assign option A to heads and option B to tails, then flip. If the coin lands and you’re happy, fine. If it lands and you feel a pang of regret, or if you find yourself hoping it lands one way or the other while it’s in the air, you know you weren’t really facing two equal options. In fact, many people find the coin flip useful because even before it lands, they realize they were hoping for one result or the other.
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Comment by Tracy
Movies and Life
There is so much in this post, it’s great info. I was just thinking something similar the other day. I was in the supermarket looking at all the breakfast choices and was grateful I knew the brand I wanted as there is so much choice. And false advertising e.g. 99% fat free etc. But on some other days when I'm tired and indecisive, I stand and stare at all the products, feeling overwhelmed by all the choices.
For non-supermarket decisions that I'm having trouble with making, I know it's something to do with this reason:
But the principle – that people make or put off certain choices because they fear feeling regret.
I generally try to go back to my instincts or take a minute to work out what is driving me.
Tracy
Comment by Lilla
From The Home Front
Enviro Warrior
Dream Herald
Esoteric Bookshop
Loved the message in this one... perhaps that sign could read : Simplify or Die...
No doubt about it, too much choice causes confusion and I believe that the "waste Makers" use that confusion (and timely research of same) against us... daily in their bid for the bottom line profit margin.
They count on you buying stuff you don't need (a) by placing it on the shelf at your arms height... you know they pay double to have products there than up high or (especially) down low. People don't like to go low, but that's where the better, cheaper brands are... check it out.
My answer is simple. Turn off the TV and stare at the wall...pretty soon (after all the voices and madness pass away and you can sit comfortably with yourself... well the fact is, you can suddenly hear yourself too and that is a good thing when your heart is trying to communicate with your head, about making choices...in't it? Too hard when the head (the advisors) out weigh the decisions of the King (the heart).
Not possible at all on five to ten cups of coffee a day, either *chuckle* I still watch people trying though.
Thanks for a good read...hope you get to watch the movie on my recent post 'Ordinary Life' ...well worth the hour and a half you need to see it all.
truckloads of hugs to you...
Lilla ...
Comment by katyzzz
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katyzzz
Comment by jon
Orble News
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Comment by KylieW
Celebrity Obsession
I love this post. I hate making decisions! Actually, that's not true. Big decisions, I usually have no problem with (do I leave this job? Should I buy a car?). Little decisions, like what to eat however. Those decisions I can struggle with for AGES and drive everyone around me mental.
In the end I use, essentially a version of the coin toss. Wait till it's time to make a decision and just go with the first thing to pop into my head. Usually serves me well.
Kylie
Comment by Miswanderlust
Killer Beats
Ramble On
Hipnotherapy
I know that I was long winded in this post but this whole concept of "too much is too much" drives me nuts.
I tend to buy one shirt in three colors with no stripes, paisley or plaids. I taught my son..."do you want to wear the blue shirt or the red shirt" and not take him to the closet and present him with every shirt to pick from.
I am the same way with food. I tend to get into ruts but it is comforting to me. (And I don't have to think about it) I don't like knick knacks around the house....too much upkeep for my current lifestyle. Simplify! Simplify! Simply! is my battle cry.
In addition, like you buyer's remorse is a BIG motivator for me so I tend to be a cheapskate. Currently I am trying to refrain from buying any new items of clothing for one year in response to how consumerism is at a fevered pitch! (Or maybe I am avoiding decision making)
Always a pleasure!
Mis
Comment by Miswanderlust
Killer Beats
Ramble On
Hipnotherapy
So good to see you! I hope that you are feeling better.
I thought that this post would have special meaning for you Miss envirowarrior you!
that sign could read : Simplify or Die...
HAHA Great idea!
The waste makers have undoubtedly done a fantastic job when you look at the amount of trash consumers dispose of each day. I remember my mom telling me that when she was growing up she had a dress for every day of the week, 7 pairs of underwear and socks, a coat, and two pairs of shoes and that is it. I look in my closet and I am ashamed. Talk about
buying stuff you don't need
Thanks for the stocking reminder when shopping!
you can suddenly hear yourself too and that is a good thing when your heart is trying to communicate with your head, about making choices...in't it? Too hard when the head (the advisors) out weigh the decisions of the King (the heart).
Amen sister!
I will pop over to your site!
truckloads of hugs to you too!
Mis
Lilla ...
[ Delete ]
Comment by Miswanderlust
Killer Beats
Ramble On
Hipnotherapy
Think I'll just lay down and die, it's easier.
Oh don't do that! Make a different decision! [wink]
Mis
Comment by Miswanderlust
Killer Beats
Ramble On
Hipnotherapy
Damn glad to meet you! Your kind words are appreciated. Stop in anytime!
Mis
Comment by Miswanderlust
Killer Beats
Ramble On
Hipnotherapy
Thanks so much for your kind words. Many of my decisions are coin tosses also. Oh well.... I live my life in Yoda fashion. "Do or do not...there is no try" so I have made many stupid mistakes. Oh what the hell I ain't dead yet so I am sure I will make plenty more!
Mis
Comment by Chic Critique
I always want to take several options, and also fear I'll regret it if I don't do something.
Like when you're at dinner with friends....and you can't choose what to have....and then you make the choice and someone else has ordered your other option....and it's nicer. You spend the whole meal looking at it and then looking at your meal and thinking...."should've got that".
Comment by Miswanderlust
Killer Beats
Ramble On
Hipnotherapy
You are so right about that. Why is it that someone else's dinner looks better than yours and then when you talk to them about it they think yours looks better?
Mis
Comment by David
I've decided to stay on Orble and send the 20c coin to Google.
Flippancy aside?
This is the part that most struck me:
One of the rules I use when it comes to decision making?
I ask myself the following question:
Do I need it or just want it? (There's a huge distinction).
David ...
Comment by Miswanderlust
Killer Beats
Ramble On
Hipnotherapy
Do I need it or just want it? (There's a huge distinction).
Amen brother! So good to see you. Hope you are well!
Mis