“Decisions as I go to, to anywhere I flow…” we hear in the popular song. Indeed, decisions are fixedly embedded in our reality and we have to face, almost constantly, not only the decisions themselves, but also their outcomes. Do you know how many decisions you make daily? During an average week? A recent survey examined over 2,000 Americans, and the average number of choices that the typical American reports makes is about 70 in a typical day, while they choose out of thousands of divergent possibilities and alternatives. Another recent study examined daily tasks of a group of CEOs, estimating that an average chief executive undertakes 139 decision-making tasks per week, every task involving many more intermediate choices. 50% of their decisions were made in nine minutes or less, while only about 12 % of those were made in an hour or more. Think about your own choices. Have you ever thought about how long it takes before you make a decision? How do you prioritize?
“Which cereals to pick in the morning? Should I go to the lecture or should I stay at home and read? What to do over the weekend? Where to invest or maybe it is better not to invest at all? Which career path to choose?” The flow of alternatives passing our mind is quite overwhelming. You may first think that not all of these decisions are equal, that some are more and some are less important, that some are life changing and some are just trivial. That is true. However, we must note two things: 1) there must be a universal principle of making the (right) choice, independently of its nature. At the end of a day, a decision is just a decision; 2) even these seemingly insignificant decisions, when they are made persistently, can turn our life away (choosing a donut instead of an oatmeal for breakfast every day or picking more often the mathematics book instead of the geography book in our childhood can make a difference, right?). The fact that a decision is momentous and meaningful does not define it with respect to how easy or difficult it is. Let us investigate what indeed does.
Objectivity vs. subjectivity
What can make a choice hard is the way alternatives relate to each other. For an easy choice, one alternative is better than the other. With a hard choice, one alternative is better in some ways, while the other is better in other aspects, and neither is better overall. Even in the case of having full information about the alternatives, it may be difficult to make a decision. Should I become an investment banker or an entrepreneur? Both options are in some way good and in some way bad: being a banker gives you more certainty and career prospects, but involves long working hours. On the other hand, being an entrepreneur gives you more freedom to work on a project you are passionate about. However, it can be quite risky. So perhaps both options are equally good. In such case, the chance could decide upon which one to pick, but such an option would not make us happy either. Therefore: neither of the options is better than the other, nor are they equally good. Hard choices are hard not because of us, our ignorance or the limited information we have – they’re hard because there is no best option. According to Ruth Chang, an American philosopher, the missing puzzle of it is that these choices involve values instead of numerical measurements, which are easy to compare. She states: “We unwittingly assume that values like justice, beauty, kindness, are akin to scientific quantities, like length, mass and weight. […] We tend to assume that scientific thinking holds the key to everything of importance in our world, but the world of value is different from the world of science. The stuff of the one world can be quantified by real numbers. The stuff of the other world can’t. We shouldn’t assume that the world of what is, of lengths and weights, has the same structure as the world of ought, of what we should do.” How then compare values, which may be similar but not equal, comparable but of a different kind? In such a case, we ourselves have to create reasons behind the choice. Reasons come from the inner belief or awareness about who we are and what we stand for. Therefore, the more we know ourselves, the more confident we can be about the choices we make.
Relativity of comparison
The problem of making any decision also lies in finding the proper reference point against which we can make a comparison. This is an example given by Daniel Gilbert, an American social psychologist and researcher on affective forecasting: “You want to buy a car stereo. The dealer near your house sells this particular stereo for 200 dollars, but if you drive across town, you can get it for 100 bucks. So would you drive to get 50 percent off, saving 100 dollars? Most people say they would. They can’t imagine buying it for twice the price when, with one trip across town, they can get it for half off. Now, let’s imagine instead you wanted to buy a car that had a stereo, and the dealer near your house had it for 31,000. But if you drove across town, you could get it for 30,900. Would you drive to get it? At this point, 0.003 savings — the 100 dollars. Most people say, no, I’m going to schlep across town to save 100 bucks on the purchase of a car?” This kind of reasoning is quite common. As we can see, only the reference point differs, while money and its value remain constant. Can we say that giving up these 100 dollars is an irrational decision? In some sense yes, since more is always better (as assumed by economic thinking). But as we see, even rationality is quite relative, because: 1) a decision cannot be taken out of the context of the situation and 2) people have bounded rationality and not always have access to perfect information. How not to be a victim of relativity bias? Make sure to pick the relevant reference point – relevant to your values, relevant to the time constrains, relevant to the current situation.
Are we really that rational?
There are several interesting biases, which can interfere with the rationality of our decision. These are some of them:
1) Confirmation bias: we tend to listen and refer to things we are already familiar with and which confirm our presumed thoughts
2) Choice supportive bias: in case we are courageous enough to make a decision, we consider it more flawless that it really is
3) Bandwagon effect: it is a powerful form of group thinking – the more people support a given decision, the more reasonable it may seem to us
4) Anchoring bias: people rely on the piece of information they have heard first and refer other options usually to this first one
5) Availability heuristic: we refer to things we have heard of and then overestimate their importance.
6) Clustering illusion: we tend to see patterns in completely random events and generalize them
7) Blind spot bias: we do not notice cognitive biases in our own behavior – it is usually easier to see it in others.
We cannot really do much about biases themselves, because, according to the blind spot bias, they are very difficult to detect. However, when knowing about the existence of such biases, we can be more reflective about our own thinking patterns. I am not sure if knowing about these theoretical aspects of decision-making will help you make more rational or efficient choices, but realizing the complexity of the whole process can surely make you more proud when you make any decision at all.
“Decisions as I go
To anywhere I flow
Sometimes I believe
At time when I should know…”
Some of the ideas presented in this article were based on the TED speeches by Dan Gilbert, Ruth Chang and Dan Ariely. Do you want to find out more about decision making? Visit www.ted.com/topics/decision-making