#51 - Decision Making
Every day you face decisions: what to eat, wear, say, do, where to go, sit, stand, run, bike, drive, who to talk to, acknowledge, smile at, wave to, etc. You’ll face bigger decisions like what class to sign up for, where to go to college, what to major in, what car to buy, what house to buy, who to date or marry, etc. Decision making is important and poor decisions have damaged the lives of many people.
The classic decision making model involves the following steps.
Identify the purpose of your decision
Gather information
Select criterion to judge the options on
Gather possible choices
Evaluate choices based on the criteria
Select the best alternative
Put into action
Evaluate the outcome (learn from the decision)
Most decisions are some combination of those steps but this specific model has a number of shortcomings. First, it can be very time consuming—maybe a good way to decide on a house but probably not on where to eat out. Second, gathering possible choices is a daunting task. “Possible choices” could include hundreds of houses, millions of cars, or billions of potential spouses. Obviously a single day would be exhausting if we followed this process for every decision. Numerous well-known CEO’s and presidents wear the same outfit every day (or every Monday, Wednesday, etc.). The research has shown that the more decisions you make in a day, the less effective you will be on other decisions. For people who need to make many important decisions every day, simplifying clothing and food is a good way to avoid decision fatigue.
In reality, most decisions are made with a “satisficing” model. In this situation, people consider a few options, and make the first best choice. For example, test driving 5 cars, walking through 10 houses, or dating 4 people. The specific number depends on the importance of the decision to that person and their personal risk tolerance. This more realistic decision making approach is clearly more user friendly—it’s relatively quick and still more or less rational. Knowing that most people make most decisions based on this second model, there are a few important items we should discuss that can get in the way of effective decision making in either case.
Information
Availability of information is a continuum and good decision making lies in the middle. On the one extreme you have too little information—people making decisions based on absolutely nothing. On the other extreme there’s people belaboring the simplest decisions—making them almost impossible by trying to consider too much information. You probably know people on both of these extremes. I knew a guy once who would make decisions that rarely turned out good. When asked “Why?” he would simply reply, “I don’t know, I just did it.” Obviously some additional information would be helpful for him. On the other extreme, I have a story from my own experience. I was recently shopping for a new pair of running shoes. Since I was coming off a foot injury, I really wanted to get the “right” pair of shoes this time. I could have spent the whole day because there were hundreds of options (just in the one store!). As it was I spent close to an hour jogging laps of the store trying to find virtually nonexistent differences between my top picks. I ended up settling on a pair finally but chances are that I could’ve made an equally good decision much faster by randomly choosing one from my top 5 choices instead of torturing myself trying to find differences between shoes that were virtually identical.
Emotions
I also want to briefly mention emotions. Many people make decisions based on emotions that simply should not be made for those reasons. There are many reasons for this. For one, emotions change rapidly and depend heavily on unrelated circumstances. If you’re having a bad day different emotions would result in different decisions. Things as simple as color, temperature, and related words can wreak havoc on emotional decisions. Emotional decisions about which flavor of blizzard to order no big deal. Emotional decisions about politics, spouses, jobs, schools, friends, etc. can have significant consequences.
Over the next couple of days, we have more on decision making. First, common biases to avoid. And second, a section specifically on decision making challenges faced by young people.