How Do You Decide?

I'm listening to "The Art of Critical Decision Making", which talks about the individual, group, and organizational aspects of decisions.  

 © Marco Bellucci used with permission of Creative Commons licensing

There are so many decisions we make throughout the day and throughout our life, and mostly we don't even think about the process we use.  Sometimes we don't have a process.  For those times when decisions are important, part of this course talks about cognitive biases that one should be aware of.  They are called biases because they have the potential to be irrational, and possibly subconscious, factors that affect your choice.

Let's look at them, one-by-one.

OVERCONFIDENCE

People tend to be overly confident in their judgments.

SUNK-COST EFFECT 

When people have made substantial investments of time, money, or energy, they tend to stay committed to that course of action no matter what.  This is the "throw good money after bad" scenario.

RECENCY EFFECT
 
We place too much emphasis on recent events, because that's what we remember best, and because that information is readily available to us.

CONFIRMATION BIAS

People gravitate toward information that confirms, or is equal to, their existing beliefs.  They ignore or downplay conflicting information, regardless of its validity.

ANCHORING

An initial reference point can distort our decision, if that anchor point is too extreme.  Sometimes people ask for something way out of line, then settle for a middle ground which is what they wanted all along.  You might like it if you're trying to negotiate to your advantage, but be aware when this tactic is being used on you.

ILLUSORY CORRELATION

Just because two things happen at the same time doesn't necessarily mean they have a cause-and-effect relationship.  This is how superstitions are created.

HINDSIGHT BIAS

It's easy to look back at past events and say they were predictable.  But at the time they happened, they probably weren't obvious at all.  People have a tendency to "blame the victim" as a way of distancing themselves from the possibility of that event happening to them.

EGOCENTRISM

This is when we give ourselves more credit for an outcome than what an objective, outside party would.  We all like to think we have a bit of superhero in us.

SO NOW WHAT?

In addition to staying on the lookout for the cognitive biases described above, and counteracting them if you find any, there's something else you can do - consider how issues are framed.

 

How we frame a problem can shape the solution we arrive at.  If we frame a situation in terms of what we stand to gain, we act differently than if we frame it in terms of what we have to lose.

The best thing is to balance the two competing frames.  Framing a situation as a threat encourages us to apply more resources to the task.  But also framing it as an opportunity helps us to be flexible and adaptive in order to use those resources effectively.