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Optimizing decisions

Author: Dr Simon Moss

Complex decisions

In some settings, the options or alternatives differ on numerous characteristics, the implications of which are sometimes ambiguous or unpredictable. For example, consider a person who needs to decide which house to purchase. Houses vary on many characteristics, such as size, location, privacy, age, and so forth. The implications of these characteristics are often ambiguous: age can be both a benefit and a drawback, for example. The implications of some characteristics are unpredictable: an expensive location might escalate or diminish in price, for instance.

Step 1. In these instances, individuals should skim all the information they can accumulate about these alternatives--from brochures, friends, experts, and so forth. They should gather objective information, not subjective evaluations, from other individuals, whenever possible. They should attempt to collect enough information to ensure they can form a vivid image of each alternative.

Step 2. Individuals should then form a mental image of each alternative, dedicating more time to the options that seem unfamiliar rather than familiar.

Suppose, for example, they need to decide which job to pursue, such as accounting, law, or politics. They should form an image of themselves completing each role. However, if they are not especially familiar with accounting, they should devote more time to this profession than to the other professions.

Usually, people are biased towards more familiar alternatives. Vivid images of each option can be sufficient to override this bias (see Eidelman, Crandall, & Pattershall, 2009). Furthermore, vivid images tend to enhance intuition, ultimately improving decisions (Lee, Amir, & Ariely, 2009).

Step 3. Before they reach a decision, they should refrain from expressing their opinions to anyone else. They should not, for example, specify the benefits or drawbacks of each alternative. They should not present reasons why they might or might not prefer a specific option.

When individuals express reasons, their attention is directed to factors and characteristics that are conspicuous or easy to describe. They tend to neglect key and subtle information (see Halberstadt &Green, 2008)

Step 4. Before they reach a decision, they should attempt to distract themselves for an hour, or even a day, with an enjoyable and engrossing activity. They should, for example, engage in a task that is challenging, but not too difficult--an activity they perform quite well. Physical exercise could also be suitable.

Step 5. Once they feel reasonably relaxed, they should merely invoke their intuition. They could, very briefly, imagine each option in turn--such as envisaging themselves living in each house. Usually, one of these alternatives seems most appropriate. That is, one of these options seems to resonate. This option should be chosen.

This approach is called unconscious thinking (see Unconscious thinking theory).When individuals apply this approach, they can more readily incorporate, weight, and integrate unlimited information to optimize decisions (see Dijksterhuis, 2004). This approach also amplifies the benefits and merits of the preferred option, affording a sense of clarity.

Doubts after complex decisions

Sometimes, after individuals reach a decision, they experience some doubts. To resolve these doubts, they need to engage in several exercises.

Step 1. First, they should first consider whether the options they rejected, such as the houses they decided not to purchase, were better on tangible and financial characteristics. For example, perhaps ajob they rejected would have attracted a higher salary. Perhaps a house they rejected might have seemed more impressive but felt unsuitable. Next, individuals should then remind themselves that tangible and financial characteristics are often overrated (see Hsee & Zhang,2004).

Step 2. Sometimes, individuals feel unsettled, because their final decision departed from their original instincts. In these instances, individuals should recognize that first instincts, despite common wisdom, are often incorrect (Kruger, Wirtz, & Miller, 2005).

That is, many individuals believe they should always persist with their first instinct or choice. This belief is not correct (Kruger, Wirtz, & Miller, 2005), but merely arises because individuals are more likely to remember occasions in which they switched their choice and then discovered this decision was unsuitable. These events, because they can be readily recalled, are incorrectly assumed to be common.

Simple decisions

Sometimes, the options or alternatives differ on fewer than five characteristics--and the implications of these characteristics are obvious (see Unconscious thinking theory).In these instances, individuals should instead specify the benefits and drawbacks of each option, perhaps attaching more weight to the key characteristics, before selecting the alternative that prevails from this analysis (Dijksterhuis, Bos, Nordgren, & Van Baaren, 2007).

Ambiguous decisions

On other occasions, individuals are not certain whether the decision is complex or simple. That is, they cannot decide whether they should apply their intuition or reach the decision logically and systematically.

In these instances, individuals could first consider the issue systematically, reflecting upon the benefits and drawbacks of each option. Then, however, they should distract themselves for a while and utilize their intuition. The initial deliberation might overcome some errors and thus ensure their intuition is more accurate.

Nevertheless, sometimes, this approach is not feasible. Individuals need to reach decisions rapidly and, therefore, are not granted an opportunity to consider the alternatives carefully. They might, for example, need to decide whether to purchase a vehicle now, 10 minutes before the yard closes. In these instances, they will need to trust their intuition.

Step 1. To ensure they trust their intuition, individuals should first reflect upon some event or image that evokes happiness or laughter. After they ponder over this image for several minutes, their intuition should become more compelling.

When individuals feel sad, they experience an urge to consider issues carefully. Hence, their decisions seem more suitable if they do indeed deliberately systematically. When individuals feel happy, they experience an urge to reach decisions more expediently. Their decisions, therefore, seem more suitable if they do not deliberate but apply their intuition (de Vries, Holland, & Witteman, 2009).

Estimating quantities

When people need to reach complex decisions--in which the options differ on many subjective characteristics--their intuition, after a period of distraction, is remarkably accurate. However, when people need to estimate some quantity, intuition is often misleading (Dijksterhuis & Nordgren 2006). Employees, for example, might need to estimate how many hours they should dedicate to a specific project. Alternatively, if they want to sell a product, they might need to estimate the number of customers they can persuade.

In many instances, individuals overestimate their abilities, contributions, or fortunes (Taylor & Brown, 1988). They might, therefore, overrate their capacity to complete a task within a week or to attract customers.

Step 1. Before individuals estimate some quantity, such as the number of customers they can persuade in a week, they should consider one of your key values in life: perhaps honesty, equality, art, food, science, spirituality, or the environment. Then should then, for ten minutes or so, contemplate why this value is important. They should also reflect upon how they would feel if they fulfilled this value or aspiration in the future.

This exercise tends to curb the tendency of individuals to overestimate their abilities, contributions, or fortune (see Sherman, Nelson, Bunyan, Cohen, Nussbaum, & Garcia, 2009). Their estimates become more accurate rather than misguided.

Step 2. Individuals should then record an initial estimate of this quantity, such as the number of customers they predict they could persuade. Next, they should identify some possible misconceptions that could have biased their estimate. Perhaps the weather might be inclement, and customers might feel reluctant to travel. After this deliberation, they should record another estimate of this quantity. Finally, they should repeat this procedure several times, eventually computing the average of these estimates.

As Herzog and Hertwig (2009) showed, the average of these estimates tends to be more accurate than either estimate alone. This exercise, therefore, improves the accuracy of predictions about the future.

Techniques to improve intuition

Hogarth (2001) presents a series of techniques that individuals can apply to improve their intuition. These techniques, however, have not been subjected to rigorous analysis. Nevertheless, Hogarth recommends that individuals:


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Last Update: 5/15/2016