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3 Keys to Better Decisions

KEY POINTS

  • Opinions rarely change with more or better rational arguments.
  • It takes considerable effort to see facts while withholding judgment and resisting explanations.
  • Recognizing the present bias, erroneous sense-making, and the tendency to cherry-pick data can help people make better decisions.

Choice and decision-making are fundamental aspects of life, and the choices people make determine, in part, the quality of life. Bias is a factor in decision-making and can lead to less-than-optimal decisions. We must learn to remove any potential unconscious bias from our choices.

The following are three examples of common decision biases that should be considered in approaching most daily choices.

1. Present bias

Most of our everyday decisions have a time dimension, meaning that they involve tradeoffs between costs and benefits occurring at different times. Such choices pervade our lives, from daily decisions to ones that can have lifelong consequences, such as saving for retirement, education, and marriage.

For example, the main problem with most bad habits (e.g., overeating or procrastination) is that the costs occur in the future, whereas the pleasures from them occur in the present.

A desire to indulge in immediate pleasures may lead us to overeat or to postpone unpleasant tasks, such as preparing for an exam. The health consequences, such as a shorter life, will come over a long-time horizon that we are unable to realize now.

In general, we want things now rather than later. There is psychological discomfort associated with self-denial. We also tend to think about our future selves as if they are someone else, wholly different from who we are today. Seeing that distant future self as an emotional stranger may result in decisions that prioritize today over tomorrow.

Reorienting an individual away from immediate gratification and toward making more future-oriented decisions is a logical step. Myopic behavior is not set in stone. It can change with experience and education.

2. Erroneous sense-making

We have a universal desire to find meaning and patterns everywhere. Making sense is a deep human motivation, but making sense is not the same as being correct. As the saying goes, “even a broken clock is right twice a day.” The world is complex, and appearances fool us.

A lot of what happens to us (e.g., success in our career, our life choices) is as much the result of random factors as the result of preparedness and hard work.

For example, a graduating student can be lucky and enter the job market when it is strong, or unlucky and enter the job market in the middle of a recession. Other random factors include where you are born, where you go to school, your health, and so on.

It is important that we recognize this built-in mental bias. Because events do not come labeled random. Instead, this must be inferred. Our intuition does not grasp the nature of randomness. Our intuitive mind is the sense-making organ, which sees the world as simple, predictable, and coherent. This coherence makes us feel good.

3. Cherry-picking data

Cherry-picking data refers to selecting information that supports a particular view while ignoring relevant contradictory evidence. Belief beats out facts. People tend to embrace information that supports their beliefs and rejects information that contradicts them. People can also selectively decide what information to pay attention to from the vast amount of information available to them.

For example, a person who is already skeptical about vaccine safety would most likely search for information confirming this belief. This bias makes it difficult for new information (the relative risks of vaccination versus the disease) to penetrate existing beliefs. Similarly, a person with low self-esteem is highly sensitive to being ignored by other people, and they constantly monitor for signs that people might not like them.

Seeking to confirm our beliefs comes naturally, while it feels strong and counterintuitive to look for evidence that contradicts our beliefs. This explains why opinions survive and spread. Disconfirming instances are far more powerful in establishing truth. A key to making a good decision is to treat your beliefs as hypotheses to be tested rather than defending them.

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