MAKING BAD DECISIONS
Ever wonder why you make such bad decisions. We make around 35,000 decisions every day, and they can’t all be good. There are many perspectives and exercises that we can explore as to why we make certain decisions, and, more importantly, why we think they are right!
NEUROLOGY AND ECONOMICS?
Our decision-making process has some innate problems. One of the major goals of neuroscientists is to better understand how information is represented in the brain, and how that information is interpreted and used for decision making. The brain is a powerful organ and requires the most amount of energy within the body. Because the brain performs so many mechanisms simultaneously. The efficient coding hypothesis is the process of the brain making predictions that allow neurons to better interpret and transmit information. Economists have spent many years studying the mechanisms behind irrational choices. With the emergence of books like Freakonomics, economic theory has been applied to a wide array of subjects.
Exercise #1: Picking a candy bar
Try this experiment with one of your friends.
- Go to the store, and get a variety of different candy bars. Make sure to get your friend’s favorite
- Place your friend’s favorite candy bar, and three other candy bars.
- Ask your friend to choose one of them. And record their choice.
- Now place all of the candy bars you have on the table.
- Ask your friend to choose the one they want. And record their choice.
- Now place your friend’s first choice and second choice on the table. See if they are the same or different.
This is an actual experiment that was done to see how people make decisions. When presented with a few options, participants would most often pick their favorite candy bar. However, when presented with over 20, they would often pick a candy bar that was not their favorite. When presented with their two choices, they would wonder why their decision variety between the two scenarios. This variability in decision making is what neuroscientists and economists seek to explore more of.
IRRATIONAL PSYCHOLOGY AND PHILOSOPHY
Exercise #2: Sellers and Choosers
Here is a game you can play with your friend.
- There are two mugs, one for you, and one for your friend.
- The mug is really nice, but you also have the option to sell it. Write down the price at which you are willing to sell your beautiful mug. You are the seller.
- Your friend can have the option of having a mug or the money for the mug. They write down a price they think the mug is worth. They are the chooser. If their price is higher than your price, then they get your mug.
This exercise is probably pretty confusing, but it shows something pretty cool
You may be wondering going with this and what it has to do with irrational decision-making. Here’s the thing, if we played this a thousands of times and put people in different roles – sometimes the role of Seller and sometimes in the role of a Chooser, we would find people who are in the role fo the seller who place the prices significantly higher than the chooser. This means that if the mug is already yours, thank you think it is worth a lot more than a similar mug that isn’t yours. This showcases the irrational logic that plagues our every decision.
Technology is currently taking a greater and greater role in our lives. Due to its presence, actions that were previously done analog or by hand, have now been replaced with technical substitutes. This has impacted much of how we make decisions. One of the key components of technology is its ability to collect large amounts of data, which outmatches the brain. But, just like we have difficulties making decisions based on the information gathered by our brain, this problem increases substantially with the data collection done by technology. While on the surface it appears more data available leads to better decisions, research has shown that this is not the case.
This exercise is simple. You probable are dependent on navigation tools to get you to point A and B. Pick a destination, and without look at provided directions list out the route someone would need to take. The destination very short! Now give this to your friend, and wait for them at the destination. See if the decisions that you made helped them get to the destination!
IT’S OK, WE AREN’T PERFECT
Making bad decisions is a part of our life experiences. I find it fascinating that within all our efforts to portray ourselves as rational beings, we are forever consumed by irrational decisions. Hopefully these exercises allow you to explore your decision making mechanisms, and gain new insight on how you think…and all the bad decisions you make!!