Kahneman (2012) distinguishes between two major modes of thinking. We might think of the human decision-making process as having two major operations. We perform most activities without conscious thought. Unconscious cognitive processes; like identifying faces, recalling Rome as an Italian city, or the unthinking use of a home language all require computational power. Indeed, it is still not quite possible for a computer to recognise faces or interpret languages with the speed and ease of the human mind. If we are to be defined by what we most often do, we are more accurately described as instantaneous thinkers than rational, deliberate ones. When such thinking fails us, as when we are required to calculate mathematical equations, or to reason out the logic of a puzzle, we turn to “slow” thinking, the kind we classify as rational. 

Our fast-thinking, one might call it our “gut-feeling”, is fallacious on many counts. The primordial mind – it is argued – places more value on survival than truth. The default human cognitive process, the one aimed at keeping us alive, is not rational, it is pragmatic. This “fast thinking” side of our minds looks only for readily available information, failing to search for additional information. Other cognitive failures are readily identifiable. For example, we tend to weigh vivid experiences more heavily than mundane ones (regardless of objective importance We also tend to look for coherent narratives because of our propensity for telling and recalling stories. We also tend to overlook evidence which runs contrary to our current beliefs, preferring our current beliefs to new ones.  For these reasons and more, human beings are not very good at understanding probability or weighing evidence intuitively. We consistently over-estimate the chances of unlikely but interesting or horrific events and under-estimate the chances of failing in a new venture. We dismiss statistical randomness. Casinos display roulette counters that show the sequence of previous numbers, as though this could affect the future ones.  

It seems that the role of beliefs in decision-making is pivotal. In many ways, rationality is subjective. Rationality, acting in one’s own interest, is greatly affected by one’s beliefs about what is best for oneself and for others. These concerns are linked closely with subjects of religion, culture and value. Sears and Funk (1990) illustrate that surveys on public opinions, social experiments and ethnographies show that individual preferences are significantly determined by altruistic desire, ideals of justice and fair play and desires for expression. Inglehart (1990) also asserts that similar studies show that preferences changes across time and vary between individuals, contexts and populations. These preferences change so significantly that what is deemed rational for some seems inconceivable to others. Relying on a model that presumes to predict the behaviour of everyone is thus highly inconsistent. Importantly, conventional theory regarding so-called rational choice asserts that preferences are derived from observable evidence. Beliefs, in this case, are assumed to be the product of rational deductions about that nature of perceived reality. Empirical evidence in social psychology and other fields discredit this belief. Many individuals, if not all, are shown by empirical literature to show selective bias about information. Beliefs can often be contrary to observable evidence, and a host of emotional and heuristic shortcuts to make decisions demonstrate no small amount of bias (Rabin, 1998). 

“So what?”, you may be thinking. Are we relegated to be influenced by the world around us, rollercoasters on a track that we can’t escape? Not quite. Being aware of our shortcomings in the domain of decision-making is helpful. I should note that being aware that we are influenced by factors unconsciously will not always prevent this influence. How could it? The influence is unconscious. Despite this, there are strategies for mitigating the downsides of fallacious thinking. 

Firstly, we should understand that we are not completely rational, and embrace this fact. We are not machines, and we cannot optimise every decision we make. There is some freedom in that insight, and it has helped me to appreciate those moments that are impossible to express with even the most rigorous analysis. Secondly, where sub-optimal decision-making might be ruinous (such as in choosing a house), we should turn to our slow-thinking mode. Systems that analyse things like investments are a good start in avoiding poor decisions. What constitutes a good house purchase should be defined according to certain criteria (location, size, beauty, price, return on investment, etc.) and one should rate a potential purchase according to these criteria. Then, choose the purchase based on a systematic scorecard, rather than intuition, and you will go wrong less frequently. The benefit of this approach is that you choose the criteria, so it is specific to your tastes and goals. The last way to prevent being influenced without your consent is to avoid the influence in question. This is sometimes easier said than done, of course. Advertisers do their best to infiltrate your home, your heart and your mind. The only way to avoid their unwanted influence is to avoid their adverts. When learning about a topic, read only from sources that you trust to deliver valuable insights and ignore the rest.

While there is significant academic interest around the insights and applications of decision-making science, there are also useful practical implications. Think carefully when you choose a house, a partner or a new hometown. How much of your decision has been decided by companies, real estate agents and social conventions? Do you truly enjoy travelling, or are you visiting France because Owen Wilson had such a good time in Midnight in Paris? Perhaps you would prefer a local trip, even if it would seem less glamourous to the in-laws. I happen to prefer homemade iced tea over 12-year-old Scotch. Despite trying, for a short time, to live up to the archetypal image of a man I had been presented, I eventually conceded that expensive whiskey was both expensive and unpleasant. Once I decided that taste mattered to me more in a beverage than, I adjusted my behaviour, and I am happier for it. If a decision matters, design a system to narrow down the decisions you need to make, and then choose from the remaining options. Where choices don’t matter much, use your intuition freely, and be honest with yourself. This way, you can enjoy the benefits of sound decision-making while minimising the toll that complex thinking has on the mind.   

Summary 

The world is filled with noise, distractions, making it difficult or impossible to make a truly informed decision. Even when that information does exist, we behave consistently irrationally. We make decisions in two ways, broadly speaking. The first is a gut-feeling, driven by intuition and biology. The second, a ‘slow-thinking’ mode is more systematic. Different situations require that we approach decision-making in different ways. We can minimise sub-optimal decisions in important choices by systematising our strategy for choosing, and by clearly defining the criteria by which we make a choice. Where decisions are not consequential, we can decrease our cognitive load by choosing with out intuition, which is usually effortless.  

References

Kahneman, D., 2012. Thinking, Fast and Slow. 2nd ed. London: Penguin.

Sears, D.O. and Funk, C.L., 1990. The limited effect of economic self-interest on the political attitudes of the mass public. Journal of Behavioral Economics, 19(3), pp.247-271.

Inglehart, R., 1990. Values, ideology, and cognitive mobilization in new social movements (pp. 43-66). Taylor & Francis, Boca Raton.

Rabin, M., 1998. Psychology and economics. Journal of economic literature, 36(1), pp.11-46.

Chai, S.K., 2001. Choosing an identity: A general model of preference and belief formation. University of Michigan Press.