The Psychology of Decision-Making

Left or right? Sprite or Coke? Yes or no? Every action in our day-to-day lives are dictated by the choices we make. Some decisions come automatically, while others include more complex and important decisions. Our actions are often influenced by mental processing that is heavily influenced by bias, reason, memories, and fears. We tend to weigh between the positives and negatives of our choices, often needing to cope with the consequences afterward. But, what affects your decision-making?

Confirmation Bias

According to Merriam-Webster, the phrase "confirmation bias" is defined as so: the tendency to interpret new evidence as confirmation of one's existing beliefs or theories. People display bias by ignoring critical pieces of contrary information, interpreting equivocal information in their favor, and solely selecting information that proves/sides with their views. Confirmation bias leads people to reinforce and solidify pre-existing views while giving disproportionately little attention to alternative possibilities or counterevidence. The main ways that confirmation bias is demonstrated during decision-making are as follows:

Biased search for information - People preferentially seek out information that confirms pre-existing beliefs while avoiding information that contradicts those beliefs.

Biased interpretation - People interpret ambiguous information as supporting their existing views.

Favoring supporting evidence - People focus on and emphasize information that backs up their beliefs while devaluing evidence against them.

Biased memory - Details that support one's views are more easily recalled, while opposing details are forgotten or excluded.

How are the effects of confirmation bias seen?

Conformational Bias systematically distorts the way we interpret, digest, and see information. The way we analyze, deliberate, and recollect are systematically warped and destroyed. We can see the effects this has on our ability to make good decisions.

Here are some of the major effects that confirmation bias can have on decision-making:

Projection Bias - People substitute their own perspective for the real data, projecting personal biases onto the information.

Distorted Memories- Flawed recall of past decisions' outcomes entrenches confirmation bias for future choices. Failures are forgotten.

Flawed Evaluation - Seeking and interpreting only confirmatory information leads to incomplete and biased evaluation of options. Important contraindications may be overlooked or dismissed.

Overconfidence - The selective focus on supporting data breeds unwarranted confidence in one's position. This discourages seeking expertise or considering alternative perspectives.

Failure Spotting-Biased evaluation focuses on making the preferred option work rather than impartially spotting weaknesses and risks across all options.

The Paradox of Choice

The Paradox of Choice is a very simple & prominent phenomenon that happens in our daily lives. Having many choices or options seems appealing at first, having too many choices can leave people lost, confused, and paralyzed. To handle the paradox, aim to simplify choice sets when possible. When options are abundant, pare down using filtration mechanisms, set time limits, and define your non-negotiable criteria before selecting. In order to better combat this paradox, it is important to break it down and deconstruct the concepts of which the paradox is composed.

Analysis Paralysis - As choices multiply, the amount of time and effort required to thoroughly compare all alternatives soars. This leads to decision paralysis, where people find it incredibly difficult to evaluate all variables and make the optimal choice. The brain literally becomes overwhelmed.

Raised Expectations - When options are limited, it's easier to settle on an acceptable option. But when choices abound, people expect to find the perfect match for their preferences. This raises expectations and makes committing to just one choice that much harder.

Diminished Satisfaction - Even once a choice is made, having considered so many alternatives can make people second guess whether they did in fact find the best option, leading to regret and dissatisfaction. They imagine superior rejected alternatives.

Choice Anxiety - Having too many options increases anxiety that you are forgoing better opportunities. This anxiety discourages people from deciding and causes chronic stress when considering choices.

Cognitive Load - Juggling lots of complex information taxes people's working memory and decision-making capacity. This cognitive load leads to rushing or careless decisions just to complete the choosing process.

The Effects of the Paradox of Choice

• Decision paralysis - People find it very difficult or impossible to make a decision at all, so they delay or avoid choosing altogether.
• Reduced satisfaction - Even after making a choice, people may have lingering doubts that they didn't pick the absolute best option available. This reduces satisfaction.
• Regret - Looking back, people second guess their decisions and imagine alternatives they may have missed, fueling regret.
• Less enjoyment - Having scrutinized every trade-off, people become sensitized to the compromises and downsides of the option they settled on. This can reduce enjoyment.
• Information overload - Too much complex data on choices overwhelms cognitive abilities. This leads to hasty, poor decisions or total avoidance.
• Increased expectations - The more choices available, the more people expect perfection, which sets up disappointment.
• Choice cycling - People keep changing their selections repeatedly since the options start seeming equally attractive. They get stuck in a loop.
• Status quo bias - Sticking with default options or their current state starts seeming preferable to deciding among so many choices.

Elements of a Good Decision

How can we avoid these and make better decisions overall?

1) A good decision considers multiple standpoints and viewpoints

2) Great decisions attempt to solve the root problem, not the effects of the problem.

3)Great decisions consider the holistic impacts of a problem and the impacts of the solution

4)Great decisions weigh short-term and long-term impacts and values