Why Are We Such Poor Decision Makers

[wildthing]

You have a brain. Therefore you are biased. https://implicit.harvard.edu/implicit/takeatest.html

[Concestor0]

The majority of influences in the human decision making process are transparent to most of us. If there were some sort of program into which a person could enter all relevant data and have it spit out a decision I think that we would be shocked at how different our lives would be.

I have heard the expression "decision making machines" a few times to describe our minds. Despite the importance of quality decision making our ability and capacity to quickly and efficiently produce a decision seems to be just as important.

Our brains consume a substantial portion of our physical resources so efficiency is important, mulling over every little detail and re-assessing every choice every time is not efficient. This leads to a tendency to make assumptions, create biases and become narrow minded.

We also tend to protect our happiness, we are far more likely to make a decision that keeps us happy even at the expense of our long term benefit or the happiness of others. More often than not this means overlooking, discrediting or denying important information.

Unfortunately the answer to "how do we become better decision makers?" is not as simple as "think more carefully".

- people are accustomed to and comfortable with making decisions that are not well informed or considered.
- people are unaware of many of the factors that lead to a decision.
- people are often likely to make a decision that benefits them, especially in the short term.
- people are lazy (efficient) decision makers, they put in the minimum effort and time to make a personally satisfying decision.
- people are very resistant to making a decision that contradicts their social circle.
- not making a decision is often more distressing than making a poor decision.

In a nutshell, we are hard wired to make fast / happy decisions.

[jyl]

Originally Posted by Concestor0

The majority of influences in the human decision making process are transparent to most of us. If there were some sort of program into which a person could enter all relevant data and have it spit out a decision I think that we would be shocked at how different our lives would be.

I have heard the expression "decision making machines" a few times to describe our minds. Despite the importance of quality decision making our ability and capacity to quickly and efficiently produce a decision seems to be just as important.

Our brains consume a substantial portion of our physical resources so efficiency is important, mulling over every little detail and re-assessing every choice every time is not efficient. This leads to a tendency to make assumptions, create biases and become narrow minded.

We also tend to protect our happiness, we are far more likely to make a decision that keeps us happy even at the expense of our long term benefit or the happiness of others. More often than not this means overlooking, discrediting or denying important information.

Unfortunately the answer to "how do we become better decision makers?" is not as simple as "think more carefully".

- people are accustomed to and comfortable with making decisions that are not well informed or considered.
- people are unaware of many of the factors that lead to a decision.
- people are often likely to make a decision that benefits them, especially in the short term.
- people are lazy (efficient) decision makers, they put in the minimum effort and time to make a personally satisfying decision.
- people are very resistant to making a decision that contradicts their social circle.
- not making a decision is often more distressing than making a poor decision.

In a nutshell, we are hard wired to make fast / happy decisions.

And that nutshell must have been advantageous to our survival back in the caveman days.

[JD159]

I think because our brains are a lot smarter than our bodies.

It's like putting a v8 in a tiny car with no suspension mods. Lots of power but can't put it down properly.

Our biological drives gravitate towards hedonistic tendencies that can be easily influenced and manipulated despite our brains efforts to stay rational.

See Seinfeld and the chess battle between a man and his member when dating a beautiful stupid woman.

[Tobra]

This is because we are very well developed for the environment in which we evolved

This

Caveman sitting at a laptop, basically

[NoRush993/951]

Originally Posted by tabs

Boy O Boy 2ND OTR 16 GDP came in at 1.2%...I quiet frankly thought the number would have been better...maybe with the FED revisions it will be a bit better..

But on the longer term prognostication....of the economy tanking without the FED QEing...it is right on the money.

So how is that growth number workin out for ya BO? does it fit in with your Alice in Wonder Land speech..

GDP is no longer a relevant figure. It includes government spending which is all debt driven and healthcare insurance and pharmaceutical prescription cost increases. The real number is most likely -10% on an annual basis. It's simply peak debt. Study France at the end of the 1700's. History repeats.

[NoRush993/951]

I've read that every three generations we have to relearn all the lost lessons which were learned the hard way. When living is easy, the motivations are tempered.

[tabs]

Originally Posted by NoRush993/951

GDP is no longer a relevant figure. It includes government spending which is all debt driven and healthcare insurance and pharmaceutical prescription cost increases. The real number is most likely -10% on an annual basis. It's simply peak debt. Study France at the end of the 1700's. History repeats.

Ohhh mg. How interesting. I see population growth at 1.6% and as such with more people your economy expands. Economies rumble on as people need to eat and live.

That said the long term trajectory has been an economic deflation of the global economy of scale as the consumers are tapped out with heavy debt loads. Thus your negative gdp rate. The only reason why you get a slightly positive growth rate is because of an activist monetary policy and continued deficit spending which is used to stabilize the economy.

Otherwise I presume you have read what I write and know my position. I also presume you more than less agree with me. Further since u comment you see that I have a rather sophisticated abstract dynamic.

[NoRush993/951]

Originally Posted by tabs

Ohhh mg. How interesting. I see population growth at 1.6% and as such with more people your economy expands. Economies rumble on as people need to eat and live.

That said the long term trajectory has been an economic deflation of the global economy of scale as the consumers are tapped out with heavy debt loads. Thus your negative gdp rate. The only reason why you get a slightly positive growth rate is because of an activist monetary policy and continued deficit spending which is used to stabilize the economy.

Otherwise I presume you have read what I write and know my position. I also presume you more than less agree with me. Further since u comment you see that I have a rather sophisticated abstract dynamic.

Tabs - your posts are a most enjoyable and thought provoking read.

[Porsche-O-Phile]

Give them time...

For every one that's got a nugget of insight there are about four that are shameless self-promotions and puffified pontifications of pomposity and probably seven or eight that read like the ramblings of a fatalist.

[jyl]

Originally Posted by NoRush993/951

GDP is no longer a relevant figure. It includes government spending which is all debt driven and healthcare insurance and pharmaceutical prescription cost increases. The real number is most likely -10% on an annual basis. It's simply peak debt. Study France at the end of the 1700's. History repeats.

You need to consider total debt (household, corporate, government) as well as total assets.

[scottmandue]

Originally Posted by jyl

Humans have such poor decision making.


However, is this because we are so poorly developed, or is this because we are very well developed for the environment in which we evolved?

Yes!