Making Good Choices

We would like to believe we are logical, rational people, who make decisions we want to make, out of our own volition.

Unfortunately for us, this is not always true. We actually make quite a few decisions because we are manipulated and out of irrational thinking.

Many companies capitalize on the predictable forces that motivate us to make a particular purchase.

On the surface, it would seem that making a decision is something that goes on in our minds alone. But in reality, choosing involves our psychology, biology, neurology. Many decisions we make are not based on rational thought.

It can be physically exhausting to make numerous choices or even one heavy weighted decision.

When it comes to marketing, the experts try to make decisions easy for you, so they can sell more products. For example, have you ever noticed how many impulse items are placed near the checkout counter in a store. By the time you are done shopping and ready to check out, your brain is not usually as vigilant as it had been when you were making sure you got the best deal in the store. By the time you are ready to leave, you are mentally done, and not well equipped to make the same decisions you did on your shopping tour. So you might just pick up a little inexpensive item as you are checking out, without giving it as much thought.

Additionally, when we have too many choices, we may not make any.

Experts in marketing understand how we choose some of our purchases Mark Lepper and Sheena Iyengar, psychologists did a well known study called the “Paradox of Choice”. They presented some customers with six varieties of jam, and some with 24 varieties. The people who had a choice of six were more likely to buy than the people who had more varieties to choose from.

Dan Ariely, a behavioral economist, has written several books about the irrational decisions we make and says that we are generally impulsive, we waste money, procrastinate and underestimate the risks we take. When we make decisions, our choices are affected by our emotions, expectations, and societal norms. This causes us to make flawed decisions. In reality we are influenced by many irrelevant factors that affect our psychological reasoning, not our logical economic reasoning. The word free , for example, tempts us to give up some other choice that might really be better suited for us.

By nature we make decisions irrationally, whether we make these choices individually or in groups. We make many mistakes from irrational thinking. Many decisions require much more information and deep thought than we usually give them.

Our memory easily recalls the first, the last, and peak moments of events and experiences. Given this type of recall, when we make a choice about something, we tend to forget the negative or inconvenient parts of the experiences. This is why sometimes people go back with former partners, because they remember the good times and tend to forget how they may have been disappointed by them.

Another factor against rational thinking takes into consideration the idea that we are social animals. At times we let family members and close friends make decisions for us.

Studies have shown that our irrational thinking may come from how our brain is wired evolutionarily.

Do we make decisions that maximize our pleasure, proving we make rational decisions, or does this prove we make irrational decisions?

The answer is that the reason we make choices is much more complex than this. Much of our behavior has to do with our self interests, and in the end our habits fail us in the way we process information.

People really don’t like making decisions. We would rather rely on our habits and tend to prefer to think automatically. There are times we don’t make any decisions because of the stress it would cause us. In order for people to make a decision, they need a basis of trust.This is one of the ways name brands and big business get consumers to choose their product or their store, by making the decision feel safe from a trusted and known name. Since people can become overwhelmed when faced with too many choices, they will tend to aim their decision towards what they know and what they trust to reduce the risk of making a wrong decision.

In the real estate market , a common practice is to show people a couple of houses that are in the higher end range of their budget. they they will show them one at nearly the same price, but much nicer looking. Many potential home buyers will happily stop their search and take the house that was a little lower and nicer, feeling they are getting a bargain.

Another example of irrational thinking can be seen in this example, which is known as hyperbolic discounting. If you were going to buy a car and the salesman tells you the model you like will take three days to get. But they have the car you want in stock, with a $500 upgrade and you can have the car today. Most people will take the car in stock with the upgrade for the pleasure of driving it home today, instead of waiting the three extra days. Here is where irrational thinking comes into play. If the car salesman say they can get you a car that has the upgrade in 30 days for $500 more, or if you choose to wait 33 days, you can get the car without the upgrade. Even though it is the same three day difference, most people will wait to get the car they originally chose without the upgrade. In reality, the consumer should treat the extra three days the same, but the temptation to get it now seems to outweigh the logic of whether you really need the extra expense and unneeded accessory.

Procrastination is another way we avoid choices that make us uncomfortable.

We also tend to follow the crowd instead of figuring things out by evaluating the information and comparing it against our personal preferences. We tend to be lazy decision makers. If react to herd behavior, we are not thinking for ourselves and likely not making rational choices for ourselves.

One way to make more rational decisions is to be as aware as possible. It may come down to the idea that we have incomplete thinking and lack of depth consideration about the situation. Poor decisions are a result of flawed thinking. It is difficult for us to admit that we may not think as clearly as we believe we do.

Rational thinking is a matter of taking the available and relevant considerations and to organize, analyze, and access the facts, data, judgments, opinions and pertinent information that will assist us in solving the problems. To look at the creative and practical aspects of a situation, takes a lot of energy and interest. We need to pay attention and make sure the information we are getting is accurate.

We need to process the information and come up with sound reasoning to come to a conclusion that benefits us. Rational thinking will lead to rational action, but this depends on how we gather, organize and analyze the information we have ascertained. It is much more complex to make rational decisions. We don’t know we are making irrational decision, we are just looking for an easier way to come to a decision.

Another reason we don’t think rationally has to do with the fact that we are not taught how to think rationally. Most people can’t explain how they think in steps. This makes it difficult to evaluate their own thinking process and so they can’t teach others either. This is because some of our rational thinking takes on a level of being done automatically. We also lack the ability to understand what makes good thinking.

Every situation is different and different scenarios need different types of thinking. Yet we may not be adequately equipped to have a variety of cognitive styles, and so we keep using the same limited tools we have.

Brainstorming is a way to gain some new insight into thinking. Consciously identifying problems and collecting information in order to get to the best conclusion and putting it into action.

How should we decide rationally? We need to consider which risks are associated with the options we choose. If we look at the situation from various angles , we may be able to identify the actions we need to take.

There are cause and effects from the actions we will take. When we look at possible things that could go wrong, we might be able to avoid an unwanted situation.

As we clarify what is going on and gain an understanding of the situation, we might be better equipped to set priorities and know what we need to do next. The more complex the situation, the more viewpoints and pinpoints we need regarding the events at hand.

But logical thinking is not the only factor that comes into play. We have emotions and deeply ingrained beliefs and biases that may juxtapose the logical thinking. When emotions are at play, we lump them into a bigger general category and label them.

Necessary thought processes to make a decision:

• we need to select the ideal option from several possible situations and consider all the potential risks.

• identify actions that we need to take and think about how we will handle them.

• if there is a problem, look at what happened that caused this undesirable situation.

• when there are many variables and complex situations, look at what are the different scenarios, clarify what is important, implement ideas that will allow you to take action, and figure out the next steps that need to be taken.

• weigh the pros and cons of your potential decision.

• it may be helpful to include other people in order to get their opinions and come to a decision that is more well thought out. There may be negatives to this that could interfere with clear thought processes. If you ask someone who is not an expert, they may only be able to offer their irrational and flawed thinking. This could lead to heated emotions, and conflicts, and many people will not seek the advice of others.

• an integral part of rational thinking is to ask meaningful questions. that will lead us along a desired path. There is a skill to forming and asking good questions that is basic to analyzing and leading to rational decision making.

Rational thinking is really a process. It may be an arduous one, but when done with a clearly thought out process, rational thinking can actually become part of our automatic thinking which will lead to meaningful and beneficial outcomes.