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The Four Villains of Decision Making

The Four Villains of Decision Making

  • Narrow framing: The tendency to define our choices in binary terms. We ask, "should I, or shouldn't I?" instead of “What are the ways I could...?”
  • Confirmation bias: People tend to select the information that supports their preexisting attitudes, beliefs, and actions. 
  • Short-term emotion: When we’ve got a difficult decision to make, our feelings occupy our minds. And this doesn't add any new information that could benefit us. 
  • Overconfidence: People often think they know more than they actually do about how the future will unfold.

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The Four Villains of Decision Making

The Four Villains of Decision Making

https://fs.blog/2013/03/how-to-make-better-choices-in-life-and-work/

fs.blog

3

Key Ideas

Not Making Good Decisions

We are exposed to biases that influence our ability to make good decisions.
  • We are quick to jump to conclusions because we fail to search for information that might disprove our thoughts.
  • We're overconfident. We look for information that fits our ideas and ignore information that doesn't.

Knowing these and other biases is not enough. We need a framework for making decisions.

The Four Villains of Decision Making

  • Narrow framing: The tendency to define our choices in binary terms. We ask, "should I, or shouldn't I?" instead of “What are the ways I could...?”
  • Confirmation bias: People tend to select the information that supports their preexisting attitudes, beliefs, and actions. 
  • Short-term emotion: When we’ve got a difficult decision to make, our feelings occupy our minds. And this doesn't add any new information that could benefit us. 
  • Overconfidence: People often think they know more than they actually do about how the future will unfold.

Defeating Decision-Making Villains

  • Counter narrow framing by widening your options. Expand your set of choices.
  • Confirmation bias leads you to gather self-serving information. Analyze and test your assumptions to overcome the bias.
  • Short-term emotion will tempt you to make the wrong choice. So distance yourself before deciding.
  • Prepare to be wrong. Don't be overconfident about how the future will unfold.

SIMILAR ARTICLES & IDEAS:

The 37%

Mathematics dictates that you should take 37% of the time or options you have to simply look and after that, you should commit to the first option that is better than everything you’ve ...

The brain when we make decisions

The 2 systems of the brain that wok during decision making:

  • System 1 is automatic and quick (like "something feeling off").
  • System 2 is deliberate and slow (like an algorithm).

At times, these systems are at odds with each other, but research shows it's always best to trust an algorithm than your own gut.

Pros-and-cons lists are flawed

There are a few biases they don't address:

  • Narrow framing: the tendency to view an option as your only option.
  • Confirmation bias: our tendency to gather the information that supports our preferred option.
  • Short-term emotion: our tendency to have our judgment clouded when emotions run high.
  • Overconfidence: our tendency to make a decision with too much optimism about how things will play out.

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A checklist for faster, better decisions
  • Write down 3 existing company goals impacted by the decision;
  • Write down at least 3 realistic alternatives;
  • Write down the most important information you...
3 decision-making mistakes that you must avoid
  1. Impulsivity. Thorough decisions combine all three senses – seeing, hearing and feeling. Impulsive decisions always lack one of these elements.
  2. Allowing yourself to be pe...
Pretend You're Advising a Friend

Think outside yourself a little and pretend like you're offering advice. 

The reasoning here is really simple: your short-term emotions get in the way of decisions, and that clouds yo...

Limit The Information You Take In

We usually believe that the more information you have, the better decisions we can make. However, at some point, we cross a threshold where we have too much information. That's when we start to fill in gaps and add weight to information that doesn't matter. 

This makes decision making way more difficult.

Reverse Your Assumptions

You're so prone to continue making the same kind of choices throughout your life that challenging yourself and doing the exact opposite is often the best way to get around this problem. 

The idea here is to confront your default behavior, step outside your comfort zone, and use your imagination to test some completely new ideas.

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Know and conquer your enemy
Know and conquer your enemy

Our brain relies on cognitive biases over clear evidence. Cognitive bias is the tendency to make poor judgments in a consistent pattern. Our unconscious biases are often so strong that they...

Common cognitive biases
  • The Dunning-Kruger Effect: You believe that you're smarter or more skilled than you are, which prevents you from admitting your limitations and weaknesses.
  • Confirmation Bias: When you welcome information that you agree with while disregarding evidence that doesn't suit you — even if it's accurate.
  • Self-Serving Bias: When you blame external forces when things are bad, but credit yourself when it's good.
  • Optimism Bias: You believe you are more successful than others and won't experience any misfortune.
  • Availability Heuristic: You believe that whatever comes to your mind quickly is the right decision.
  • Attentional Bias: You only focus on some points while ignoring other aspects.
  • False Consensus Effect: When you overestimate how much others will agree with you.
  • Misinformation Effect: Your memory has been interfered with, changing how you recall past events.
Master self-care and self-awareness

Hungry, Angry, Lonely, Tired.

This acronym can be used by anyone to help you master self-care and self-awareness. It encourages you to pause and ask how you're feeling. Feeling hungry, angry, lonely, or tired makes you more vulnerable to self-destructive behaviors.

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The Art of Decision-making:
  1. Get 1% smarter every day;
  2. Focus on things that don’t change or change very slowly over t...
Decision-making cascades 

... through everything you do. That's the power of compounding. If you get 1% better at understanding how the world works, how human behavior works, how economic systems function, and understanding your own brain — that 1% improvement impacts everything you do. 

Study things that never change

The best kind of knowledge is not ephemeral junk , that will be useless in a few years, but the core pillars of human knowledge and the major academic disciplines. That knowledge changes very slowly over time  and it’s a core foundation that you can build upon and grow from. 

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Cognitive biases
Cognitive biases

...are common thinking errors that harm our rational decision-making.

We don't always see things as they are. We don't simply glean information through the senses and act on it; inste...

Optimism Bias

Is our tendency to overestimate the odds of our own success compared to other people's. 

Overly optimistic predictions can be dangerous, leading us to waste time and resources pursuing unrealistic goals. In the real world of business, things don't always work out for the best, and it serves us well to know when conditions are not on our side.

How to control the optimism bias
  • Be skeptical of your own rosy expectations for your work. 
  • Assume projects will be more difficult and more expensive than you initially think they will. 
  • Don't trust your good ideas to manifest through positive thinking - be ready to fight for them.
  • Trust the numbers. Numbers are firm but fair, and getting intimate with your business's cash flow can help you make more rational decisions.

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Work on the right decision

The way you frame your decision at the outset can make all the difference. 

State your decision problems carefully, acknowledge their complexity and avoid unwarranted assumptions ...

Specify your objectives

A decision is a means to an endAsk yourself what you most want to accomplish and which of your interests, values, concerns, fears, and aspirations are most relevant to achieving your goal.

Decisions with multiple objectives cannot be resolved by focusing on any one objective.

Create imaginative alternatives

Your decision can be no better than your best alternative.

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Paradox of Choice
Paradox of Choice
It means that while increased choice allows us to achieve objectively better results, it also leads to greater anxiety, indecision, paralysis, and dissatisfaction.
Overthinking lowers your performance

Our working memory is what allows us to focus on the information we need to get things done at the moment we’re doing them. It is also in limited supply. You can think of it like our brain’s computer memory. Once it’s used up, nothing more can fit in.

When you overanalyze a situation, the repetitive thoughts, anxiety, and self-doubt decrease the amount of working memory you have available to complete challenging tasks, causing your productivity to plummet.

Overthinking kills your creativity

A recent Stanford study suggests that over-thinking not only impedes our ability to perform cognitive tasks but keeps us from reaching our creative potential as well.

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Bias is everywhere

Being aware of your own biases doesn't mean you will be free of them. You need a system that will help prevent your proclivities from taking control.

You're not as smart as you think

It wasn't an individual that got people to the moon. It was all of NASA. 

There should be recognition of how many people really should be involved and the need for mechanisms to deliver smarter decisions.

There is safety in numbers
According to Heath, one study at a mid-sized high tech company showed that a group of leaders thought decisions were six times more effective when they considered two alternatives instead of one. Instead of asking a group for its decision, request the two top choices.

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