Temporal Discounting - Deepstash

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3 Reasons Why You Make Terrible Decisions (And How to Stop)

Temporal Discounting

It is a quirk which makes us value the present opportunity more than a future opportunity. This is known as ‘Present Bias’ in psychology.

Example: If offered a choice between getting $100 now or $150 after a year, we are more likely to take up the money offered right now.

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Make Better Choices
  • Seek good information. Be skeptic and never just assume that what you’re being told is always true.
  • Avoid common pitfalls, like making decisions without enough time or information.
  • Look at previous mistakes so you learn from them.
  • Check in with yourself and ensure that the environment isn’t influencing your decisions unnecessarily. 
  • Take care of yourself. You are unlikely to make the best decisions when tired or unwell.
  • Make time to think. The multitasking and distraction deluge to which we’re subjected every day can undermine good decision-making.
  • Analyze well. Not getting the outcome you wanted doesn’t necessarily mean the decision was bad. 
Our emotions are short-term biased

Our emotions are obsessed with the present moment because it’s difficult to look past our immediate fears and anxieties. And this prevents good decision-making.

The sweet spot in decision-making is to find the short-term failures that enable huge long-term successes to happen in the first place.

“Risky” behavior you should consider
  • Propose “moonshot” ideas, knowing that 90% of them will get shot down, but that if one of them gets accepted, it will be a huge boost to your career.
  • Be excessively bold in your dating life, stating exactly who and what you want.
  • Buy difficult books expecting that most of them won’t be useful to you, but also that, occasionally, one will completely change your life.
  • Say yes to every invitation knowing that most of the events/people will be boring, but that occasionally you’ll meet someone really interesting.
Optimizing life for fewer regrets

Most of us are afraid of messing thing up. But we rarely ask, “Would I regret that failure?” If the answer is “no,” then that is absolutely a risk you should pursue.

Sometimes, the right decision becomes crystal clear when put into these terms.

Improve decisions by focusing on the process
Improve decisions by focusing on the process

Most people assume that good decision making is choosing a course of action that leads to the desired outcome.

In reality, decision making is about how you end up with your decision, not what the decision leads to.

Thought-provoking questions

Before making a decision, don't just ask the obvious questions like "what are my alternatives?" or "what are the consequences?"

Consider instead these questions:

  1. Why might my belief not be true?
  2. What other evidence might be out there?
  3. Are there similar areas I can look for to gauge whether similar beliefs to mine are true?
  4. What sources of information could I have missed?
  5. What reasons could someone else have to support a different belief?
  6. What other perspectives are there?
Think about what you can’t know

Asking yourself critical questions forces you to think about what you can't know.

Critical questions direct you to friends, mentors, communities, books, courses, and even podcasts for insights that encourage an outside perspective.