MORE IDEAS FROM Untangling your organization's decision making
The framing effect is a cognitive bias where people decide on options based on whether they are presented in a positive or negative way. Do you prefer your yoghurt with 10% fat or 90% fat-free?
Knowing about the framing effect is vital. It is one of the most significant biases in decision making and particularly important in health care and financial decisions.
Deciding is too much effort so we’re likely to just stick with the default or safer option if it’s already been chosen for us.
When we get offered too many choices, the same thing happens—we shut down, unable to decide. Often, we end up simply choosing anything, just to get the process over and done with.
The decision making process that Dalio, Buffett and Munger use is:
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