Judgment and Choice

Learning Objectives

By the end of this chapter, you will be able to:

• Explain the role of intuition in decision-making and its advantages and limitations
• Identify and describe major heuristics used in judgment formation
• Recognize common unconscious biases that affect decision-making
• Analyze real-world decision-making scenarios involving self-control and social cooperation
• Understand why people often fail at self-control and the factors that contribute to these failures
• Apply knowledge of decision-making principles to improve personal choices

Introduction

While theoretical models help us understand how decisions should be made, real-world decision-making is far messier. Most of our choices are made under conditions of uncertainty, with incomplete information, and under time pressure. In these situations, we rely on mental shortcuts, gut feelings, and automatic processes that can both help and hinder our decision-making. This chapter explores how people actually make judgments and choices in the real world, examining the psychological processes that guide our everyday decisions.

Decision-Making under Uncertainty: The Role of Intuition, Heuristics, and Biases

As we’ve seen already, most of our choices are made under conditions of uncertainty. In some cases we don’t have access to the probabilities of the different outcomes; in other cases we don’t really know how much utility the different outcomes would give us. Even if we do have all of the information and we technically have a situation that is decision-making under certainty, the number of competing options may be so large that we can’t accurately compute utility. Because so much of real-life decision-making is so complicated, we tend to fall back on shortcuts such as intuition and heuristics to help us make decisions and form judgments.

The Role of Intuition in Decision-Making

Intuition is a type of thinking that involves understanding that is quick and effortless and often involves insight (Myers, 2002; Price & Norman 2008). Generally, people cannot verbalize the thought processes that are active when they are thinking intuitively. Prince Charles, in the 2000 BBC Reith lecture, summed up intuition with the following:

Buried deep within each and every one of us there is an instinctive, heart felt awareness that provides—if we allow it to—the most reliable guide as to whether or not our actions are really in the long term interests of our planet and all the life it supports. . . . Wisdom, empathy and compassion have no place in the empirical world yet traditional wisdoms would ask ‘without them are we truly human?’

There are many headline stories about the successes of intuitive thinking (they almost always begin with “I could just sense that something was wrong…). Unfortunately, our intuitions also often fail us and lead us to misjudgments.

Think About It

If intuition can lead to such stunning failures in thinking, why would we possibly use it instead of cold, logical, and rational thought?

Because we are required to make thousands of decisions daily (when should I breathe and blink, what should I wear, should I stop at the orange light, is the person I’m talking to genuinely happy or faking it, etc) and if we thought logically and rationally about every judgment and choice we make, we would have no time left for anything else. Decision-making seems to be made on a dual track system, at one level intuitive and effortless, at another level conscious and effortful. Some decisions have immense consequences and therefore deserve deep thought, you should probably not use intuition to decide your college major. However, intuitive decision-making releases us from the burden of the thousands of daily decisions which need to be made quickly or whose consequences are minimal. That is, intuition is cognitively cheap (Acker, 2008).

Even though intuition seems to involve no conscious thinking, there is ample evidence that intuitive thinking can really only occur once one has mastered a skill (Rieskamp, 2008; Goodie & Young, 2007). To master a skill and become an expert in something one must practice for a long time. Experts tend to view problems in a different way from novices. As an example, an expert in English grammar (often a native speaker) usually knows the right answer but cannot verbalize why it is the right answer. A novice in English grammar (someone learning English) tends to make more mistakes than an expert, takes longer to make decisions, and often makes decisions based on rules that can be verbalized (Reber, 1989).

Likewise, Klein (1997) reports about the decision-making processes of both novice and expert firefighters. When put in training scenarios, novice firefighters make far more mistakes than experts. When the expert firefighters were asked to verbalize why they made the choices they made, they commonly report that they did not make any decisions, they just “saw” what needed to be done and did it. Clearly, the experts relied on intuition in their decision-making (Zsambok & Klein, 1997).

Heuristics in Decision-Making

Heuristics are mental shortcuts that help decision makers make choices and form judgments in the face of uncertainty. Heuristics contrast with algorithms. Algorithms are methodical rules which guarantee that a problem will be solved. If you wanted to trace a maze to find the solution, you could use an algorithm which involved rules that would guarantee success. Perhaps the rule set would look like the following:

1. Go left at all choice points if possible.
2. If striking a dead end, backtrack to a choice point.
3. If left turn has previously been chosen, turn right.

If this algorithm sounds cold and methodical, be comforted in knowing that this is the way computers solve problems, but is generally not the way humans do. A human would probably solve the maze using a heuristic, perhaps working simultaneously from the front and back of the maze, trying to make the ends meet. Like intuition, heuristics often lead to faster judgments and decisions (Gigerenzer & Goldstein, 1996). Unfortunately, like intuition, heuristics often lead to errors in thinking. We will consider three of the more famous heuristics in detail, the availability heuristic, the representativeness heuristic, and the recognition heuristic.

The Availability Heuristic

The availability heuristic is a mental shortcut used to help us judge the probability of some event (Tversky & Kahneman, 1982b). Basically, if an event is readily available in our minds, then we assume it occurs often. Generally, this is a good strategy to follow because the things that occur the most frequently are the things we have experienced the most. Going back to Aristotle’s laws of association, the more frequently we experience an event, the stronger the memory for that event. If asked to think of a bird, the image that will come to mind (be available) will probably be the type of bird you have seen the most times, a bird which is common where you are from (for me it’s a robin).

Of course, there are other reasons things come readily to mind other than the frequency of their occurrence. Tversky and Kahneman’s (1973) most famous example of the errors in judgment the availability heuristic can lead to involved the following question: “In a typical sample of text in the English language, is it more likely that a word starts with the letter K or that K is its third letter (not counting words with less than three letters)?” (p 211). Most people believe it is more common to have K as the first letter but in fact, there are twice as many words that have K in the third position. Why would this error in judgment occur? Because we have experience with alphabetizing things and we alphabetize using the first letter, not the third. We have more “experience” with K in the first position and therefore, words starting with K are more available to our memory.

The advent of constant access to the news and entertainment on cable television networks, the radio and the internet has led to a hypervigilance toward world events. Airplane crashes have not become more common, in fact, they have dropped 65% in the ten year period ending in 2007 and this period even encompassed the tragedy of 2001 (Wald, 2007). However, when airplane crashes do occur, the news reports them endlessly, thus making crashes come readily to mind. Fear of flying is at an all time high. However, just as with the commonness of words with the letter K as the first letter, the availability of airplane crashes in our memory does not equate with their frequency. Just like words with K in the third position, we tend not to see all the airplanes that do not crash.

The Representativeness Heuristic

As a demonstration of the role the representativeness heuristic plays in judgment formation, Tversky and Kahneman (1982) provided participants with the following:

Linda is 31 years old, single, outspoken, and very bright. She majored in philosophy. As a student, she was deeply concerned with issues of discrimination and social justice, and also participated in antinuclear demonstrations. Please check off the most likely alternative:

_____ Linda is a bank teller.

_____ Linda is a bank teller and is active in the feminist movement.

Nearly everyone believed that Linda was a feminist bank teller. However, it must be more likely that Linda is simply a bank teller (a larger group) than a feminist bank teller (a smaller group). When using the representativeness heuristic, people judge the membership of people or objects into categories based on how well the person or object represents the “average” member of the category. In this case, the description of Linda seems somewhat representative of people that belong to the category of feminists. Because Linda seems to represent the category, she must be a member of that category. “As the amount of detail in a scenario increases, its probability can only decrease steadily, but its representativeness and hence its apparent likelihood may increase (p. 98).”

The implications for this become readily obvious in the following: Which would a jury be more likely to believe, “He fled the scene of the crime” or “He fled the scene of the crime because he was feeling guilty”? Which one is more likely to be true?

The Recognition Heuristic

The recognition heuristic is a mental shortcut whereby we tend to prefer those things with which we are familiar (Goldstein & Gigerenzer, 2002). A focus group was used to tell the makers of the headache product HeadOn which type of commercial would most effectively sell their product. Turns out the most effective commercial involved repeating the name of the product over and over and over. I had always wondered why a company like McDonalds would continue to spend such a large portion of their budget on advertising, but an understanding of the recognition heuristic should make it obvious. When children are presented with French fries or chicken nuggets in McDonald’s wrappers or plain wrappers, the kids clearly preferred the ones in the McDonalds wrappers despite being the exact same product (Robinson, Borzekowski, Matheson, & Kraemer, 2007).

In the movie The Distinguished Gentleman, a conman played by Eddie Murphy who had the same name as a recently deceased long-time senator got his name on the ballot. His campaign slogan was “Jeff Johnson, the name you know.” Since he had no political experience at all, he should have lost resoundingly, instead, he won. Though this seems far fetched, voting for what you are familiar with certainly takes far less effort than doing the homework to learn about each of the candidates.

Unconscious Biases in Decision-Making

As previously described, thinking seems to proceed on a dual track system. On the conscious level thinking is planned, on the unconscious level thinking is automatic. Automatic thinking is done to relieve the conscious mind of all the tedious judgments and choices that need to be made and usually the automatic thinking does a good job. However, some unconscious biases can slip in. Though everyone seems to use these biases, some seem more susceptible to their influence than others. McElroy and Dowd (2007) examined one personality factor, openness-to-experience, which seems to make people more likely to fall back on at least one of the biases when making judgments.

Additionally, some biases are so unconscious they don’t even seem to make sense, Simonsohn (2007) reports in his study “Clouds Make Nerds Look Good” that during the university admission process, rates of admission rise 11% on cloudy days. An understanding of the most notorious of these biases can help us become better thinkers. We will examine anchoring, framing, and overconfidence, but others exist as well such as the hindsight bias (Fischoff & Beyth, 1975) and the gambler’s fallacy (Sundali & Croson, 2006).

Anchoring

One common bias we use when forming judgments is called anchoring. When we are presented with the need to form a judgment, we often start with an implicitly suggested reference point (the “anchor”) and make adjustments to it to reach our estimate. When asked to quickly estimate the product of 1 × 2 × 3 × 4 × 5 × 6 × 7 × 8, people’s average guess is 512. When asked to estimate the product of 8 × 7 × 6 × 5 × 4 × 3 × 2 × 1, people’s average guess is 2,250 (Tversky & Kahneman, 1974). Apparently people are really bad at this task in either case, the actual answer is 40,320. However, the main point is that when the question started with a small number (1) the estimate was much lower than when the question started with a large number (8). People seem to anchor on the first number they see when forming their judgment.

In a study of the effects of anchoring on real estate prices, Northcraft and Neale (1987) presented the same house to four different groups of realtors with the only difference being the listing price presented on the sheet containing the specifications. The realtors were asked to estimate the appraised value, and suggest a recommended selling price and the lowest offer that should be taken for the home. Afterwards, the realtors were asked to describe which factors they used in their judgments, none of them stated that the listing price of the specification sheet was a factor. However, since this was the only difference, the realtors most certainly must have used the listing price as an anchor point from which to begin their judgments since increases in the listing price are clearly related to increases in their judgments.

Framing

Framing refers to the way a question is asked or an alternative is presented. The framing of an alternative or question can bias judgments and choices considerably. Ground round is the best class of meat for making hamburgers that is generally available. The butcher can charge more for this premium meat which is usually packaged as 90% lean. However, what if the package said 10% fat, would the butcher sell as much?

Harris (1973) presented participants with a movie, then asked half of them “How long was the movie?” and the other half were asked “How short was the movie?” After seeing the exact same movie, those presented with the first question judged the movie to be 130 min long whereas those presented with the second question judged the movie to be 100 min long. Similarly, after being presented a basketball player, some were asked “How tall was the basketball player?” while some were asked “How short was the basketball player?” Estimates were 79 in. and 69 in. respectively. Clearly this is a bias which can be used by lawyers to quickly and easily get the answers they are looking for.

Overconfidence

Confidence is generally a good thing; it gives us motivation and makes us persist at tasks. Unfortunately, we tend to have overconfidence in our judgments of what we know creating an unconscious bias. When drivers are asked, 82% respond that they are in the top 30% of safe drivers. Sixty-eight percent of lawyers in civil cases think their side will win the case. When Harvard business school students were asked, 86% said they were better looking than their classmates. Though these examples of overconfidence might be of benefit to the individual, other cases clearly are not. When spouses argue, usually both are absolutely confident they are right and their spouse is wrong. In most wars, both sides are confident that theirs is not only the right moral position, but also they are confident that their side will prevail.

Check Your Learning

• When making decisions in the face of uncertainty we often make choices without really knowing why we made them. Sometimes, we use our intuitions, or gut feeling, when choosing. Other times we fall back on heuristics which are mental shortcuts that simplify the decision-making process and usually lead to the correct choices.
• Heuristics allow us to make decisions in situations where we can’t even verbalize the choice situation.
• Our judgments are often influenced by unconscious biases.
• Though heuristics and biases usually operate unconsciously and lead to better choices, sometimes they do not. Many notorious examples exist of bad choices that have arisen as a result of heuristics and biases.

Real Life Decision-Making: Self-Control Choices and Social Cooperation

Most decisions we make are between two choices. Usually one of these choices is easier or more fun at the moment, perhaps even illegal or immoral. The other choice is usually harder or less fun at the moment. Ironically, the easy and fun choice tends to lead to bad outcomes in the long-run whereas the hard choice tends to lead to good long-term outcomes. Self-control refers to the control of behavior using internal controls (such as diligence or morality) rather than external controls (such as rules and laws). Behaviorally, one is said to exhibit self-control when they choose that thing which is harder at the moment and bypass the easier thing. Self-controlled choices tend to lead to optimization. Similarly, one is said to exhibit impulsiveness if they choose the thing that is easier or more fun at the moment.

Examples of self-control choices abound in our lives. A student that has a test in the morning that chooses to stay home and study is exhibiting self-control. A classmate in the same situation that instead chooses to go to a party is exhibiting impulsiveness (Rachlin, 1974; 1991; 2000). However, these self-control and impulsive choices are really part of a larger pattern of behavior which leads to desirable or undesirable consequences (Rachlin, 1995). Another way to think of self control is: “… is a conflict between particular acts such as eating a caloric dessert, taking an alcoholic drink, or getting high on drugs, and abstract patterns of acts strung out in time such as living a healthy life, functioning in a family, or getting along with friends and relatives.” (Brown & Rachlin, 1999, p. 65)

Brown and Rachlin (1999. p. 65-66) describe self-controlled decision-making in slightly different terms: “In formal terms, suppose two alternative activities are available, a relatively brief activity lasting t units of time, and a longer activity lasting T units of time, where T=nt and n is a positive number greater than one. In other words, the duration of t is less than that of T, and n of the smaller t’s fit into a single T. The ambivalence inherent in a self-control problem depends on two conditions:

1. The whole longer activity is preferred to n repetitions of the brief activity, and
2. The brief activity is preferred to any t-length fraction of the longer activity.”

The alcoholic might prefer a lifetime of sobriety (T) over a lifetime of drunkenness (nt). The only way to truly achieve the sobriety they prefer is the repeated choice of sobriety, day after day after day. The problem of addiction arises because one night of drunkenness always beats one night of sobriety. These situations involving self-control choices are ones in which the consequences of our choices fall to ourselves, sometimes the consequences of our decisions fall to others.

In situations where the consequences of our actions fall to others, there is again usually two basic choices, one easy (often illegal or immoral as well) and one hard. We exhibit selfishness when we make the choices that are easy for us because they tend to have consequences that are bad for others. Social-cooperation is exhibited when we make choices that are hard because they usually have consequences that are good for others (Rachlin, 2002). Some simple examples might involve littering or speeding. When I was stopped at a red light the other day I witnessed a classic case of selfishness. The person in the car next to me unrolled their window a crack, and then threw their trash out the window. Then, when the light turned green, they took off in their car like a bat out of hell, completely disregarding the safety of others. Both of these behaviors are considered to be selfish because they are acts which are beneficial to the individual (they now have a clean car and got to their destination sooner) and society suffers the consequences (the roads are a little more dirty and unsafe than they were before).

The tragedy of the commons is a formalization of the problem inherent in the conflict between social-cooperation and selfishness. In situations where collective resources are shared by a group of people (such as common grazing areas for shepherds), it is in people’s inherent best interest to try to exploit as much of the resources as possible. Overgrazing and overfishing are the common outcomes when there are shared resources. It is in a fisher’s selfish best interest to catch as many fish as possible (make more money), but it is in the collective best interest for each fisher to limit their catch such that the group together only harvests a sustainable level of fish. Unfortunately, if no external controls such as legal limits are in place, the result usually is a “tragedy” involving dead fishing waters where none of the fishers can catch anything. A classic view of conflict states that everyone working in their own selfish best interest create an outcome that no one wants, whether this conflict be fishing, grazing, or nuclear arms races. Brown and Rachlin (1999, p. 66) conclude: “The social cooperation problem may be formalized in the same way as the self-control problem: two alternative activities are available; one maximally benefits an individual person, p; the other maximally benefits the group, P=np.”

The problem of self-control can be considered a special form of the social-cooperation problem. In the social-cooperation problem, acts which benefit the self tend to exact a cost against the collective group of others. In the self-control problem, acts which benefit the ourselves today tend to exact a cost to all of our future selves.

How Important are Self-Control and Social-Cooperation

The ability to make self-controlled choices is probably the most important skill one can achieve in their lives and the greatest gift we can teach our children. Mischel and Baker (1975) exposed preschool children to a delay of gratification task (a measure of self-control). Children were given a pretzel-rod and a bell. The experimenters then told the children they were going to leave the room for some time. If the children wanted to eat the pretzel, all they had to do was ring the bell and the experimenter would return immediately and the child would be able to eat the pretzel. However, if the children could wait until the experimenter returned, they could have a marshmallow (a more preferred reward). There was considerable variability in the children’s ability to wait for the preferred reward.

Mischel, Shoda, and Peakes (1988) followed up with these children as adolescents. Children that had been better able to wait for a marshmallow as preschoolers were rated as more academically and socially competent as adolescents. There was even a correlation between ability to wait as a preschooler and SAT scores taken in high school. Though controversial, SAT scores are correlated with college grades and college grades are correlated with various measures of job success. Ultimately, ability to wait for a marshmallow while a preschooler is correlated with success in life. This definitely sounds like something I need to teach my children!

Success in life always requires us to bypass momentary pleasures. If you want to be financially successful (rich!) you must bypass the pleasures that spending your money right now could provide (a yummy cheeseburger perhaps) and instead invest it for a larger return in the long-run. If you want to be spiritually successful you must bypass the pleasures you could receive on Sunday morning by sleeping in and instead go to church regularly. If you want to be successful in college, you must bypass the short-term pleasures you could receive by going to parties or watching television and instead spend the time studying. If you want to be…alright you get the idea, ALL individual success comes through repeated self-controlled choices (Rachlin, 2000). Though some of us are better than others at making self-controlled choices, all of us fall short of our full potential when we occasionally make impulsive choices. However, if you have made it this far in the text, then you are probably pretty good at bypassing pleasures (I’m sure you can imagine something you could be doing right now that would lead to more gratification than reading this text!).

Ultimately, all success that a society has comes from social-cooperation. As described previously, when people are given the ability to choose between selfishness and social-cooperation, the “natural” outcome is a tragedy that no one wants and if each individual is given the opportunity to choose freely, the collapse of civilization seems the inevitable outcome (Rachlin, Brown, & Baker, 2000; Brown & Rachlin, 1999). However, this seems a bit extreme because there are both internal and external controls in place which keep selfishness in check and ensure the success of society. Ideally, as children grow up they gain a sense of morality which invokes a feeling of guilt in them when they deviate from the good of others and act selfishly (Freud refers to this as the Superego). The great Christian writer C. S. Lewis (1952) describes a Universal Human Morality or Natural Law which is shared by everyone. I don’t murder and steal because I feel in my gut that these behaviors are simply wrong. However, this internal control isn’t perfect (and seems to be almost totally absent in a few individuals such as those with antisocial personality disorder which used to be referred to as moral insanity); I can choose to ignore this Natural Law, therefore external controls are also in place. External controls such as laws and mores force people to choose social-cooperation. A small fraction of individuals refrain from murdering and stealing, not because they believe these behaviors are wrong, but because they are afraid of being caught and sent to jail.

Why We Often Fail at Self-Control

Often, when we are making bad choices (choosing impulsively), we know we are making bad choices but we do it anyway, why? Though occasionally we make bad choices because we don’t understand the consequences, often we know perfectly well what the consequences of our choices are, but choose to ignore them.

Not Enough Experience

The outcomes of impulsive choices tend to feel good now whereas the outcomes of self-controlled choices tend to feel bad now. When given the choice, the dieter clearly knows that dessert is going to taste and feel good now, whereas skipping dessert is not going to be fun. Even a baby knows that dessert tastes good; jars of Gerber desserts are much easier to feed a baby than jars of Gerber strained peas. However, the long-term consequences of dessert eating are less clear and need to be learned. It is only through experience that we know that skipping dessert tends to lead to weight loss and eating dessert leads to weight gain. It is well established that ability to make wise choices increases with age and experience (Levin, Weller, Pederson, & Harshman, 2007). One of the reasons we fail to make self-controlled choices is that we do not yet have enough experience to know the long-term consequences of our choices.

Faulty Experience (the role of superstition)

However, a dieter does not need to learn the long-term outcomes of dessert eating exclusively from their own experiences. We can also learn, through the process of social learning, about the long-term consequences of our choices by seeing what happens to others. In college I had a dorm mate that made bad choices (sleeping in, partying, etc) and really quickly failed out of school. I was able to learn from the experience, I concluded that if I made the same types of choices, I too would probably suffer the same fate. I was able to anticipate the probable long-term consequences of a series of choices without having experienced the consequences myself. This is the way social learning is supposed to work.

However, I remember a television program called Beverly Hills 90210 which featured a bunch of spoiled high school kids with silly problems. As the show progressed, the kids got too old for high school so they all “graduated”. Almost all of them went to an elite university (the fictitious California University). The funny part was, during the years the program revolved around high school, we never saw those kids studying, we only saw them out having fun and having personal crises. What lesson might a naïve person pull from this? Partying and having fun is the way to get admitted to a good university! If anyone really believed this, then it could definitely explain at least some of the bad choices we make. In a more believable way, advertising’s job is to make us fail to understand the consequences of our choices. Beer commercials always feature people having fun, never the hangovers or the severe consequences of alcohol addiction.

Delay Discounting

Another common reason we fail to exhibit self-control is delay discounting. Quite simply, a promise of $20 which you are to receive today is more valuable than a promise of $20 which you are to receive in a year (Rachlin, 1991). The value of the $20 is discounted (lost) when its receipt is delayed. Though the exact formula for the discount function is subject to debate (Brown, 2000; Myerson & Green, 1995; Rachlin, 2006), the general properties of delay discounting function are not. As the delay to the receipt of a reinforcer increases, the perceived value of that reinforcer decreases. Rachlin used the properties of the discount function to help describe why people gamble even in the face of heavy losses (Rachlin, 1990; Rachlin, Siegel, & Cross, 1994). A separate, but similar, function exists for probability discounting (Rachlin, Brown, & Cross, 2000; Rachlin, 2006). Many bad decisions, such as the unsuccessful dieter, can be explained using discounting.

The person trying to lose weight is faced with the following dilemma, eating dessert feels good right now whereas not eating dessert feels bad right now. Because these consequences are immediate, their values are not discounted. However, the long-term consequences of eating dessert are bad whereas the long-term consequences of not eating dessert are good. The values of these long-term consequences, since they are delayed in time, are discounted. Even though the long-term consequences of eating dessert include weight gain, the very thing the dieter is trying to avoid, the weight gain doesn’t occur until some distant point in the future, a point which is hard to see and therefore has little impact on decision-making today. The value of dessert right now appears to be more valuable than weight loss due to the immediacy of the dessert.

An understanding of the nature of the discount functions gives us a few important tools for increasing self-controlled choices (Rachlin, 2000).

Think About It

How might a person on a diet take advantage of their knowledge of the discount function to help them lose weight?

If the dieter were to make the choice about whether or not to eat dessert in the morning rather than at the moment the dessert cart arrives, they would inevitably choose to skip dessert. This is because at the farthest left point in time (labeled morning) the value of losing weight exceeds the value of dessert. When the choice is made far enough away in time, the dieter can “see” the right choice. Unfortunately, if allowed to switch choices, the dieter will often choose dessert when the time comes because its value is higher at that point in time (labeled dessert time). However, if the dieter can make a precommitment to skipping dessert in the morning, that is, if they can make a situation whereby their ability to switch choices is removed, they will often be successful at skipping dessert. Perhaps they could only bring enough money to the restaurant to afford dinner, or they could tell their dinner companion to stop them from choosing dessert.

Uncertainty

The consequences of our actions, especially the long-term consequences, are uncertain (Brown & Rachlin, 1999; Brown & Lovett, 2001). When participants in Brown’s (2006) experiment were asked for the probabilities of events they experienced during an experiment, the most common response given was 50%, indicating that they believe it was a random process, despite the fact that in actuality the event occurred 85% of the time. People have an unfortunate tendency to equate a probability they don’t understand with randomness and unpredictableness. Though uncertain, 85% is clearly not unpredictable. Though the long-term consequences of our decisions is often probabilistic, that does mean they are either random or unpredictable.

If it were possible to know that smoking was guaranteed to give you lung cancer and make you die a painful death, no one would smoke. This is not how the world works. Instead, the probability of getting lung cancer and dying a painful death increases if you smoke and decreases if you don’t smoke. This uncertainty makes self-controlled decision-making even harder. The smoker that is contemplating quitting might say, “My great aunt Ruth smoked 3 packs a day and she lived to be 109!” or “My cousin Bob quit smoking, but then got hit by a bus the next day.” Even though the truth is that smoking increases the probability of lung cancer, these vivid cases are in some ways more convincing (especially to the smoker that is looking for justification anyway).

How Human Decision Making Affects the Future

In times of environmental stability, animals generally benefit through optimization (self-control) while in times of environmental instability, momentary maximization (impulsiveness) seems to be the best strategy. Studies of animal choice tend to reveal that impulsiveness dominates (Brown, 2000). Humans on the other hand, tend to be better at making self-controlled choices. Though almost all animals have evolved behaviors which allow them to live together in groups, the mirror neuron system combined with language abilities seems to have given humans a leg up on the evolutionary ladder allowing for levels of self-control and social-cooperation not possible with other animals.

So though the ability to make effective choices has been heavily selected in all animals, it seems to be particularly true in humans. Admittedly, humans tend to be selfish and impulsive at times but language abilities allow them to benefit from the experiences of others, thus allowing us to understand the long-term consequences of our actions in ways other animals could never possibly do. This clearly makes self-control and social-cooperation the dominant decision-making options. However, since we are less than perfect, external controls have been put in place to ensure a harmonious society.

There has been a new understanding in recent years of the long-term consequences of our choices on other people, both those currently alive and those not even born yet. This global level thinking which is epitomized by the green movement is encouraging. Though it is easy to watch the news which tends to feature the consequences of bad choices people have made, the new style of thinking which is coming to dominate gives me hope. Maybe we as a society can put aside our individual selfishness and truly work together, making the hard choices that benefit us all.

Check Your Learning

• The decisions we make regularly often consist of two choices, one easy and one difficult.
• Generally, those choices that are easy at the moment are bad in the long-run and those that are hard at the moment are good in the long-run.
• In the self-control problem the consequences of our choices fall to ourselves and we maximally benefit in the long-run by making the hard choices.
• In the social-cooperation problem the consequences of our choices fall to others and society maximally benefits in the long-run when each individual makes the choice which is hard at the moment.
• Despite a variety of internal and external controls on behavior, we often fail and make the choice which is easy at the moment.
• We make the easy choice for a variety of reasons including a failure to understand the consequences of our decisions, discounting of delayed outcomes, and a lack of understanding of the uncertainty inherent in any choice situation.

Learning in the Real World: How to Quit Smoking!

We can use our understanding of decision-making principles to help us enhance our self-control. If you are trying to quit smoking, you can modify the value of smoking versus not smoking. The difficulty in making the right choice remains the same – smoking provides immediate pleasure while the health benefits of not smoking are delayed. However, if one could somehow lower the value of smoking or raise the value of not smoking, the story would be different.

When I was quitting smoking, this is exactly what I did. To raise the value of not smoking, I gave myself an extra reward. Any day that I didn’t smoke, I allowed myself to buy any candy I wanted (one of my other vices). However, lowering the value of smoking was a more difficult task. I was living in Pittsburgh, PA at this time and it was February, definitely not a good time to be a smoker that is stuck outside. I made sure to watch all the smokers huddled outside my building and told myself that was what I had looked like when I smoked, not very bright looking. This effectively took away some of the value of smoking.

I was able to raise the value of not smoking a little bit and lower the value of smoking a little bit; it was enough that the value of smoking at the moment was lower than the value of not smoking at the moment, I quit!

Key Terms

Algorithm: A methodical rule that guarantees that a problem will be solved.

Anchoring: A bias in decision-making whereby our judgments are influenced by a reference point which is given.

Availability Heuristic: A mental shortcut which makes us believe that things that come easily to mind occur more often than things that do not come easily to mind.

Delay Discounting: The loss in value of a reinforcer due to a delay in its receipt.

Framing: A bias in decision-making whereby our decisions are influenced by the way a question is asked or a choice is presented.

Heuristics: Mental shortcuts that help decision makers make judgments and choices in the face of uncertainty.

Impulsiveness: The choice for things which are easier at the moment. Related to momentary maximization.

Intuition: Type of thinking that involves understanding that is quick and effortless and often involves insight.

Overconfidence: A bias in decision-making whereby we are more confident than correct, an overestimation of the accuracy of one’s beliefs and judgments.

Precommitment: Situation where the individual makes a decision well before the actual time where consequences would be given and removes the ability to switch choices later.

Recognition Heuristic: A mental shortcut that biases us towards choosing those things that are familiar to us.

Representativeness Heuristic: A mental shortcut used to assess probability whereby the more an object appears to represent a class of objects, the more likely we believe it belongs to the class of objects.

Self-Control: Control of behavior using internal controls (such as diligence or morality) rather than external controls (such as rules and laws). Self-control is exhibited when one chooses things that are harder at the moment. Related to optimization.

Selfishness: Type of decision-making when a person chooses the option which benefits themselves but harms others.

Social-Cooperation: Type of decision-making when a person chooses the option which is costly to themselves but benefits others.

Tragedy of the Commons: Description of conflict where each individual, seeking out their own selfish best interest, utilizes common resources in a way which leads to a tragic outcome that affects the entire group.

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