Simplifying Decision-Making: Following Huerstic Short Cuts
Have you ever found yourself stuck when making a decision? Whether it’s choosing a restaurant for lunch or tackling more significant life choices, decision-making can be a daunting task. We often overanalyze, fearing that if we don’t consider every detail, we might make the wrong choice and face consequences. The simplest of choices can induce anxiety and make the decision of which taco place sounds best seem like it’s carrying the weight of the fate of the world.
In the above example, the question “Where do you want to go eat?” induces panic for some people. What if you chose the wrong restaurant? What if the one you choose is no good, and then the people you’re with will think you’re no good either? The fear of making the wrong choice can lead to inaction or analysis paralysis, where you spend too much time contemplating every option and end up hungrier and more frustrated.
Heuristics and Bounded Rationality:
In the world of decision-making, there’s a concept called heuristics. Think of heuristics as mental shortcuts—quick decisions based on empirical data. Heuristics might not consider all available data, but they’re often correct. For instance, “I liked that restaurant last time; it would probably be good again” is a heuristic that can simplify choosing where to eat.
Bounded rationality is another useful concept. Unlike exhaustive or optimized analysis, bounded rationality intentionally ignores some information to arrive at an efficient and usually correct decision. This approach acknowledges that there’s not always time to consider every detail.
An example of bounded rationality in the academic literature compared two stock portfolios that were created by students in Germany. One portfolio was based completely on name recognition. If most of the students in the group had heard of the company, they bought the stock. The other portfolio was comprised of companies that may have had comparable financials but lacked brand awareness and market visibility. The research found that investing based on a heuristic that says “if you’ve heard of it, it is probably a successful company” outperformed the portfolio of companies that may have been, in the optimized analysis, as good as the famous ones.
Applying Heuristic Thinking and bounded rationality:
In your daily life, you can apply heuristic thinking by trusting what you could call your subconscious inclination. When selecting a restaurant, the first couple of options that come to mind are often good choices. The job that you are wondering about? Don’t dig too deep. Should you pursue that relationship? Do a quick survey of obvious red and green flags and take it from there. Trust that your initial instincts are, in the preponderance of scenarios, most likely right.
Decision-making doesn’t always require exhaustive analysis. Remember, we can’t know everything, and it’s okay to rely on our instincts and the most obvious cues to make decisions efficiently and effectively. So, the next time you’re faced with a choice, don’t hesitate to recommend that taco place you enjoyed so much last time.
This content was written by Mark Wilkes, AMFT enjoys helping and supporting adults who are experiencing anxiety. He would love to work with you. Feel free to contact him on our Meet the Therapists link.