🤷♂️ Why do we decide what we decide?
The illusions of decision making and what influence our choices.
As humans, we like to think we are in the driver’s seat of our lives all of the time. When we choose what to eat, where to go for holidays, or who to be friends with, we do so based on our logical reasonings and preferences.
But what if I told you, we're not actually as rational as we think when we make our decisions?
Our minds play tricks on us every day
Throughout the years, there have been many mind-bending optical illusions that took us by storm. Like whether you see a woman or an old man in the same picture, or the famous white and gold or blue and black dress phenomenon. Something we don’t notice enough though, are cognitive illusions. Here’s an example:
In the above ad from the 2000s, 3 newsletter subscription plans were offered. Out of 100 people, 84% chose the 3rd option for US$125. When the 2nd option was taken out, the majority chose the 1st plan for $59. Relative to the $125 print only plan, the print & web plan for $125 seemed like a great deal, hence 84% chose it over the cheaper $59 plan. Conclusion: we do not know our preferences that well, and therefore we are susceptible to external influences.
Watch a more detailed explanation and other examples of cognitive illusions in this TED Talk by Behavioral Economist, Dan Ariely.
The science behind guesstimating
When asked how many people are reading this Monday Mavens edition right now, without the real data we might need to estimate based on at least one piece of information. It could be the number of total subscribers, weekly readers, or Life at Mekari’s social media followers. If the first piece of information you see is the total followers of @lifeatmekari on Instagram, which is around 1,ooo, then your guesstimate would be somewhere near 1,000. This is called the Anchor Effect: our tendency to rely too much on the first piece of information.
This social experiment by Business Insider demonstrates the Anchor Effect and breaks down how we can utilize it for good decision making.
Fear, a huge decision-shaping force
One key in making the right decision is by assessing its risks and benefits. As we try to take calculated risks, most of us confuse our gut instinct with fear.
Statistics show the odds of dying in a car accident over the course of your lifetime are 1 in 606. There's zero chance you'll die of stage fright. Which one are you more afraid of?
The presence of fear causes us to overestimate risk, and vice versa, its absence causes us to underestimate risk. Keep in mind to always assess the actual level of risk by examining the facts, and not based on your level of fear.
Read the full article on fear’s effect on calculating risks and how we can counter it by balancing emotion with logic here.
May you have a great week ahead full of fulfilling decisions!