Psychology of decision making

What is the goal of this blog?

The goal is to describe how decision making work and what influence them.

Why is this important to know?

Everyone makes decisions every day.Introuced informations can be used in personal or professional life eg. resolve the conflicts, influencing, this knowledges largely uses different manipulative techniques so their understanding can help to prevent from them, achieving the goals, etc.

This blog is based on decision making knowledges of prof. Daniel Kahneman and Amos Tversky in their famous book where summarise existing knowledges and outcomes from their own researchThinking Fast and Slow (Prof. Kahneman received the Economic Nobel Prize for decision making theory).

The decision-making process is carried out by two “imaginary” brain systems system1 and system2. These systems do not exist in the brain thus separated but different parts of the brain have certain common characteristics which can be for better understanding divided into this two systems. Both systems work simultaneously and have limited performance. e.g. If the car’s driver drive in a dangerous situation then the rest of the crew will stop talking because suspects that the driver can’t pay attention to multiple stuff, so then rather don’t interrupt their attention with less important stuff.

SYSTEM1

System1 is fast and react automatically(ie. advantage) without the need for great effort and conscious control response, but at the cost of lower accuracy (ie. A disadvantage).

Functions of system1:

-automatic reactions: System1 operates automatically and reacts to recognised stimulus.
It’s impossible to shut it down eg. if one sees a text (which understands) then automatically reads it and just hard to defend unread it, respectively unless deliberately changes attention.
-specify position of objects: when man opens eyes then brain automatically determines the 3D position of objects and then recognize details of this objects. Identification of source of sound,
-all the time generates recommendations: from intuition, feelings, impressions, thoughts for system2 and usually system2 accepts these recommendations.
-all the time evaluate: Each incentive evaluate as normal/abnormal, good /bad, and responds to variety of other questions such as whether something is new? some threat/ an opportunity? are things going well? should I change attention? is more attention needed for the task?
System1 answer these questions immediately if know the answer (eg. Simple tasks such as 2 + 2). If don’t know answer use intuition, estimates, similarity, typicalness, .. which are readily accessible but can lead to poor decisions.
-Systéme1 store responses to certain stimulus. This relationship stimulus -> reaction is composed of a sequence of steps to be taken(ie. the habit). Thus the occurrence of stimulus in system1 automatically start stored steps of habit.
-delegation on system2: if system1 gets into difficulties (eg. can’t solve the problem-surprise, analytical task, ..) then call system2, which activates attention and
start finding a solution in mind or start rational thinking.

SYSTEM2

System2 activate attention and more advanced mental functions which consume relatively a lot of effort so it’s slower(ie. disadvantages) but gives more precise answers than system1 (ie. Benefit).

Functions of system2:

-control System1: System2 unless activated on the performance of assigned tasks operates in low power mode and uses only a part of its capacity, mainly regards the control system 1 eg. continuous control behavior with the possibility of correcting these automatic responses of system1(eg. system2 keep a decent man when man is angry ..).
System1 automatically believe what perceive(ie. a optimist), while System2 is primarily distrustful (ie. a pessimist).
-If it’s activated then do various complex mostly analytical decisions eg. identification hardly recognizable habits, calculate the complex task eg. 23 * 45, driving a car in difficult conditions, multicriteria decision making, rational argument.
– ‘Reprogramming’ habits (habit = program = sequence of steps) stored in Systeme1 that start automatically triggered on some stimulus and start sequence of steps of stored habits.

Mental activities (mainly provided by systémom2) requiring attention consume more energy (glucose) as a quick tasks of system1 and the brain naturally seeks solutions that save human resources.
Why? because decreasing human resources(of nutrient, energy) brain evaluates negatively. The body has a biologically encoded in DNA need to survive, and therefore anything that directly or indirectly badly affect this need is interpreted by the brain as a threat and the body automatically prevents him and looking for optimal solutions.

System1 and System2 on biological level

Both of these imaginary systems are represented on biologic level in various parts of the human brain.
If we use vertical division of the brain into three areas (beaches brain, emotional brain and the neocortex) then it’s not possible to divide these areas into these two systems since both systems use various brain functions in different areas of the brain, but it’s possible to determine which parts of the brain are most activated in both systems:
-System1 Activated prominently features reptilian brain (reptilian brain), moderately functions emotional brain (limbic brain) and low neocortex.
-System2 Activated prominently features the neocortex, in the medium to low features a of reptilian and emotional brain.

Brain based on different stimulus activate different parts of the brain (ie. The relevant systems) and the allocation of functions between these two brain systems is highly effective because optimizes performance (minimizing resources and improves performance)

Selected characteristics of the brain (bayesis) which affect decision making

Decision making influence various characteristics of both systems, which can from a certain point of view can seem as “errors” (also called Bayesis). Most of these “errors” contains system1.

-e.g. we have a genetically encoded that human in life threatening situations activate the stress response that optimize all human resources with aim to saves a life. We also have this information yet genetically inherited from ancient times when to our ancestors threatened wildlife and then stress response mobilized their resources (especially attention) to a dangerous situation, and this stress reaction often saved his life.
-Example of the stress response at present could be situation while driving at night driver notice near the road just before the car a wildlife(suicide) and before driver is able to consciously aware this situation, fast stress reaction is triggered that forces us to slow down, break a car and save us or animal life(or serious injury). Scientists discover some lag time when stress reaction overtake the conscious reaction.

It’Is the amount of situations at present that doesn’t threaten our life but our brain (wrongly)interprets them as a threat to life and trigger stress response which mobilize our resources(mainly attention) to save our life eg. launch stress response at the public presentation can be seem as brain error (Bayes).

From the many existing brain errors choose 3 errors which will be shortly described:

1 characteristic: halo effect

Description:

System1 from the available informations jump early to conclusions(ie induces, generalizes). When load these generalizations information (early conclusions) also together load associations and emotions from the memory. Emotions have their intensity and a certain inertia which affects the further take decisions.
Therefore, it depends on the order of receiving informations and earlier received(verbally/nonverbally) informations influence receiver much more than later received informations. Sometimes it’s so big influence that later received informations are fully ignored. This phenomenon is also popularly referred to as the “first impression”.

Use:

It can be used in any communications(argumentation, persuasion, ..)
First impression is very important so it’s also appropriate to start with positive criticism(ie. first to formulate the satisfaction and later dissatisfaction, and agree to resolve issue), it’s often used in convincing and influencing

communication:
-Ie. manipulative question “Will be John a good leader? He is intelligent and strong” It comes ‘yes, will be a good leader’ answer to the mind because ’good and intelligent’ are positive attributes(this response comes from system1). It leads to the early conclusion without asking what attributes should be considered for selecting a good leader(this question comes from system2)? What if other attributes were thief, liar … result would be wrong conclusions. Respectively, even if there were listed positive attributes there remain strong negative first impression.
e.g. When we ask “Is John friendly?” the other thoughts came to mind as when asks “Is John hostile?” The impact of associative memory and the halo effect is significant even in cases when informations aren’t linked together in sentences(this fact is claimed by multiple scientific studies).

estimation:
eg. in project management. it is known that the Group estimation is more precise than individual estimation, because someone spread estimate other undershoot but on average it converges to the lowest estimation error. The problem is when individuals share their estimates, because estimate of someone (especially strong influential individual) influence estimate others(due hallo effect), so it is suitable to eliminate this disadvangate with some of the appropriate methods for team estimation(eg. suitable is Planning Poker technique which is often used in managing agile software project).

Characteristic 2: simplicity over complexity

Description:

when human face a complicated issue, so often the complicated question change to simple question e.g. at recruitment: ‘is it wise’ to accept
this potential employee? our brain transform to ‘do I like’ this potential employee?.
Another question “Do I purchase product X” is transformed into “Do I like the product X”. In this case the reason for this transformation is the fact that a comprehensive purchase analysis(known as decision making paralysis) is necessary to identify, acquire, analyze relevant information (eg. To identify key attributes, prioritize them and then make multi-criterial decisions). All these steps consume energy particularly relatively large amount of energy of system2. As mentioned above brain naturally optimizes its resources. This claim can’t be completely generalized because in many cases, especially when it comes to expensive buying human doesn’t simplify and activate rational decision making of system2. Or when human is tired(system2 isn’t activated) brain mostly uses response(eg. intuition,..) from system1.

Use:

be aware of this characteristic of the brain and conscious activate rationality in important decisions.

Characteristic 3: concreteness over generality

Description:

Decisions for general alternatives transform system2 into thinking,finding particular alternatives and it’s more difficult (the body consumes more energy, which due to the aforementioned optimization resources body does not like) as specifically formulated alternatives, where brain don’t need to consume their scare resources.

Use:

prefer concreteness of generality in communication

combinination of bayesis create new other uses.
-eg. combination hallo effect and concreteness over generality effect:
example two questions were asked in the period of terrorist attacks:1question: How many people are willing to put into insurance in case of death of a person due to some reason 2question: How many are willing to put into insurance in case of death of a person due to a terrorist attack. result: people were much more willing to give money for insurence in terrorist attack.

marek malý

marek.maly@ambiso.sk

Like helping people, Business & IT, research & innovations, nature, travelling, sports(bike, mountaineering, ..)

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