One of the lessons I took away from Raiffa's class was that certain ingrained behavioral anomalies, which have been well documented in a half-century of research, cloud our decision making process. Just being aware of these can help you be more rational in your approach. ( Raiffa and coauthors John Hammond and Ralph Keeney offered a business perspective on eight well known psychological traps in a 1998 article in Harvard Business Review.)
Here are the four traps Raiffa emphasized in his workshop.
- Anchoring We overrely on first thoughts or the first information we take in. Also, we tend to grant more importance to recent, dramatic events.
- Status-quo This is the "keep on keeping on" trap, where the easiest decision is often to just follow the current practice and ignore better alternatives. Related to this is the theory of sunk costs, the argument that since we have already invested money or resources in a course of action we can't afford to change now. A better way: Don't throw good money after bad.
- Confirming Evidence Seeing and hearing what you want to see and hear. We tend to look for evidence to support what we already believe to be the right course of action and discount counter evidence.
- Framing This is essentially posing the wrong question, which pollutes the decision making process that follows. A bad frame: To remedy the homeless situation we need to build more shelters. A better frame: To remedy the homeless situation we must identify and solve its root causes.
How do you make sure you are thinking clearly to make those big decisions?