We know it's difficult to make decisions. To choose between chocolate cake or lemon meringue pie is not easy for me. But I have to admit that there are things in life that are even more important than dessert. How to choose? The equality of desire for two things, such as desserts, makes the choice very difficult even when the outcome of the choice is not very important. But surely in life we make choices based on a rational consideration of the benefits and disadvantages for our lives? Yes? Well maybe not.
For example, we are aware that our decisions may be influenced by advertising. But then surely when we are conscious of an influence we can negate its effect, at least for the most part. So what about the decisions which do not have anything to do with advertising? Are they based on reason? For many years there was the idea that the market was a perfect example of reason used in pursuit of the wish to gain as much as possible. We have seen that the perfect market (i.e. the rational market) beloved of economists is an illusion. The market sees movements of 'sentiment' in the value of shares - which are irrational . The clue is in the use of the word 'sentiment'. We have an explanation for this sentiment as group-think, which means that the market cannot be rational.
But I want to concentrate on are the decisions we make about normal life. A decision to buy something on-line should be simple once you have decided to buy it. It's just the price, yes? If its more than just a can of Heinz beans, no. Because its not only price, but the anticipated after-sales service, the delivery cost and, in general, if you trust the seller. Should I buy a freezer from John Lewis or Comet? But to ascertain all the facts necessary to rationally justify the decision is not easy. In fact, we depend on our instincts, that is, we guess. And for things which are even more complex it is almost impossible to have all the facts necessary to make a truly rational decision. For this reason it is so difficult e.g. to decide what house to buy or rent. The more we see the houses available, the harder it is to reach a conclusion - there are so many variables to compare. And even if we have a list of priorities at the beginning, we will choose something different in the end. We will buy the house with which we have fallen in love.
Recently we have seen that scientists are beginning to take this lack of rationality in our decision-making more seriously. There are now scientific studies that seek to respond to the idea that our decisions can be explained as the result of evolution and not by reason pure and simple. The idea that researchers are examining is that throughout our lives we learn by experience how to make decisions in a pragmatic way. They propose that we weigh things unconsciously for the most part: we have heuristics, rules of thumb, that we apply and of which we are not really conscious. According to them, this is an advantage because to have to think in detail about each and every decision would not be practical. We do not have the time, as it seems we make between 2,500 and 10,000 decisions every day.
Now, it is obvious that there are very useful instinctive reactions - disgust protects us from many diseases; fear in the presence of strange noises, especially when it is dark, may save our lives. There may also be of survival benefit from anger - it will motivate us to punish a wrongdoer and therefore maintain social cohesion. But there are two heuristics, i.e. rules of thumb, which are not connected directly to emotions, but which, it seems, we use every day.
There is the heuristic of 'recognition' which will direct you towards taking a familiar option where there is very little information to enable you to make a rational choice - maybe going to Waitrose to buy something out of the ordinary.
And then there is the heuristic 'enough' that tells you to choose the first option that meets or exceeds your expectations, when to delay a choice would harm your interests. For example, marriage. As the Australian comedian Tim Minchin sang so romantically in a song dedicated to his girlfriend -
"If it hadn't been you it would have been somebody-else"
26 June 2015