One can find on Amazon a number of books written on decision making. Some are professionally researched psychological studies that cover practically all the biases and other noise involved in most of the decisions individuals make every day. Then there are those books written by consultants whose business is making money by presenting condensed versions of what has been written professionally while adding anecdotal short stories that emphasizes the few points under discussion. Last we have those who were to university and obtained their degrees in English and journalism and who feel competent to write on almost everything on the basis of their degrees. They try to popularize the bits and pieces that they feel they have researched and yet do not fully understand. In a nutshell one has the reality of how many individuals approach decision making.
I have done research and experimentation in cognitive psychology so I have some idea of how the professional goes about researching decision making. I also read philosophy and am familiar with logic. These two areas cross over more than one might think. The main key or principle I would believe rests on perception. Why start here? The answer is rather simple, most of us are creatures of our own culture and social conventions. You see, human behavior is a combination of individual differences and group membership. Even a hermit is still part of a culture group by background, by learning, by growing up in the culture. Very few individuals can throw off that yoke of culture in which they were born and raised. So it should come as no surprise that those raised in Europe and even in different parts of Europe should think a little differently from those of us who have grown up in America. That is why we sometimes find conflicting results when studying various psychological phenomena around the world or even within countries.
The one problem with studying decision making is that one cannot reduce it to a single variable. That is, when we study interactions we look for constants, dependent variables, and independent variables. A constant is a physiological process such as how the eye sees the color red. Stare at a red circle of sufficient size for some period of time and then look away. What do you see? A red circle where none physically exists. If we place two very small lights against the one wall with each being several feet apart from the other and then darken the room, an individual sitting a distance sufficient to observe both lights at once will see two lights in a stationary pattern. This is our dependent variable for reasons of what happens next. Alternatively turn them off and on, that is, when one light is on the other is off. Our perception will be that first one and then the other turn off and on in an opposite manner. But if we decrease the time delay so that the lights turn on and off very quickly our perception is that the light on one side is moving to the other side even though both are stationary. Our perception is on of movement. Of course this is a physiological process but our perception is psychological, we think we see movement where none exists. And we can even play with the moving light perception to change the direction we think we see in our perception. The beauty of this experiment is that it hold true for all cultures.
So much for simple experiments. The devil is in those experiments where we cannot isolate the variables effectively or in isolating them to the exclusion of all others we reach false conclusions. An example is a heuristic or a sort of model we carry in our brains. Simply put, a heuristic is a pattern that can be quickly applied in times of the need of immediate decision making. A stick in the grass that looks closely like a snake we tend to treat as if it were a snake because we are too close to its physical presence to study it at length. So we quickly jump or spring away from it. Sometimes we think we perceive a phantom automobile and slow down or swerve to avoid it. But heuristic need not be one involved with a sense of danger. After all, it is a rule of thumb. We may heft an object, that is we may pick it up to feel its weight. If it feels too heavy then we may decide to put it in a wheel barrow and use that vehicle to move it some long er distance than we would try to do if the distance were shorter. A great many of our decisions in life are made on the basis of non scientific measurement or logical argument.
Now one can go on the internet and find all the wonderful biases and other contaminants to logical decision making. Then one can try to weed out the various perceptions that are biased by all the biases. But we are not likely to do that in most of our everyday lives. If I have planned to eat chicken for tonight’s dinner I am likely to buy pork chops only if the price is such that I feel I am getting a better value. Logically, pork shops cost more per pound than chicken. But if the butcher is selling pork chops at enough of a reduce rate per pound then I am likely to change my mind and buy the pork for I like the taste of pork more than chicken. This is both an emotional decision and a logical one. It is logical because it uses an If-Then-Else statement or condition test. But it is still an emotional one because one of the values is that I prefer the taste of pork over the taste of chicken. On the other hand, if I must choose some set of stocks to buy in the stock market, then I would be wise to do my due diligence research and use a number of tests to discover what stocks may be the best buy. Of course much of that testing is based on market conditions, the condition of the immediate economy and the prospective conditions in the future. The humorous thing about all this improved decision making is that we must rely of subjective perceptions of present and future conditions. We might be better off throwing darts at a list of stocks.
Finally, let us go back to the vaunted Japanese decision making of the seventies and eighties. We American were in awe at how fast they could make a decision. Yet what they did was actually very simple. Study a process, a business opportunity in great depth and weigh all the possible outcomes before making the decision and the commitment to enter that market or process or partnership deal. Yes, anytime you have the luxury of time for good decision making then you are bound to make good decisions, unless your decided that betamax was the correct VCR technology. Sometimes even the best made decisions will turn out to be wrong because the market is not logical. Perception and reality are two different things and don’t always meet.