Why do we need to learn on “How to Make Better Decision?”
1. SPOTLIGHT effect. A spotlight only lights a spot.
We (Human) are quick to jump to conclusions because we give too much weight to the information that’s right in front of us, while failing to consider the information that is just offstage.
Quotes from Daniel Kahneman, a psychologist who won Nobel prize in economics. “A remarkable aspect of your mental life is that you are rarely stumped. The normal state of your mind is that you have intuitive feelings and opinions about almost everything that comes your way. You like or dislike people long before you know much about them; you trust of distrust strangers without knowing why; you feel that an enterprise is bound to success without analyzing it.”
2. Spotlight shifting.
What’s in the spotlight will rarely be everything we need to make a good decision, but we won’t always remember to shift the light. When we begin shifting the spotlight from side to side, the situation starts to look very different. We couldn’t possibly hope to make good decision without doing this spotlight shifting.
3. Our guts are full of questionable advice.
Humanity does not have a particularly impressive track of record. Career choices, are often abandoned or regretted. Business decisions are frequently flawed. Often our guts can’t make up their minds at all. Personal decisions are no different. Tattoos reversed, marriage ends.
4. Decision Process vs Decision Analysis
Researchers found that “process mattered more than analysis – by a factor of six.” Often a good process led to better analysis, but the reverse was not true: “superb analysis is useless unless the decision process gives it a fair hearing.”
5. Good-decision making process
A better decision process substantially improves the results of the decisions, as well as the financial returns associated with them. Exploring alternative points of view, recognizing uncertainty, searching for evidence that contradicts their beliefs- can help us in our families and friendships as well. A solid process isn’t just good for business; it’s good for our lives.
6. Pros-and-cons approach
Pros-and-cons approach is familiar, commonsensical, and also profoundly flawed. Research in psychology has identified a set of biases in our thinking that doom the pros-and-cons model of decision making. If we aspire to make better choices, then we must learn how these biases work and how to fight them.