Diary: Improving your decision-making

I'm reading "59 seconds" by Prof Richard Wiseman. Page 245 begins the chapter "Never Regret a Decision Again". It looks at complicated decision-making processes, and how we can improve them.

Chapter starts with a quote by Freud:

When making a decision of minor importance, I have always found it advantageous to consider all the pros and cons. In vital matters however ... the decision should come from the unconscious, from somewhere within.

Dijksterhuis and Olden looked at three decision-making strategies. The study was about getting people to select a work of art for an office, and then seeing a few months later if they regretted their decision. In this way, they wanted to see which strategy was the most effective.

The following separate strategies were investigated:

1. study poster for 90 seconds, list key likes/dislikes, carefully analyse thoughts, then make a selection
2. glance at posters, then choose the one they liked best
3. see the posters quickly, spend 5 minutes solving difficult anagrams, briefly examine the posters a second time, then make a choice

Participants were given their choice of poster. A month later, they  were asked how satisfied they were with their choice, and how many euros they were prepared to sell it for.

The study concluded that those in S3 (strategy 3) wanted significantly more for the poster than the other groups. The researchers concluded that S3 was the superior strategy. The research was repeated on other complicated decisions (which apartment to rent, car to buy, shares to invest in), and S3 was the consistent winner.

The point is this: people who are shown the options but then kept busy working on a difficult mental activity make better decisions than others. The researchers claim that it is about harnessing the power of your unconscious mind. When having to decide between options that differ in one or two ways, your conscious mind is a good arbiter. It can only juggle a small number of facts, though, and is not good when things are complex. In the latter case, the mind tends to focus on the most obvious elements, and miss the bigger picture. Your unconscious mind is much better at this.

Thinking too hard about an issue is in many ways as bad as making an instant choice. It is all a question of knowing what needs to be decided, then distracting your conscious mind and allowing your subconscious mind to work away.

(My own observation: I have seen a lot of very clever investors argue backwards and forwards over the many merits and demerits of a particular company. There seems to be a stage where everyone knows what the factors are, but it's difficult to know which factors are the significant and correct ones. So I can well see that S1 and S2 are likely to be suboptimal).

Gilovich studied regret. He asked people to look back over their lives and describe their biggest regret. He found that 75% regretted not doing something, rather than doing something. It's like the poet Whittier said: "For of all sad words of tongue or pen, the saddest are these: It might have been".