There’s this one scenario I find myself in all of the time:
I’m trying to get home after a meeting.
It’s quicker to drive, so I call an Uber.
And while I’m waiting, I realise the car is stuck in traffic.
I could cancel it and get the train, by now that might be quicker and even with Uber’s
$5 cancellation fee, it would still be cheaper.
But…
I’ve already committed to the car.
I’ve already invested this time waiting and I’d still have to pay that fee.
I’ll just take the Uber.
And then… we sit in that same traffic and I get home later – and for a higher price
– than if I just took the train.
We like to think that we always make rational decisions, but science shows this isn’t
always the case!
In not choosing the train, I couldn’t see past my sunk cost bias, meaning we’re more
likely to choose something we’ve invested time or money in, even if it’s not the best
decision for our future wealth or happiness.
Whether you realize it or not, you make dozens of decisions every day.
Some of these decisions – like what you should eat for breakfast – aren’t important,
while others – like whether you should take a new job – can have a big impact on your
life.
Making a big decision isn’t always easy and sometimes you might not make the choice
that is best for you.
But, certain emotions or situations can lead you to make a bad decision.
Fortunately, understanding more about what influences your decision-making and using
certain techniques can help you make better decisions.
Often, emotions like anger, fear, and sadness can cloud our judgements without us even realizing.
For example, feeling angry can really affect the way that we make decisions.
In a 2016 experiment, researchers asked participants to either write about an event that made them
angry, an event that made them sad, or about their normal evening routine.
Afterwards, participants performed a computer task that involved blowing up a simulated
balloon.
Each puff was worth money, but if they filled the balloon too much, it would burst and they
would receive no money.
In this experiment, people who wrote about an angry event made riskier choices in the
balloon task.
Other studies have found that feelings of sadness can affect your decisions about money,
by increasing how much you’re willing to pay for something.
And fear can lead you to make decisions that aren’t logical.
For example, someone with a fear of flying might choose to drive instead, even though
(for equivalent distances) death rates for driving are much higher than those for flying.
So how can you make better decisions?
First, try to make important decisions in the morning.
By analyzing online chess matches, researchers determined that people generally made slower
but more accurate decisions in the morning and faster but less accurate decisions in
the evening.
In other words, if you are about to make a big decision late at night, "sleeping on it"
and deciding in the morning, may actually be a wise choice.
Next, distance yourself from the situation.
Have you noticed that it seems easier to solve other people’s problems than your own?
There’s actually a name for this – Solomon’s Paradox.
The story goes that the wise biblical King Solomon’s advice was highly sought after
from other people, but he had a lot of personal problems which still lead to his kingdom’s
demise.
People are often wise about problems where they’re not involved.
So, try to think about a situation from a third person perspective – researchers call
this wise reasoning – and practising it can increase your ability to recognise other
people's points of view, understanding the limitations of your own knowledge and reaching
a compromise.
Also, you can try mindfulness meditation for better decision making.
A 2014 study found that just 15 minutes of mindfulness meditation prior to a decision-making
task increased resistance to sunk cost bias – that tendency to keep doing something
just because you’ve put time or money into it.
Meditation helped people to make the best choice for their future success, regardless
of previous actions.
Making decisions isn’t always easy.
But by understanding how things like your mood, time of day, and previous events can
bias your decision-making, you can train yourself to to eliminate factors that predispose you
towards bad decisions and make better
decisions in your life.