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Updated: September 28, 2010 16:05 IST

Dissection of decision process

D. Murali
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Strolling down a supermarket aisle, you see a display of French and German wines, roughly matched for price and quality. After some quick comparisons, you place a German wine in your cart, and continue shopping. Michael J. Mauboussin paints this scenario in ‘Think Twice: Harnessing the power of counterintuition’ (Harvard), and continues the story after you check out…

“A researcher approaches and asks you why you bought the German wine. You mention the price, the wine’s dryness, and how you anticipate it will go nicely with a meal you are planning.”

That’s fine, but the researcher wants to know if you noticed the German music playing and whether it had any bearing on your decision. Like most, you would acknowledge hearing the music and avow that it had nothing to do with your selection, writes Mauboussin.

Effect of experiences

The actual study that the author reports about revealed a major common mistake – that our decisions are independent of our experiences. “In this test, the researchers placed the French and German wines next to each other, along with small national flags. Over two weeks, the scientists alternated playing French accordion music and German Bierkeller pieces and watched the results. When French music played, French wines represented 77 per cent of the sales. When the German music played, consumers selected German wines 73 per cent of the time.”

Obviously, music was making a big difference in shaping purchases; and customers acknowledged that the music made them think of either France or Germany, but more than four-fifths denied the tunes had any influence on their choice, narrates the author. The experiment, as he explains, is an example of priming, defined as ‘the incidental activation of knowledge structures by the current situational context.’

Influence of senses

What comes in through our senses influences how we make decisions, even when it seems completely irrelevant in a logical sense, Mauboussin observes. He mentions examples of studies that have found voices, smells and visual backgrounds, too, impacting behaviour. Such as, how immediately after being exposed to words associated with the elderly, primed subjects walked 13 per cent slower than subjects seeing neutral words; and how exposure to the scent of an all-purpose cleaner prompted study participants to keep their environment tidier when eating a crumbly biscuit.

If that sounds amusing, this can be more so: “Subjects reviewing Web pages describing two sofa models preferred the more comfortable model when they saw a background with puffy clouds, and favoured the cheaper sofa when they saw a background with coins.”

Anchor leaning

A chapter titled ‘Open to options’ discusses how, when deciding, people often start with a specific piece of information or trait (anchor) and adjust as necessary to come up with a final answer. “The bias is for people to make insufficient adjustments from the anchor, leading to off-the-mark responses. Systematically, the final answer leans too close to the anchor, whether or not the anchor is sensible.”

A five-point checklist in the chapter on techniques to avoid the trap of tunnel vision should be of help also to shoppers. One, explicitly consider alternatives, the author guides. For instance, when entering talks, know your ‘best alternative to a negotiated agreement, your walkaway price, and the same two sums for the party across the table.’

Two, seek dissent, though this can be tough. Check if you can ask questions that could elicit answers that might contradict your own views, and if you can then listen to the answers. Do the same when canvassing data, urges Mauboussin.

“Look for reliable sources that offer conclusions different than yours. This helps avoid a foolish inconsistency.” On a related note, he cautions against group think, ‘when group members try to reach consensus with minimal conflict by avoiding testing alternative ideas.’

Hindsight bias

Third, keep track of previous decisions, as a way to steer clear of ‘hindsight bias’ that can make us believe we knew more about the outcome beforehand than we really did! The author suggests the use of ‘a decision-making journal’ as a cheap and easy routine.

The fourth tip is to avoid making decisions while at emotional extremes, such as stress, anger, fear, anxiety, greed, and euphoria. For, ‘our reason can operate most efficiently when we have some emotional poise.’

And, lastly, understand incentives, because these can distort our decisions subconsciously. Financial incentives are generally easy to spot, but non-financial incentives, like reputation or fairness, are less obvious yet still important in driving decisions, counsels the author. What may be individually good for group members can be destructive for the group overall, he adds.

Insightful study than can make you look deeper into decision-making.

**

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