How to Make Better Decisions (with science)

Summary

This video explores how emotions and biases influence our decision-making, often leading to suboptimal choices. It highlights the concept of sunk cost bias, where people continue with decisions they’ve invested in, even if it’s not the best choice. Through real-life examples and studies, the video explains how anger, sadness, and fear can cloud judgment, affecting choices in everyday life. It also offers strategies to improve decision-making, such as making important decisions in the morning, distancing oneself from personal situations, and practicing mindfulness meditation. By understanding these factors, viewers can make more rational and beneficial decisions.

Takeaways

• 😀 Sunk cost bias makes people stick with decisions, like taking an Uber despite traffic, even when it's not the best choice financially.
• 😀 We often make decisions without realizing emotional biases, such as anger, fear, and sadness, which can lead to irrational choices.
• 😀 Angry feelings can lead to riskier decisions, as shown in a study where participants made riskier choices after recalling an angry event.
• 😀 Sadness can lead to irrational spending, as it may make people willing to pay more for things than they normally would.
• 😀 Fear can cause illogical decision-making, such as preferring driving over flying despite higher death rates associated with driving.
• 😀 To improve decision-making, it's recommended to make important decisions in the morning when your mind is more focused and accurate.
• 😀 People tend to make faster but less accurate decisions in the evening, so 'sleeping on it' can help improve the quality of big decisions.
• 😀 Solomon's Paradox explains that people often provide better advice to others than they do for themselves, making it easier to solve other people's problems.
• 😀 Practicing wise reasoning, or viewing a situation from a third-person perspective, can help you make more informed and balanced decisions.
• 😀 Mindfulness meditation can improve decision-making by reducing the effects of sunk cost bias, leading to better long-term choices.
• 😀 By understanding how factors like emotions, time of day, and past investments influence decisions, you can train yourself to make better choices in life.

Q & A

What is the sunk cost bias, and how does it affect decision-making?

The sunk cost bias is the tendency to continue investing in a decision or action because of the time, money, or effort already spent, even when it no longer makes sense. It can lead people to make irrational choices, like sticking with an Uber ride despite knowing the train would be faster and cheaper.

How does anger influence decision-making?

Anger can cause people to make riskier decisions. In one experiment, participants who wrote about an angry event made riskier choices in a task involving inflating a balloon, potentially risking their money to earn more.

What effect does sadness have on decision-making?

Sadness can increase a person's willingness to pay for things. Studies have shown that when people are sad, they may overestimate the value of purchases, leading to decisions that might not be the most financially sound.

How does fear affect decision-making?

Fear can lead people to make decisions that aren't logical. For example, someone with a fear of flying might opt to drive long distances, even though driving is statistically more dangerous than flying.

Why is it better to make big decisions in the morning?

Research shows that people tend to make more accurate and thoughtful decisions in the morning. As the day progresses, decision-making can become quicker but less precise, leading to poorer choices.

What is Solomon’s Paradox, and how does it relate to decision-making?

Solomon’s Paradox refers to the phenomenon where people can give better advice to others than make wise decisions for themselves. It suggests that when we’re emotionally involved in a decision, it’s harder to be objective. Viewing decisions from a third-person perspective, or using 'wise reasoning,' can help overcome this bias.

How can mindfulness meditation help improve decision-making?

Mindfulness meditation can reduce biases like the sunk cost bias by helping individuals focus on the present moment. A study showed that just 15 minutes of mindfulness meditation before making a decision led to more rational and future-oriented choices.

How does the concept of ‘sleeping on it’ relate to decision-making?

The idea of 'sleeping on it' suggests that taking time before making a big decision can lead to better outcomes. Research has found that people tend to make slower, more accurate decisions in the morning, which may be a result of having time to reflect and rest.

What is the role of emotions in everyday decision-making?

Emotions like anger, sadness, and fear can influence even mundane decisions. These emotions can cloud judgment, leading to choices that are more impulsive or not based on rational thinking, like choosing an Uber ride over a quicker, cheaper train.

What is the main takeaway for improving decision-making from the video?

The key takeaway is that by being aware of the biases and emotional influences on our decisions, such as the sunk cost bias, anger, or fear, and using techniques like mindful meditation or wise reasoning, we can make better, more rational decisions in our personal and professional lives.