Decision Mechanics

Insight. Applied.

The neuroscience behind bad decisions

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People often make irrational decisions. An article in Quanta Magazine describes how too much choice can often be to blame.

The article also discusses the attempts of neuroscientists to understand the mechanics underlying irrational decisions. Technologies like functional MRI (fMRI) are driving the emerging field of neuroeconomics. Neuroscientist Paul Glimcher claims to be

…aiming for a grand unified theory of choice.

One theory coming out of this research is that divisive normalization plays a role in choice. Divisive normalization comes from research into the visual system.

The brain is a power-hungry organ—consuming 20% of our energy while representing only 2-3% of our mass. It therefore makes sense for us to have energy-conserving optimizations in our cognitive processes. The visual system removes information that is uninteresting and highlights the surprising and novel.

Some neuroscientists believe that a similar process is in play when we are confronted with choices. When presented with a choice between 2 or 3 items, the process copes well. However, when faced with the myriad choices that are characteristic of the modern consumer society, the process fails us and leads to irrational decisions.

The theories coming out of neuroeconomics are controversial. It’s a young field. However, using the tools of neuroscience in this way could certainly lead to fresh insights into longstanding questions in economics.

Glimcher says that the research has already improved his own ability to make good choices.

Rather than pick what I hope is the best, instead I now always start by eliminating the worst element from a choice set. […] I find that this really works, and it derives from our study of the math. Sometimes you learn something simple from the most complex stuff, and it really can improve your decision-making.

Latin American Leadership and Effective Governance seminar

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Leadership and Effective Governance seminar poster

I gave a talk last month on interactive decision making at a Leadership and Effective Governance seminar run by George Washington University. The seminar is aimed at Latin American politicians and civil servants.

My talk covered topics such as

  • stakeholder analysis
  • game theory
  • confrontation analysis

The techniques were illustrated by examples of confrontations facing the new government of Argentina. I built an online immersive briefing describing the confrontational landscape facing President Mauricio Macri and his team.

However, given the pan-American immigration debate fueled by Donald Trump, much of this was applied work was (unsurprisingly) overshadowed by impromptu discussion and analysis of Brexit.

Kids learn to make decisions by making decisions

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Alfie Kohn is a critic of education’s fixation (in some countries) on grades and test scores.

In a 2010 article entitled “How to Create Nonreaders” he argued

When parents ask, “What did you do in school today?”, kids often respond, “Nothing.” Howard Gardner pointed out that they’re probably right, because “typically school is done to students.” This sort of enforced passivity is particularly characteristic of classrooms where students are excluded from any role in shaping the curriculum, where they’re on the receiving end of lectures and questions, assignments and assessments. One result is a conspicuous absence of critical, creative thinking—something that (irony alert!) the most controlling teachers are likely to blame on the students themselves, who are said to be irresponsible, unmotivated, apathetic, immature, and so on. But the fact is that kids learn to make good decisions by making decisions, not by following directions.

Learn by doing. It’s as true for decision-making as it is for any challenging task.

Of course, it’s not possible to practice all forms of decision-making just by making the decisions. Some decisions have big, irreversible consequences. This is why modeling and simulation are important tools in the decision-makers arsenal. Michael Schrage’s book, “Serious Play”, describes how we can generate memories of future events (scenarios) to enhance our ability to make decisions in response to complex, fast-moving situations.

Decision-making is a lifelong adventure. Improving it, as with so many skills, shouldn’t stop with school.

Divorce petitioners adapting to legal aid changes?

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divorce

Campaigners are claiming that a rise in the allegations of domestic abuse is due to recent changes in legal aid rules. Under new legislation tax payer funding is only available for divorce cases involving verbal or physical abuse.

MPs expressed concerns about creating perverse incentives when the legislation was first suggested, back in 2011.

Policy-making requires systems thinking if it’s not to end up making bad situations worse.