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30 Aug 2012

DANGER! Over Thinking Decisions

This entry is part 1 of 3 in the series Over Thinking Decisions

Once upon a time, long, long ago, when I used to take standardized tests, the recommendation was to go with your first choice if you had trouble selecting an answer. I remember times though when I drove myself into confusion simply by thinking and rethinking my answers.

Ian Leslie’s article, “Non Cogito, Ergo Sum,” (Intelligent Life, May/June 2012 edition) addresses this very point: over thinking can be dangerous and lead us to err. For instance, he writes about a group of rats outperforming college undergraduates in determining which food source offered food more frequently. The undergrads confused themselves by trying to determine an underlying pattern for each source. In reality, the patterns for both were non-existent. They were random but one produced food 60% of the time and the other only 40%.

As Gerd Gigerenzer, a psychologist from the Max Planck Institute for Human Development, told Leslie, this effect applies to much higher decisions. He found that a portfolio of stocks picked by people on the streets performed better than those chosen by experts did. Leslie writes that over thinking encourages us to “lose our bearings, as our inner chatter drowns out common sense.” That’s, as Leslie indicates, people who trust their feelings tend to make better predictions than those who don’t. This is where intuition comes into play in decision-making.

The key though is being somewhat knowledgeable about the event. In other words, we are often more knowledgeable than for which we give ourselves credit. However, training and conventional business-world thinking encourages us to seek out as much information as we can before making a decision.

Thus, our intuition can save us from the dangers of making bad decisions by over thinking. We only need to learn to trust it, as I should have long, long ago.

 

Series NavigationOver Thinking Decisions (Pt 2): Warning Signs >>

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