Last year, Wired Editor and The Frontal Cortex blogger Jonah Lehrer published an examination of human decision-making unambiguously titled How We Decide. How We Decide strikes a familiar tone, joining the host of bestsellers about decision-making, consumer psychology and behavioral economics published in the past decade. Lehrer covers topics undoubtedly recognizable to his readers, such as loss aversion and the marshmallow predictor of success in 4-year-olds. However, Lehrer also incorporates a wealth of behavioral studies that reflect an impressive depth of research and knowledge of the field: one compelling study reveals rats learning more quickly and accurately than Yale students where food is placed in a maze, and supports that “overthinking” actually represents a uniquely human impediment.
Where Lehrer’s work sets itself apart from his predecessors is through his efforts to connect decision-making not just to psychology, but to its roots in the physical brain itself. Lehrer dissects and illuminates the areas of the brain that operate sometimes as a symphony, sometimes as a cacophony in order to make the decisions that guide our lives. The result lends How We Decide a biophysical bent, as Lehrer describes not just the decisions resulting from psychology studies, but also the areas of the brain that were illuminated during the study on an MRI machine. Lehrer concludes his book by offering useful guidelines to improve decision-making: use reason for simple and novel problems, embrace uncertainty, trust your own knowledge and think about thinking.
After reading How We Decide, we’ve taken Lehrer’s conclusions a step further, and distilled them into practical recommendations for improving your purchasing choices. We’ve included page numbers, so you can visit the topics covered for yourself.
Due to the anchoring effect, whatever you think about a product is going to be altered the instant you start seeing products and the marketing messages that surround them (pg 157). As the study Lehrer discusses shows, students who were asked to write down the last two digits of their social security number before offering money for a computer keyboard were significantly influenced by the digits they wrote down — students with a higher final number were willing to pay as much as 3x as students with lower numbers, even though the digits were essentially random! For this reason, your expectations for a product will be anchored in the first products you see, whether or not the product is worth it to you.
Thus, if you’re shopping for an item, you can get around this fallacy by instead anchoring your expectations in your own assessment of a product’s worth. Write down how much you think a product is worth to you, without looking at any prices at all. Additionally, defend your brain against marketing by writing down the key reasons you want the product and what you hope to get out of it. Then, when you finally see the products and their specs, you can quickly identify whether the product can deliver what you want, and not just whether its marketing messages are persuasive.
2. Don’t try to remember every spec and detail — you’ll waste time and end up less satisfied with your decision.
The human brain is wired for efficiency, not omniscience, and when humans have too much to remember, other priorities fall off the plate. Lehrer describes a study in which students were asked to remember either two or seven digits, and then while walking down a hallway to the next portion of the experiment, were offered a snack of either fruit salad or german chocolate cake. Remarkably, 59% of students who were asked to remember seven numbers chose the chocolate cake over the fruit salad, whereas only 37% of students who needed to remember two chose cake (pg 151). The conclusion of the study was that the students who had more to remember de-prioritized thinking about health considerations when choosing snacks.
You can apply this knowledge while shopping by keeping your top priorities in mind while picking complex products. For the same reason that active investors on average do 10% worse than investors who don’t trade and sell often (pg. 70), and students who had a myriad of information about companies made poorer investments than students who only had information about a company’s past performance (pg 159), the human brain isn’t capable of cross-comparing every single spec for every product. If you try, you’ll “overthink” the decision and make less beneficial choices, as the Yale students did in the test that allowed the rats to outperform them finding food in a maze (pg 65). Conversely, for very simple products (like kitchen utensils) that only posses a few important dimensions, the human brain can make a reasoned assessment of the costs and benefits fairly simply. For most products, however, the number of dimensions for you to consider will far exceed the number your brain can handle. Once you’ve started your research, rely on product search engines like Pikimal to help you search and narrow according to all of the specs. Computers can help you find the products you want by giving you a way to access and manipulate product databases, allowing you to sort and filter based upon the specs and your desires.
3. When the time comes to make the final decision, use your instincts. Don’t rationalize!
After you’ve gone shopping, looked at all the products and evaluated your options against your priorities, its time to trust your gut. As Lehrer says, “our emotions are deeply empirical” (pg. 41). Your brain has been taking in all of the information you fed it while shopping and built up instincts about products while you were learning about them. In one example, participants in a study developed “feelings” about companies on a stock index just by looking at data about how they performed, and even though the participants couldn’t recite any of the data after the study, the feelings nonetheless accurately reflected how the company had performed.
A second study that Lehrer discusses demonstrates that unless you’re an expert about a product, trying to rationalize the final decision is misleading. If you attempt to rationalize why you like a product, doing so will actually confuse your preferences and lead you to make decisions you are less happy with in the long run. The study reflects that students who chose jams and fine art based on instinct made choices similar to expert ratings. However, when the participants were asked why they liked the item, they ended up changing their ratings based on their new descriptions, and they ultimately made choices they liked less in the long run. A final takeaway from these studies is that if you’re already an expert in a product, always trust your instincts.
The ultimate takeaway from How We Decide is, more than anything, brain science is becoming more and more usable in everyday life. We can start by applying the studies covered in How We Decide to everyday shopping decisions, and by understanding how our brains work, we can tailor our environments to make them conducive to how we think. We at Pikimal are anticipating Jonah Lehrer’s next opus!