Ever wonder how people make decisions? Have you ever thought, maybe while watching the news, or while you were driving, or even sitting at a sporting event, why did that person do that? I know I have many times thought to myself “wow that was a bad decision.” As they say, hindsight is 20/20. Yes, people are not able to predict the future, so of course their decisions aren’t going to be the best.
To be honest I never really thought to much about what goes into decision making. It wasn’t until I saw an interview between Malcom Gladwell and Michael Lewis on the NY show 92Y1that my curiosity was piqued.
The description of the show is as follows:
“Bestselling author Michael Lewis examines how a Nobel Prize-winning theory of the mind altered our perception of reality in his new book The Undoing Project: A Friendship that Changed Our Minds. Forty years ago, Israeli psychologists Daniel Kahneman and Amos Tversky wrote a series of breathtakingly original studies undoing our assumptions about the decision-making process. Their work created the field of behavioral economics and revolutionized everything from Big Data studies to government regulation.”
I found the interview fascinating, and I was intrigued by Michael Lewis’ book so the next day I checked it out from my local library. I am not going to give away the story and this is not a book review, but I will focus on the main theory, people make decisions based on the information that is readily available to them, usually through memory recall, at the time they need to decide. As one would guess, these types of decisions are not always the best decisions.
If these aren’t the best decisions, then why do we keep making them this way? Work that Daniel Kahneman and Amos Tversky had done on human judgement led Kahneman to hypothesize that “crucial decisions are made, today as thousands of years ago, in terms of the intuitive guesses and preferences of a few men in positions of authority.”2
So how can we break that bad habit or at least for important decisions give ourselves a chance at making better decisions? This is where Coegilcomes in to play, helping people make better decisions. Giving people the opportunity to collect and analyze more data, more opinions, and more insights in order to help them make the best decisions possible.
1- http://92yondemand.org/michael-lewis-malcolm-gladwell-undoing-project
2- Michael Lewis, The Undoing Project: A Friendship that Changed the World
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