Decision Tips
Don’t judge alternatives prematurely.
Everything should be made as simple as possible, but not simpler.
—A. Einstein
Todd Lucci graduated from the University of Illinois in 2004. Although he majored in psychology and talked about going to graduate school and eventually pursuing a career as a therapist, his dad encouraged him to return to his hometown of Chicago and work in the family’s restaurant business. Todd’s dad and uncle own and operate six McDonald’s franchises in northern Illinois.
Upon graduation, Todd packed up and returned to Chicago. He joined the family business, bought a home, married, and now has two small children. Todd recently reflected on that decision he made ten years ago:
I guess it was almost a nondecision. My dad said come into the business, and it just seemed like the easy thing to do. I knew what I’d be getting into. I had worked for dad on weekends and summers since I was 15. I chose the known rather than the unknown.
Now, as I look back, I think of what could have been. I could have gone back to grad school. I’m sure I could have gotten scholarships and loans to cover the cost. I could have gotten a degree in counseling psychology and become a therapist. I know I would have been good at it. I often think how much more fulfilling my life might have been if I hadn’t been so quick to just accept my dad’s offer. But that was the easy thing to do. I really didn’t consider my other options.
Todd’s decision to join his family’s business after graduating from college was a major life-changing event. Unfortunately for Todd, he didn’t give it the time and thought that he should have. He made no effort to follow the rational decision making process we described in Chapter 2, “The Search for Rationality.” He chose, instead, to limit his search.
When faced with complex decisions, the evidence indicates that we are all prone to try to simplify the process by limiting our search efforts.1 Most of us respond to complexity by reducing a problem to a level at which it can be readily understood. We do this because it’s impossible for us to assimilate and understand all the information needed to optimize the decision. We don’t have the time, knowledge, and other resources assumed in the rational decision making process. So, as briefly described in Chapter 3, “Why It’s Hard to Be Rational,” we satisfice.
When faced with a complex problem, we construct a simplified model that extracts the essential features from the problem without capturing all its intricacies.
The process we use has been described as bounded rationality. When faced with a complex problem, we construct a simplified model that extracts the essential features from the problem without capturing all its intricacies.2
How does bounded rationality work for the typical individual? After a problem is identified, the search for criteria and alternatives begins, but the list of criteria is likely to be far from exhaustive. The decision maker identifies a limited list made up of the more obvious choices. These choices are easy to find and tend to be highly visible. In most cases, the choices represent familiar criteria and tried-and-true solutions. After a limited set of alternatives is identified, the decision maker reviews them. However, the review is not comprehensive. Not all the alternatives are evaluated carefully. Instead, the decision maker begins with alternatives that differ only in a relatively small degree from the choice currently in effect. Following along familiar and well-worn paths, the decision maker proceeds to review alternatives only until he or she identifies an alternative that is good enough—one that meets an acceptable level of performance. The first alternative that meets the good enough criterion ends the search. So the final solution represents a satisficing choice rather than an optimum one.
One of the more interesting features of bounded rationality is that the order in which alternatives are considered becomes critical. In the fully rational decision process, all alternatives are eventually listed in order of preference. Because all alternatives are considered, the initial order in which they are evaluated is irrelevant. That is, every potential solution gets a full and complete evaluation. But this isn’t the case with bounded rationality. If a problem has more than one potential solution, the satisficing choice is the first acceptable one the decision maker encounters. And because decision makers use a simple and limited search procedure, they typically begin by identifying alternatives that are obvious, ones with which they are familiar, and those not too far from the status quo. Those solutions that depart least from the status quo and meet the decision criteria are most likely to be selected. So a unique and creative alternative may present an optimizing solution to the problem, but it’s unlikely to be chosen because an acceptable solution will be identified well before the decision maker is required to search very far beyond the status quo.
Following bounded rationality, we can make several predictions. We simplify complex decisions by reducing the number of criteria and options, and we terminate the process as soon as we identify an alternative that is good enough. In addition, we aren’t likely to develop alternatives that are much different than the status quo because we look at alternatives sequentially, begin with those that are least different, and are likely to find a satisficing choice before we have to come up with truly innovative options.
Another insight related to limited search is that, early in the decision process, many of us pare down the number of alternatives we’re willing to consider.3 Rather than develop an exhaustive list of alternatives and devote energy into assessing each, we early on reduce the set of viable alternatives to a manageable number—often just one or two. We do this by asking ourselves whether an alternative meets one of three tests: Is it compatible with my basic principles or values? Is it compatible with my goals? Is it compatible with my plans for achieving those goals? If an alternative doesn’t pass these three tests, we screen it out. This line of research is consistent with satisficing and confirms that decision making is rarely as comprehensive as the rational process would suggest. Additionally, it tells us that the limiting process is severe—often reducing the number of viable alternatives to one or two; that this paring is done early in the decision process rather than later; and that we apply three tests of compatibility with our values, goals, and plans—to arrive at our reduced set.
We’re all susceptible to the limited-search error. That doesn’t mean, however, that we can’t overtly take steps to try to reduce it. That effort can begin by keeping an open mind. Don’t judge alternatives prematurely. Be aware of our tendency, especially with complex problems, to simplify them and speed up the search for a solution. Take the time to increase your options. Even if an obvious alternative looks perfect, resist your tendency to quickly choose it and conclude the process. Keep searching to expand your set of alternatives. Finally, be creative in your search for alternatives. In addition to the obvious, look “outside the box” to consider strange, unconventional, and previously untried options. The more alternatives you can generate, and the more diverse those alternatives, the greater your chance of finding an outstanding one.
Don’t judge alternatives prematurely.
Increase your options.
Look “outside the box” for nonobvious alternatives.