Thursday, August 05, 2021

Psychology Often Drives Decisions Rather Than Rational Thought


Comments on  Becoming Trustworthy

 After years of seeing this “irrational” behavior in managers, co-workers and consultants I realized it is usually not irrational, just hard to comprehend.

I think that the primary thing to remember is that often people's actions and decisions are guided by psychology rather than thoughtful deliberation and choosing the most sensible option (given that person's desires).  What this means is you can't expect rational decision making to guide others decisions and actions.  You are often better understanding common psychology and how that impacts decision making.

If you are intending to understand them then this is often more useful.  And if you are attempting to change behavior to improve results often you need to understand not the psychology that will help people change much more than the logic behind what is the most rational decision based on the facts in this case and the individual's desires.

There are times when you think a decision was irrational but you were mistaken.  The person does have rational reasons that were responsible for the decision they made.  Even in a case where a person has went through a rational decision making process but made an error and chose an alternative that did not result in what they imagined it would I think you can call that a rational choice. 

 But I think much more often (even for business decisions) there was no rational decision making. They may have made the choice mainly out of fear (which I would see as different than taking into account the risks and deciding that they wanted to avoid the risk even if it meant the business would suffer because they personally would avoid risk).  Or they may have just said no because they don't like change (which again is different than choosing to say no because the costs of change when rationally weighed against the possible benefits are not worth it).  Etc. There is a big difference I think in believing people are making rational choice and believing that most often people do not do so, they are guiding by unconscious decision making factors that they don't understand and did not evaluate in coming to the decision they did).  

There are 2 reasons this is important: first you are likely making decisions this way and can improve your decision making by understanding how you are making decisions.  And second if you are trying to influence others understanding how they make decisions is important.

Thinking about these, and related ideas, is valuable.  Even when people disagree I think this is a valuable process.

I have several related blog posts
  Customers Are Often Irrational
  Design the Management System with an Appreciation of Confirmation Bias
  The Importance of Critical Thinking and Challenging Assumptions  

Stated Versus Revealed Preference  

Packaging Affects Our Perception of Taste

 Ignoring Unpleasant Truths is Often Encouraged


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