Backing the Wrong Horse: How to Make Better Decisions and Why They Are So Important

Pigeons are quite like us. And I am not talking about sleep problems or insomnia, obvious in those very ubiquitous pigeons at your local train station. I am referring to our shared love of risk-taking. Pigeons, it turns out, are quite the gamblers.

An experiment, published in 2010, gave pigeons two options. They could peck at a lever to get a consistent amount of food each time the lever was pressed. Or they could press a second lever, which also rewarded them with food, but inconsistently: sometimes, a large quantity of bird food appeared, and sometimes none. You’d think the pigeons would go for the first lever with consistent returns on lever peck, but no, they preferred the second one. They clearly didn’t mind getting nothing as long as there was a chance of striking it big.

Pigeons, Rats and Monkeys Like to Risk a Gamble

This behavior is not restricted to pigeons. Studies in rats and monkeys reveal an overwhelming preference for taking a gamble. While it is quite comical that us earthly creatures can’t resist a wager, this behavior has implications for decision-making abilities. Professional poker player Annie Duke believes that reframing every decision as a bet helps weigh pros and cons effectively. Moreover, framing decisions as bets enables us to acknowledge uncertainty and focus on expected values.

Our decisions affect us and our lives and so a coherent decision-making process stands to benefit us. Aside from the personal gains though, improved decision-making can impact societal systems. Sunstein, Economics Laureate Kahneman, and Sibony illustrate several instances of flawed decision making across different systems and highlighted how society as a whole would be better off if we systematically codified decision-making. For example, inter-person variability in sentencing means that the same crime may be judged harshly or leniently depending on the judge.

Health outcomes may differ as physicians interpret symptoms differently and even respond to the urgency of a clinical situation in varied ways. This luck of the draw is not restricted to judicial or healthcare systems, albeit they are the more important ones affecting life and death. Hiring decisions, business processes and even teaching suffers from variability in decision making or noise.

A solution to reducing this variability includes polling. Pooling decisions from a large number of people leads to better decisions. However, one must ensure that the people polled represent a diverse group or we risk falling into an echo chamber. Another solution is to create systematic processes and checklists for making decisions.

How to Ensure Effective Decision Making?

Decision-making frameworks also reduce intra-person variability: a phenomenon where the same person makes a different decision when confronted with the same problem. Such within-person variability, more commonly known as fickleness, could be attributed to poor weather, a disagreeable mood, past experiences or pure randomness. Decision-making guidelines can stem such issues.

The cognitive cost of making thorough, analytic, and rational decisions, without resorting to shortcuts or heuristics, is large. So how do we ensure effective decision making when our brains prefer falling back on biases or shortcuts? The answer may lie in humor. Studies show that engaging in humorous activities or consuming humorous content regulates emotions, improves risk-taking behaviors, enhances creativity, and affects the quality of our decisions.

If the secret to enhanced decision making capability is a sense of humor, then we need to focus on bringing humor into our everyday decision-making situations. As I did this morning, when I had an important decision to make (something around how many more coffees I could consume before endangering my coworkers). I asked ChatGPT to tell me a joke and it came up with this gem:

What’s the difference between birds and humans?

Only birds can afford to make a ‘deposit’ on a BMW.

That’s it. From now on, I’ll be delegating all decision making to AI.