Discussion

Decision Making and Motivational Biases

Karen Klisch, May 2017

Information in this lecture is from: Bazerman, M. H. (2006). Judgment in managerial decision making. (6th ed.). New York, NY: Wiley & Sons, Inc.

Bazerman describes the theory of multiple-selves. Within each of us is the self that wants things "right now" and the other self that feels there are certain things that we "should do". Each of us has made some promise or commitment to our self regarding things like not eating the wrong things, being more patient with our loved ones, getting things done in a more timely manner, keeping the house neat and so on. These are the things we believe we should do. And then something keeps us from following through.

1. The bowl of chips is sitting right next to us and we want some -- regretting later that we did this.

1. We snap at our partner and wish later that we had not.

1. We put off writing the paper because a good movie comes on the TV and we feel guilty later when we have to scramble to get the paper done.

1. We sit outside on a nice day and ignore the house cleaning. All of these examples demonstrate how the "want self" can "own" us and the "should self" gets put in second place.

The want self is a perfect example of System I thinking. The should self is the System II thinking process. No matter how many promises we tend to make to ourselves regarding what we should do, the want self can reach up and grab us by the throat and take control. If we are to follow through with our should self and the promises we make in that arena, we must negotiate really well with ourselves to give ourselves the best possibility to make the should self decision successful. In other words, we must be very realistic when we decide on our behavior. If our should self decisions are simply pipe dreams, wishful thinking, -- we will very likely be sabotaged by our want self.

Motivation and self-confidence have been identified as very important qualities in many studies of leadership . However, we need to be aware of how these qualities can lead us astray in decision-making situations. Bazerman (2006) uses the term positive illusions to refer to the tendency to view ourselves, the world, and future challenges in a considerably more positive light than is fully justified, While this tendency helps us to overcome inertia and to undertake new initiatives, it also is a way of deceiving ourselves. Listed below are some ways positive illusions are expressed along with examples.

1) Positive views regarding self. Most people believe they are more honest, more conscientious, and harder working than the average person. We believe our children are above average. If most everybody thinks this way, where are all the below average people? Under the normal curve, half the population is below average to some degree. Everybody can't be above average.

2) Unrealistic optimism. When facing a challenge or a goal, we tend to focus on achieving the goal and make it sound easier than it really is. We tend not to examine all the potential problems, missteps, and delays that can occur along the way. At the outset of the project we are quite optimistic (e.g., "sure we can build the new bridge in two years;" "of course we can do it within budget"). Yet slips in the project schedule and cost overruns are quite common.

3) Illusion of control. People tend to overestimate the extent to which they can influence events over which they have little or no control. Somehow we think that our own personal involvement can influence the outcome of chance events. Many lottery players have elaborate schemes for choosing numbers when this has no bearing on the likelihood of winning.

An interesting variation on this theme is something called "wishful thinking". It is the illusion of control that makes us think things like "If I just get through this semester I will never smoke another cigarette, or please let my child recover from the accident and I will stop swearing." Or the illusion that if I never say the word cancer I will never get cancer. If I am a good girl or good boy good things will definitely happen to me.

4) Self-serving attributions. In attempting to make sense of the causes of events, people tend to take excessive credit for the role they played when the outcome is favorable. At the same time, they minimize their contribution when the outcome is unfavorable. For example, Bill was the lead technical writer on two separate proposals that he spent equal time on. One of the proposals won its competition; the other one lost. Bill was overheard explaining to a colleague that he didn't really have much to do with the losing proposal, but he really worked hard and spent a lot of time on the winning one. When it comes to inferring the causes of both successful and unsuccessful events, we tend to make self-serving attributions.

Emotional influences on decision making Some points to keep in mind when making decisions:

1. People in good moods are more optimistic and therefore more likely to go with a decision that may not be the best.

1. People in bad moods are more pessimistic and therefore more readily to consider a decision as not the best.

1. Fear and anxiety create risk averse behavior.

1. Happy moods increase reliance on stereotypes.

1. Happy moods reduce the likelihood of System II thinking.

1. Sad individuals are more likely to utilize System II thinking.

1. People feel greater regret for acts of commission (things they actually did) than for acts of omission (things they did not do).

Reducing these emotional effects on decision making

1. We must accept that our emotions can and will play a part in our decision making. We should strive to wait until our emotional state is relatively neutral before making decisions. (Easier said than done)

1. We must hold ourselves accountable for our decisions. In other words we must be able to justify our decisions. If we must explain our reasons for making a decision we are more likely to use System II thinking.

1. In any setting, home, work, --- make an attempt to institutionalize the decision making process to use logical reasoning when making decisions. Make the process the rule.

Keeping these things in mind and putting them into practice when we are dealing with making decisions, should go a long way in helping us make better decisions.