Ep 226: Making Better Decisions

Decision-making expert Eric J Johnson, author of The Elements of
Choice, joins us to discuss how our choices are often influenced
by external forces without our knowledge. He also describes
different kinds of decision-making and explains how memory
affects our choices.


Sponsored by Equip: Eating disorder treatment
that works—delivered at home. Visit equip.health/talking for more
information, and a free consultation.


Full show notes





We make thousands of choices every day–what to eat, what to wear,
which email to send first, even how much creamer to put in our
coffee. It might seem like we’re making these choices of our own
accord, but we often don't realize how many forces are
influencing each and every choice we make. Everything from
corporate marketing to peer influence can shape our decisions in
profound and surprising ways!





This is especially true for teenagers, who are making some early
and important decisions like where to go to college or what
career to commit to. If we want teens to make smart choices,
we’ll have to teach them to spot all the ways their decisions are
being influenced by those around them.





To help us understand how external forces affect our
decision-making process, we’re talking to Eric J. Johnson, author
of The Elements of Choice: Why the Way We Decide Matters. Eric is
a Professor of Business and Director of the Center of Decision
Studies at Columbia Business School. He’s also the President of
the Society for Judgment and Decision Making and The Society for
Neuroeconomics at Columbia! An expert on the science of
decision-making, Eric is here to help us understand the nuanced
influences that affect every choice we make.





In our interview, we’re discussing the different kinds of
decision-making and their advantages. We also break down the way
external factors influence our choices, and the significance of
memory in our decision-making.


Why do we each make unique choices, and what are the
consequences? These are just a few of the questions Eric asks in
his research as he attempts to learn more about the
decision-making process. In our interview, he lays out two common
types of analysis: integrative and comparative.





Integrative decision-makers take in the whole picture, ingesting
and evaluating all the details and analyzing every bit of
information. In contrast, comparative thinkers tend to look at
the most essential component of each choice, and make a decision
based on that comparison. 





To help us understand, Eric describes an experiment in which
participants were offered forty dollars immediately or fifty
dollars if they could wait a while. Integrative thinkers might
measure the availability of the forty dollars over the time spent
waiting for the extra ten, and choose to walk away with forty.
Comparative thinkers may simply see the dollar amounts and pick
the higher one, he says, waiting for the fifty.





How does this play out for teenagers? Eric explains that these
are common methods of decision-making when it comes to choosing a
college. Some teens might use integrative reasoning to evaluate
the whole experience–student body size, campus environment,
quality of facilities–while comparative thinkers might just
compare the stats of the school’s post-grad employment rates or
cost of attendance. If you want your teen to think one way or the
other, it might be best to push them in the direction of
integrative or comparative thinking.





These choices aren't made in a vacuum, however, and there are
plenty of influences on our decisions. Eric and I are breaking
down the many ways our choices are manipulated, often without our
own knowledge.



Who Controls Our Choices?


Although we might not realize it, we’re often swayed in our
decision-making by those who are presenting us with choices.
Oftentimes, they make certain choices easier or more
straightforward than others, leading us to choose that option to
save time and energy. Eric uses the example of an autofilled box
on an online form. If the box is already checked, we often don’t
even bother to read what we’re agreeing to. The same goes for
things like medical forms or advertisements.





For teens looking to choose a college, there are quite a few
forces influencing their decision. Eric and I talk at length
about how parents, peers, pop culture and colleges themselves all
exert influence over how kids pick which school to attend. If
kids simply hear about certain colleges more often, they’re
likely to apply to those schools…even if they aren’t really the
best option for your teens' particular life plans. This is
especially true for students who come from lower income
backgrounds, and simply aren’t encouraged to explore pricier or
high-ranking schools quite so often.





Additionally, about 50% of U.S. students also have to pick a high
school, especially in New York City, Eric explains. In NYC,
students are forced to pick from thousands of schools within the
city to find the right fit. Eric explains how this demonstrates a
common conundrum in decision-making. To make the right choice,
the chooser can’t be overwhelmed with too many options, but they
need enough options to make sure they pick something that’s the
right fit. This means the pool of choices needs to be manageably
small–but not too small! In the episode, Eric explains how this
issue is solved for New York City High Scholers and beyond in the
episode.





There are a few other things that affect our decisions–including
memory. Eric explains all the ways memory changes the way we make
choices.



Why Memory Matters





Eric illustrates the significance of memory in our
decision-making by telling a story about Ben Franklin. When Ben
was approached by a friend and asked how to make a decision, Ben
advised his friend to weigh the pros and the cons of each
choice–but to do so over a day or two instead of in a single
moment. 





If we write a list in ten minutes, our brains are likely
suppressing one choice in favor of the other. If  we give
our brain time to remember all the details, we can make a better
choice…instead of one based on what we remember at the current
moment. In the episode, Eric and I talk about how teens can
practice this method in their daily lives.





You might notice the phenomenon of memory play out when you’re
reading a list of options on a menu or guide. Whichever option is
first typically takes root in your memory, with the others fading
into obscurity in your mind as they go on. This is commonly seen
in elections, Eric explains, where whomenever is first on the
ballot typically wins. 





The order of options affects our choices in other ways as well.
If a menu is listed by price, we take notice of the prices and
make our decision that way. If something like wine is instead
listed by quality, we might choose quality over costliness. 





In the end, our choices are manipulated by plenty of different
forces. But by educating ourselves and our families on the
science of decision-making, we can learn to gain control over our
decisions and make the choices that are truly best for us.





In the Episode…


Chatting with Eric was both fun and enlightening! On top of the
topics discussed above, we also talk about:


How we can encourage teens to invest

Why infor...