Decision Making: Factors that Influence Decision Making, Heuristics Used, and Decision Outcomes
An Innovative Decision Making Approach
Decision making is a critical aspect to feeling successful and happy in life; decision making is at the root of all we do. It is important to develop effective decision making skills and strategies. Problem solving strategies include, but are not limited to brain storming, cost benefit analysis, written remediation plans, and an examination of possible choices (Wester, Christianson, Fouad, & Santiago-Rivera, 2008). The decision making process can be complicated and overwhelming. As a result, it is valuable for individuals to learn a model to follow, that may be applied to everyday decisions, as well as life changing choices.
Krantz and Kunreuther (2007) posited that a goal and plan based decision making model is an effective and sound approach to take in decision making; in this model, the individual is encouraged to focus on goals, not happiness or usefulness. According to Krantz and Kunreuther, plans are designed to meet one or more goals. That is, people make plans to unconsciously or consciously meet the goals they have. And, some plans satisfy several goals. For example, people who attend a sporting event with a friend may be satisfying several goals; friendship and camaraderie, emotional stimulation from competitive sport, and potentially useful social knowledge gained from watching the game. In this model, goals are context dependent and plans are based on their ability to meet the goals. Essentially, in the goal/plan based model, the context provides the backdrop for the decision that needs to be made; goals and resources, influenced by the context, contribute to the development of plausible plans; while the decision making rules are implemented and influence the plan that is ultimately chosen. Krantz and Kunreuther apply this theory to the insurance business, but imply the theory may be appropriately applied to a variety of contexts.
Decision making is an important area of research in cognitive psychology. Understanding the process by which individuals make decisions is important to understanding the decisions they make. There are several factors that influence decision making. Those factors are past experiences, cognitive biases, age and individual differences, belief in personal relevance, and an escalation of commitment. Heuristics are mental short cuts that take some of the cognitive load off decision makers. There are many kinds of heuristics, but three are important and commonly used; representative, availability, and anchoring-and-adjustment. After an individual makes a decision, there are several differing outcomes, including regret and satisfaction. Decisions that are reversible are more desired and people are willing to pay a premium for the ability to reverse decisions; though reversibility may not lead to positive or satisfactory outcomes. Cognitive psychologists have developed many decision making models, which explain the process by which people effectively make decisions. One innovative model is based on goals and planning. There is yet a lot of research to be conducted on decision making, which will enable psychologists and educators to positively influence the lives of many.
Abraham, C., & Sheeran, P. (2003). Acting on intentions: The role of anticipated regret. British Journal of Social Psychology, 42, 495-511.
Acevedo, M., & Krueger, JI. (2004). Two egocentric sources of the decision to vote: The voter’s illusion and the belief in personal relevance. Political Psychology, 25(1), 115-134. DOI: 10.1111/j.1467-9221.2004.00359.x.
Botti, S., & Iyengar, S.S. (2004). The psychological pleasure and pain of choosing: When people prefer choosing at the cost of subsequent outcome satisfaction. Journal of Personality and Social Psychology, 87(3), 312-326. DOI: 10.1037/0022-35220.127.116.112.
de Bruin, W.B., Parker, A.M., & Fischhoff, B. (2007). Individual differences in adult decision-making competence. Journal of Personality and Social Psychology, 92(5), 938-956. DOI: 10.1037/0022-3518.104.22.1688.
Epley, N., & Gilovich, T. (2006). The anchoring-and-adjustment heuristic. Psychological Science, 17(4), 311-318. DOI: 10.1111/j.1467-9280.2006.01704.x.
Evans, J.ST., Barston, J.L., & Pollard, P. (1983). On the conflict between logic and belief in syllogistic reasoning. Memory & Cognition, 11(3), 295-306.
Finucane, M.L., Mertz, C.K., Slovic, P. & Schmidt, E.S. (2005). Task complexity and older adults’ decision-making competence. Psychology and Aging, 20(1), 71-84. DOI: 10.1037/0882-7922.214.171.124.
Gilbert, D.T., & Ebert, J.E.J. (2002). Decisions and revisions: The affective forecasting of changeable outcomes. Journal of Personality and Social Psychology, 82(4), 503-514. DOI: 10.1037/0022-35126.96.36.1993.
Goldstein, D.G., & Gigerenzer, G. (2002). Models of ecological rationality: The recognition heuristic. Psychological Review, 109(1), 75-90. DOI: 10.1037/0033-295X.109.1.75.
Hilbig, B.E., & Pohl, R.F. (2008). Recognition users of the recognition heuristic. Experimental Psychology, 55(6), 394-401. DOI: 10.1027/1618-3188.8.131.524.
Jullisson, E.A., Karlsson, N., Garling, T. (2005). Weighing the past and the future in decision making. European Journal of Cognitive Psychology, 17(4), 561-575. DOI: 10.1080/09541440440000159.
Kim, S., Healy, K., Goldstein, D., Hasher, L., & Wiprzycka, U.J. (2008). Age differences in choice satisfaction: A positivity effect in decision making. Psychology and Aging, 23(1), 33-38. DOI: 10.1037/0882-79184.108.40.206.
Krantz, D.H., & Kunreuther, H.C. (2007). Goals and plans in decision making. Judgment and Decision Making, 2(3), 137-168.
Marsh, D.M., & Hanlon, T.J. (2007). Seeing what we want to see: Confirmation biases in animal behavior research. Ethology, 113(11), 1089-1098. DOI: 10.1111/j.1439-0310.2007.01406.x.
McKelvie, S.J. (2000). Quantifying the availability heuristic with famous names. North American Journal of Psychology, 2(2), 347-357.
Nestler, S. & von Collani, G. (2008). Hindsight bias, conjunctive explanations and causal attribution. Social Cognition, 26(4), 482-493.
Nokes, J.D., Dole, J.A., & Hacker, D.J. (2007). Teaching high school students to use heuristics while reading historical texts. Journal of Educational Psychology, 99(3), 492-504. DOI: 10.1037/0022-06220.127.116.112.
Pachur, T, & Hertwig, R. (2006). On the psychology of the recognition heuristic: Retrieval primacy as a key determinant of its use. Journal of Experimental Psychology, Learning, Memory, and Cognition, 32(5), 983-1002. DOI: 10.1037/0278-7318.104.22.1683.
Redelmeier, D.A. (2005). The cognitive psychology of missed diagnosis. Annals of Internal Medicine, 142(2), 115-120.
Reed, A.E., Mikels, J.A., & Simon, K.I. (2008). Older adults prefer less choice than young adults. Psychology and Aging, 23(3), 671-675. DOI: 10.1037/a0012772.
Sagi, A., & Friedland, N. (2007). The cost of richness: The effect of the size and diversity of decision sets on post-decision regret. Journal of Personality and Social Psychology, 93(4), 515-524. DOI: 10.1037/0022-3522.214.171.1245.
Shah, A.K., & Oppenheimer, D.M. (2008).Heuristics made easy: An effort-reduction framework. Psychological Bulletin, 134(2), 207-222. DOI: 1.1037/0033-2909.134.2.207.
Stanovich, K.E., & West, R.F. (2008). On the relative independence of thinking biases and cognitive ability. Journal of Personality and Social Psychology, 94(4), 672-695. DOI: 10.1037/0022-35126.96.36.1992.
West, R.F., Toplak, M.E., & Stanovich, K.E. (2008). Heuristics and biases as measures of critical thinking: Associations with cognitive ability and thinking dispositions. Journal of Educational Psychology, 100(4), 930-941. DOI: 10.1037/a0012842.
Wester, S.R., Christianson, H.F., Fouad, N.A., Santiago-Rivera, A.L. (2008). Information processing as problem solving: A collaborative approach to dealing with students exhibiting insufficient competence. Training and Education in Professional Psychology, 2(4), 193-201. DOI: 10.1037/1931-39188.8.131.52.
Wood, S.L. (2001). Remote purchase environments: The influence of return policy leniency on two-stage decision process. Journal of Marketing Research, 38(2), 157-169.