Decision Making: Factors that Influence Decision Making, Heuristics Used, and Decision Outcomes
Sagi and Friedland (2007) theorized people feel regret in accordance with how the decision was made; regret may be dependent on the number of options that were available during the decision making process; and how varied the options were may impact how regret is experienced after the decision was made. Through a series of experiments, Sagi and Friedland concluded that people feel remorse because they feel they were able to make a better choice by looking at more information, previously disregarded, and carefully weighing the pros and cons of each choice. In addition, regret is magnified when individuals revisit the other available options and considering what satisfaction the other option would have brought them. Interestingly, people who are dissatisfied with their decision feel obligated to embrace the decision, as a means to reducing anxiety regarding the quality of the decision (Botti & Iyengar, 2004; see also Gilbert & Ebert, 2002). For example, when a job applicant does not get hired, he may restructure the experience, and find many reasons that explain why he did not want to work for the company.
In addition to regret, individuals may also experience satisfaction with their decisions. Satisfaction refers to how pleased the decision maker is with the outcome of the decision. There are many things that impact levels of satisfaction. Botti and Iyengar (2004) observed individuals prefer to make their own decisions and believe they will be more satisfied with their choices; however, when people are given only undesirable options, decision makers are less satisfied than those who have had the choice made for them. Botti and Iyengar posited the explanation for this phenomenon is that the decision maker assumes responsibility for the decision made. As a result, if the available choices are bad, they may feel as though they are responsible for making poor choices.
Also fascinating, aside from heuristics, an important decision making strategy is evaluating positive and negative aspects of choices. Kim et al. (2008) discovered that when younger and older adults use this strategy, older adults tend to list more positive and fewer negative aspects of each choice, and older adults register more satisfaction with their choices when they use this evaluative strategy. One interesting finding was when the participants did not evaluate the options by listing the positive and negative features; there was no age difference in satisfaction (Kim et al., 2008).
As explained, future decision making is based on past decisions, as well as levels of satisfaction or regret (Abraham & Sheeran, 2003; Juliusson, Karlsson, & Garling, 2005; Sagi & Friedland, 2007). Even though there is evidence to support this notion, in many cases, particularly when the decision may be reversed, decisions may be based on the reversibility factor (Gilbert, & Ebert, 2002). Significant to individuals’ satisfaction is that people are willing to pay a premium for the opportunity to change their minds at a later date (Wood, 2001). For example, catalogue shoppers purchase items in a two step process; first they decide to purchase the items, then once the items arrive, they decide if they will keep them. Gilbert and Ebert examined if people prefer making decisions that are reversible. They concluded that people do prefer to have the option to change their minds; although people’s ability to change their minds actually inhibits their ability to be satisfied with their choice.
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.
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Keywords:Heuristics Decision Making Decision Outcomes Cognitive Decision Making Psychology Cognitive Decision-making