There are important lessons to be learned from research, some them not so obvious, and others even counterintuitive…
- We would be better off if we embraced certain voluntary constraints on our freedom, instead of rebelling against them.
- We would be better off seeking what was ‘good enough’ instead of seeking the best.
- We would be better off if we lowered our expectations about the results of decisions.
- We would be better off if the decisions we made were nonreversible
- We would be better off if we paid less attention to what others around us were doing. P5
A typical supermarket carries more than 30,000 items… and 20,000 new products hit the shelves every year, almost all of them doomed to failure… Supermarkets are unusual repositories for nondurable goods… so buying the wrong brand of cookies doesn’t have significant emotional or financial consequences. But in most other settings, people are out to buy things that cost more money, and as the number of options increases, the psychological stakes rise accordingly. P12
If we’re rational, added options can only make us better off as a society. Those of us who care will benefit, and those of us who don’t care can always ignore the added options. This view seems logically compelling; but empirically it isnt’ true. [Proof that humans are not economically rational.]
When given a free tasting of jam [at the San Mateo Draegers of all places], those given a choice of only 6 flavors ended up choosing to purchase a jam much more often than those who were given a choice of 24 flavors. 30% of people of exposed to the small array of jams actually bought a jar; only 3% of those exposed to the large array of jams did so. P20
Students were asked to evaluate a variety of gourment chocolates, and asked which they would choose for themselves. After the tasting they were offered a box of their favorite chocolates in lieu of cash. Those who only tasted among 6 different chocolates were 400% more likely to choose the chocolates compared to those students who chose among 30 different chocolates. P20
Why can’t people ignore some of the options and treat a 30 option array as if it were a 6 option array? We have a tendency to look around at what others are doing and use them as a standard of comparison. We also suffer from the ‘tyranny of small decisions’; it seems easy to add just one more item to the array. Most important is that people won’t ignore alternatives if they don’t realize that too many alternatives can create a problem. P21
Ask yourself what is the point of advertising prescription drugs? We can’t just go to the drugstore and buy them. The doctor must prescribe them. Clearly the drug companies hope and expect that we will notice their products and demand that our doctors write the prescriptions. The doctors are now merely instruments for the execution of our decisions. P33
The average 32 year old American has already worked for 9 different companies. P35
People who do their grocery shopping once a week succumb to the same erroneous prediction. Instead of buying several packages of their favorite X or Y, they buy a variety of Xs and Ys, failing to predict accurately that when the times comes to eat X or Y, they would almost certainly prefer their favorite. When people are asked to go shopping one day at time to purchase 1 item in each category, they tend to buy the same thing over and over again [their favorite]. When asked to buy 3 or more days worth of food, they made more varied selections, predicting inaccurately that they would want something different on day 2 from what they had eaten on day one. P52
We probably like to think that we are too smart to be seduced by branding, but we aren’t… Studies have demonstrated that familiarity breeds liking. If you play snippets of music for people or show them slides of paintings and vary the number of times they hear or see the music and the art, people will rate the familiar things more positively than the unfamiliar ones… Nonetheless, when products are essentially equivalent, people go with what’s familiar, even if it is only familiar from advertising. P54
Unfortunately, people give substantial weight to anecdotal evidence, perhaps so much so that it will cancel out positive recommendations based upon 1000s of cases that are communicated by a trusted source as Consumer Reports. Most of us give weight to these kinds of stories, because they are extremely vivid and based upon on a personal, detailed face to face account. P57
When college students who are deciding what courses to take next semester are presented with summaries of course evals from several 100 students that point in one direction, and a videotaped interview with a single student that points in the other direction, they are more influenced by the vivid interview than by the summary judgements of hundreds. P58
One high end catalog seller of mostly kitchen equipment offered a bread maker for $279. Some time later, the catalog began to offer a larger capacity, deluxe version for $429. They didn’t sell too many of these expensive bread makers, but sales of the less expensive one almost doubled! With expensive bread maker serving as an anchor, the $279 machine had become a bargain. P62
The effects of framing:You’re a doctor working in an asian village with 600 sick people. Treatment A will save exactly 200 people. Treatment B has a 1/3 chance of saving all 600, but 2/3 chance that all will die. Which do you chose A or B? The vast majority choose A. They prefer saving definite number. Now consider the following. Same scenario, but if you choose Treatment C – 400 people will die. If you choose Treatment D, there is a 1/3 that no one will die, and a 2/3 chance that everyone will die. Which treatment will you choose now? Now the overwhelming majority choose treatment D. They would rather risk losing everyone than settle for the death of 400. p65
Think about this question: Would you rather have a sure $100 or have me flip a coin and give you $200 if it comes up heads, and nothing if it comes up tails? Most people go for the sure $100… Why? You won’t feel twice as good with $200 in your pocket instead of $100, but you’ll feel much, much better with $100 in your pocket instead of $0. To make the gamble psychologically worthwhile to you, I’d have to offer you something like $240…Now suppose I ask you this: Would you rather lose $100 for sure, or have me flip a coin and if head you lose $200, and tails you lose nothing? Now you are willing to take the risk. Losing the first $100 hurts worse than losing the second $100. So although losing $200 may be twice as bad objectively, it is not twice as bad subjectively. What that means is taking risk to perhaps avoid losing anything is a pretty good deal. People embrace risk in the domain of potential losses. P70
If you’re a satisficer, the number of avialable options need not have a significant impact on your decision making. When you examine an object and it’s good enough to meet your standards, you look no further; thus, the countless other available choices become irrelevant. But if you’re a maximizer, every option has the potential to snare you into endless tangles of anxiety, regret and 2nd guessing. P85
People with high maximization scores experienced less satifaction with life, were less happy, were less optimistic, and were more depressed than people with low maximization scores… What these studies show is that being a maximizer is correlated with being unhappy. They don’t show that being a maximizer causes unhappiness… Nonetheless, I believe that being a maximizer does play a causal role in people’s unhappiness, and I believe that learning how to satisfice is an important step not only in coping with a world of choice but in simply enjoying life. P86
A real maximizer would figure in the costs in time and money and stress of gathering and assessing information. An exhaustive search of the possibilities, which entails enormous information costs is not the way to maximize one’s investment. The true maximizer would determine just how much information seeking was the amount needed to lead to a very good decision. The maximizer would figure out when the information seeking had reached the point of diminishing returns. And at that point, the maximizer would stop the search and choose the best option. P89
The more affluent a society becomes, and the more basic material needs are met, the more people care about goods that are inherently scarce. And if you’re in competition for inherently scarce goods, good enough is never good enough; only the best will do. P95
Those who value freedom of choice and movement will tend to stay away from entangling relationships; those who value stability and loyalty will seek them. P112
According to std economic assumptions, the only opportunity costs that should figure into a decision are the ones associated with the next best alternative… Don’t waste your energy feeling bad about having passed up an option further down the list [than the next best alternative]. P121
Being forced to confront trade offs in making decisions makes people unhappy and indecisive [remember the jam and chocolate examples?] p125
For most of human history, people were not really faced with an array of choices and opportunity costs. Instead people asked themselves ‘Should I take this or leave it?’. In a world of scarcity, opportunities don’t present themselves in bunches, and the decisions people face are between approach and avoidance. But distinguishing between good and bad is far simpler matter than distinguishing from good, better, best. After millions of years of survival based upon on simple distinctions, it may simply be that we are biologically unprepared for the number of choices we face in the moder world. P143
When asked about what the regret most in the last 6 months, people tend to identify actions that didn’t meet expectations. But when asked what they regret most when the look back on their lives as a whole, people tend to identify failures to act. P149
When they examine the actual content of counterfactual thinking [why you think of what might have been instead of what actually happened], researchers find that individuals tend to focus on aspects of a situation that are under their control. When asked to imagine an auto accident that involves someone who is speeding while driving on a rainy day with poor visibility, respondents are much more likely to undo the accident by having the driver be more cautious than by having the day be clear. P153
There is an important lesson to be taken from this research on counterfactual thinking, and it’s not that we should stop doing it; counterfactual thinking is a powerful intellectual tool. The lesson is that we should try to do more downward counterfactual thinking. While upward counterfactual [imagined states that are better than what happened] thinking may inspire us to do better the next time, downward counterfactual [imagined states that are worse than what happened] thinking may induce us to be grateful for how well we did this time. The right balance of upward and downward may enable us to avoid spiraling into a state of misery while at the same time inspiring us to improve our performance. P154
The 2 factors affecting regret are:
1. Personal responsibility for the result
2. How easily an individual can imagine a counterfactual better alternative p162
The availability of choice exacerbates both of these factors. When there are no options, what can you do? Disappointment maybe, regret no. When you have only a few options, you do the best you can, but the world may simply not allow you to do as well as you would like. When there are many options, the chance increase that there is a really good one out there, and you feel that you ought to be able to find it. When the option you actually settle on proves disappointing, you regret not having chosen more wisely. And as the number of options continues to proliferate, making an exhaustive investigation of the possibilities impossible, concern that there may be a better option out there may induce you to anticipate the regret you will feel later on, when the option is discovered, and thus prevent you from making a decision at all [analysis paralysis indeed!]p163
It should also be clear that the problem of regret will loom larger for maximizers than for satisficers. No matter how good something is, if a maximizer discovers something better, he’ll regret having failed to choose it. Perfection is the only weapon against regret, and endless, paralyzing consideration of the alternatives is the only way to achieve perfection. For a satisficer, the stakes are lower. The possibility of regret doesn’t loom as large, and perfection is unnecessary. P164
Some people simply give up the chase and stop valuing pleasure derived from things. Most are driven instead to pursue novelty, to seek out new commodities and experiences whose pleasure potential has not been dissipated by repeated exposure. In time, these new commodities also will lose their intensity, but people still get caught up in the chase, a process labeled the hedonic treadmill. No matter how fast you run on this machine, you still don’t get anywhere. And because of adaptation, no matter how good your choices and how pleasurable your results, you still end up back where you started in terms of subjective experience. P172
In a study of midwestern college students, they judged that students in California were happier with the climate and more satisfied with life as a whole than Midwesterners. They were right about the first point, but not about the second… Just because its sunny and warm in California doesn’t mean that students who live in California don’t have problems… It may be marginally more pleasant to be stressed and hassled on a warm sunny day than on a freezing, snowy one, but not enough to make much of a difference in your outlook on life. P174
If the decision provides substantial satifaction for a long time after it is made, the costs of making it recede into insignificance. But if the decision provides satisfaction for only a short time, those costs loom large. [Beware of adaptation] If you really enjoy the stereo for 15 years, then the 4 months of deciding what to buy isn’t so bad. But if you end up being excited for only 6 months, you may feel like a fool. P177
Individuals who regularly experience and express gratitude are physically healthier, more optimistic about the future, and feel better about their lives than those who do not. They are more alert, enthusiastic, and energetic than those who do not, and they are more likely to achieve personal goals. And unlike adaptation, the experience of gratitude is something we can affect directly. P181
We probably can do more to affect the quality of our lives by controlling oru expectations that we can by doing virtually anything else… Modest expectations leave room for pleasant surprises. The challenge is to find a way to keep expectations modest. One way of achieving this goal is by keeping wonderful experiences rare. P187
In a study people were asked to solve a puzzle alongside another individual (who was a confederate of the experimenter). Happy people were only minimally affected by whether the person working next to them was better or worse at the task than they were… Their assessment of their own ability and their mood was slightly higher if they had been working with slower peer, but even with a faster peer, their assessment still went up. In contrast, unhappy people showed increases in assessed ability and feelings after working beside a slower peer, and decreases if they’d been working beside a faster peer… It seemed as though the only thing that mattered to the unhappy person was how they did in comparison to their partner. Better to be told you are pretty bad but that others are worse, than to be told you’re pretty good, but others are better. P195 [How do you feel when doing a similar task as others when you’re faster, and when you’re slower?]
The significance of control to well-being was dramatically demonstrated by a study of elders at a nursing home. One group was given instructions on the importance of being able to take personal responsibility for themselves, and a 2nd group was given instruction about important it was for the staff to take good care of them. The first group was also given several mundane choices to make each day and a plant to take care of in their rooms. The 2nd group didn’t get these things…. The residents with control reported a greater sense of well being, were more active and alert, and lived several years longer on average. P205
People do differ in the types of predispositions they display. Optimists explain successes with chronic [repetitive over time], global [pattern repeats over many circumstances], and personal [self is the primary actor], and failures with transient [low frequency and short lived], specific [special circumstance], universal [external actors] ones. Pessimists do the reverse. Optimists say ‘I got an A’, and ‘She gave me a C’. Pessimists say ‘I got a C’, and ‘He gave me an A.’. p208 [So what are you using this quick test?]
Paradoxically, those nations whose citizens value personal freedom and control the most tend to have the highest suicide rates. These same values allow certain individuals within these cultures to thrive and prosper to an extraordinary degree. The problem is that on the national level, these same values have a pervasive toxic effect. P215 [Home of the free, and land of the depressed]
What can we do?
- Choose when to choose
- Review recent decisions you’ve made, both small and large.
- Itemize steps, time, research and anxiety that went into making those decisions.
- Remind yourself how it felt to do that work
- Ask yourself how much your final decision benefited from that work
- Be a chooser, not a picker
- Shorten or eliminate deliberations about decisions that are unimportant
- Ask yourself what you really want in the areas of your life where decisions matter
- If the world of options doesn’t meet your needs, start thinking about creating better options that do
- Satisfice more, and maximize less
- Think about occasions when you settle for good enough
- Scrutinize how you choose in those areas
- They apply that strategy more broadly
- Limit thinking about opportunity costs
- Unless you’re truly dissatisfied, stick with what you always buy
- Don’t be tempted by ‘new and improved’
- Don’t scratch unless there’s an itch
- Don’t worry if you do this, that you’ll miss out on all the new things the world has to offer
- You’ll encounter new things anyways because your friends, family and coworkers will tell you about them; but they’ll be those that are time and people tested by others. So they’re more apt to be truly better.
- Make your decisions non-reversible
- The very option of being allowed to change our minds seems to increase the chance that we will change our minds. And when we can change our mind about decisions, we are less satisfied with them.
- With final decisions, we engage in variety of psychological processes that enhance our feelings abou the choice we made relative to the alternatives. If a decision is reversible, we don’t engage these processes.
- Practice an ‘attitude for gratitude’
- Keep a notepad by your bedside
- Every morning or every night, list 5 things that happened that day that you’re grateful for.
- Regret Less
- Adopt the standards of a satisficer [what’s good enough for you]
- Reduce the number of options before making a decision
- Practice gratitude for what is a good decision rather than focusing on our disappointments with what is bad.
- Anticipate Adaptation
- Acknowledge that the thrill of a new purchase or acquisition won’t be quite the same 3 months after you own it.
- Spend less time looking for the perfect thing to lower your search costs
- Remind yourself how good things actually are, instead of focusing on how they’re less good than they were at first.
- Control Expectations
- Reduce the number of options you consider
- Be a satisficer rather than a maximizer
- Allow for serendipity
- Curtail Social Comparison
- He who dies w/the most toys is a just a bumper sticker, not wisdom
- Focus on what makes you happy, and what gives you meaning
- Learn to love contraints
- Set and follow rules eg. Always were your seatbelt, brush your teeth before bed, don’t drink and drive, etc.
- Think only about choices and decisions to which rules don’t apply. This is where you should spend your time and energy.