Thinking Err0rs

Seriously, there are some things you can do to figure out if you are getting pulled in a no-win battle. Just ask yourself: if I were being brought in now, would I take that project? If the answer is no, run!

If we are offered a coin toss in which we may lose $10, we will on average ask for a potential win of $20. Why is it that we are more sensitive to losses than to equivalent gains? How can we avoid making hasty, irrational decisions when we deal with an immediate loss, or the possibility of a loss?

Strangely, trying to remember more numbers decreases our self control. We now know why. Our prefrontal cortex, crucial to our rational decision making, can only hold a small amount of information. It roughly can hold seven plus or minus two “items” at the same time. The result: when our rational brain is busy remembering numbers, it is less able to control our emotions. We go for the fattening piece of cake.

Where does this leave us, in practical terms? While it now appears that the rational/emotional competition is an oversimplification of our decision making process, it is still a useful metaphor for improved decision making.

Why do some people stay far away from the edge of a cliff, while others run, jump, and open their parachute a few seconds later?
An interesting article in the May issue of Outside magazine looks inside the brain of a BASE jumper.

Our brain reacts more strongly to unexpected rewards than to those that are expected. This is what slot machines exploit. You can apply this through random, positive actions. How about sending a thank you note to a customer now?