July 2013

Decision-Making Traps

by Sarah Thrift on July 12, 2013

Lost and with a Decision to Make

“The greatest deception men suffer is from their own opinions.”
Leonardo Da Vinci

The 1998 article by John S. Hammond, Ralph L. Keeney, and Howard Raiffa on the “The Hidden Traps in Decision Making” (reprited in HBR in 2006) continues to be a really good reminder for me of the subconscious things we do in making decisions – the way we convince ourselves we are right, bias evidence and seek opinions accordingly.

Hammond, Keeney, and Raiffa refer to specific traps of decision-making including:

  1. The Anchoring Trap: When considering a decision, the mind gives disproportionate weight to the first information it receives and anchors there e.g. previous sales volumes as a predictor for the future.
  2. The Status-Quo Trap: a strong bias toward alternatives that perpetuate the status quo. In business, where sins of commission (doing something) tend to be punished much more severely than sins of omission (doing nothing), the status quo holds a particularly strong attraction.
  3. The Sunk-Cost Trap: Make choices in a way that justifies past choices, even when the past choices no longer seem valid. Why can’t people free themselves from past decisions? Frequently, it’s because they are unwilling, consciously or not, to admit to a mistake.
  4. The Confirming-Evidence Trap: The confirming-evidence bias not only affects where we go to collect evidence but also how we interpret the evidence we do receive, leading us to give too much weight to supporting information and too little to conflicting information.

Which got me thinking…

How often do we convince ourselves that we’re gathering information when we’re actually fishing for support?
How often do we dismiss contrarian views, rather that ask, “what would need to be the case for this to be true?”
How often does our fear subsconsciously prevent us from stepping out of the past and the status quo?

I know for myself that the answer to each of those questions is: Much more often than I’d really like to admit. Which means I’ll be keeping my checklist of questions at the front of my mind going forward.