Lecture Outline: The Three Secrets of Wise Decision Making, Chapter Two

I. The Three Secrets: used in the management of complexity

a. Courage: to be rational in problem solving

b. Creativity : complete understanding of the problem and all available options

c. Balance: judgment of the problem from all sides allowing the best alternative to emerge

*The Three Secrets: secrets to different people

-Balanced Judgment: secret to those trying to make decisions without formal training, focus on evaluating decisions in their head without formal analysis

- Courage is rarely mentioned by decision scientists

- decision makers and decision scientists understand the importance

of creativity, but do not promote it

II. Rationality: direction in thought

a. Rational decision making

- begins with fact and value premises

- proceeds to a logical conclusion and a preferred alternative

b. Example of insufficient courage to make a rational decision:

- parents, bosses, politicians resist admitting weakness or failure in a

course of action they have advocated regardless of the evidence against

them

III. Creativity: richness of thought

a. Creative decision making

- considers a broad range of alternatives

- maintains bases for evaluating alternatives

- maintains awareness of any event that might occur which could alter the

value of an alternative option

b. Example of failure in creative decision making:

- frequency of times decisions are made and a better alternative comes to

light after having committed to the lesser option

IV. Judgment: balance of thought

a. Judicious decision making

- considers various facts and values

- relates facts and values in proportion to their importance

b. Examples of failure in proper judgment:

- young people who fail to attach proper importance in planning for their

working years, adults who fail to attach proper importance in planning

for retirement, society that fails to attach proper importance in planning

for future generations

V. Cognitive Conflict: motivational concept; understanding courage, creativity, and

balance

a. Related to:

- amount of uncertainty about the consequences of various alternatives

- importance of those consequences

* Equation: Cognitive Conflict = Importance x Uncertainty

- if importance is zero, no amount of uncertainty will produce

cognitive conflict

- if uncertainty is zero, no amount of importance will produce

cognitive conflict

- If cognitive conflict increases, emotional arousal increases; and

as arousal increases, attention narrows

b. Levels of Cognitive Conflict:

- Low Levels: attention is broadly diffused and quickly turns to other

matters, easily distracted

- Moderate Levels: attention is properly focused on the task at hand ,

openness to problem-relevant information; feelings of

interest, engagement and challenge

- High Levels: development of tunnel vision concerning the task to the

point where important considerations are ignored; too

highly motivated, experience panic

c. Levels of Interest in Decision Making:

- “Cold:” not likely to give the decision much thought

- “Warm:” best work is done on decision problems at this level

- “Hot:” try to resolve the problem too quickly, not enough consideration

d. Solutions: finding a balance between levels of Uncertainty and Importance

- Low Uncertainty: add alternatives through creative thinking, consider what is wrong with preferred alternatives and what is

good about non-preferred alternatives

- Low Importance: become more emotionally engaged, imagine that the solution is due tomorrow, it is entirely your responsibility, and you will suffer consequences for not meeting the deadline

- High Uncertainty: broaden the focus of the decision making process to encompass all aspects instead of focusing on one facet of the problem, reduce complexity through external memory, heuristics, or decomposition **definitions and page numbers on the following page**

(High Uncertainty continued)

*external memory: “In sight, in mind.” The opposite of “Out of site, out of mind.” (i.e. tying a string to your finger to remember a task, p.53)

*heuristics: educated guess that helps find a solution to a problem,

mechanisms for efficient search (p. 57)

*decomposition: strategy of “divide-and-conquer,” break the problem down and analyze the basic components (p. 60)

-High Importance: create emotional distance from the problem (i.e. discuss the problem with others, prepare for the worst, ask yourself how you would advise someone else in your situation)

e. Process Orientation: reduce importance and uncertainty through redirecting attention from the outcomes of the decision to the decision making process itself

-place more importance on making a fair, rational, good decision than the “right” decision

-reduction of importance and uncertainty allows for tolerance of greater complexity in a decision problem and achievement of higher quality solutions

f. Interest: caused by an intermediate level of conflict

- creative thought during problem solving, increased conflict and judgment during evaluation, results in one chosen alternative, conflict is reduced below the interest level and attention is diverted to other matters

g. Boredom: caused by a low level of conflict

-level of conflict is too low to generate interest and stimulate thought, results in no problem solving activity

h. Panic: caused by a high level of conflict

-high conflict levels result in discomfort and desperation to eliminate the discomfort, no problem structuring only simple hasty evaluations to come to an easy solution

i. Defensiveness: caused by relatively low levels of conflict

-personal threat closes options for unbiased problem solving, defense mechanisms reduce conflict to the point where it seems uninteresting, the problem is not solved and will resurface

VI. Secret One: The Courage to be Rational

-Recognizing Lack of Rationality: caused by decision avoidance

a. Representational Beliefs: represent reality in an unbiased fashion

b. Challenged Representational Beliefs: results in cognitive conflict, stimulates unbiased problem solving, leads to better decision making

c. Self-Enhancing Beliefs: function to reduce cognitive conflict and allow us to feel good about ourselves (i.e. religion, politics)

-many times these beliefs are not tested because we feel they are correct and we fear the answers that might result from testing

d. Rational Beliefs: requires optimal level of cognitive conflict and hope

-a belief is not rational if it is accepted or rejected based on the degree to which it conforms to the believer’s self-concept, lifestyle, or feelings

-Do I Have the Courage to be Rational? Ask yourself: “Would I be willing to commit to and actually follow through on whichever of the alternatives the analysis indicates is the best?”

e. Irrational Beliefs: reduce importance and uncertainty, increase hope

- may reduce the perception of importance through shifting responsibility or procrastinating (saving the problem for the “future self”)

-may conduct a biased search for information confirming the desired belief and avoiding information that disconfirms the belief

-both importance and uncertainty reduced in this way leads to distorted reality and premature reduction of cognitive conflict, this takes away the stimulus for creative thinking that could lead to genuine problem solving and decision making

f. Bolstering:

-reduces perceived uncertainty by biased thinking that strengthens what we are committed to and weakens other options

-Warning Sign: too many options pointing in the same direction, the weaker the belief, the more people feel they need to support it

* “The person thinking rationally will respond with interest to challenging information, whereas the person thinking irrationally will respond with emotion and resistance.” (p.25)

g. Escalating Commitment: investing in a bad decision and being inclined to invest more to turn it into a good decision

-making a commitment to a bad decision makes us feel that it is a reflection on us as decision makers, which is why we try so hard to justify the bad decision (i.e. Vietnam War)

-reduce cognitive conflict by reducing the importance, set commitment limits in advance, view the conflict from the other party’s perspective and if it looks equally as attractive from there…something is wrong

h. Hope: directional, avoiding irrationality

-the belief that rational, unbiased decision making will result in the best decision

-the belief that we have good problem solving skills, adequate resources, a proven history of problem solving

-know how to break problems down into basic components for analysis

-discuss problems with others who are a positive resource

-practice problem solving skills with less intense problems for future preparation

i. Positive Attitudes for Decision Making:

-we don’t have to make decisions by ourselves

-we don’t have to be right on the first try

-we don’t have to be exactly right, even in the end

-we don’t have to be able to think about everything at once

-we can learn from our mistakes

*”We are most likely to be successful if we are uncommitted during decision making and

committed afterwards.” (p.30)

VII. Secret Two: Creativity

a. Creative Thinking:

-a new generation of ideas

-these ideas satisfy some standards of value

-decision problems are structured in terms of alternatives, values and events creativity is necessary to ensure that all possible alternatives are considered

b. Recognizing Lack of Creativity:

-fear of new ideas

-inability to come up with new ideas

-coming up with the same ideas over and over again

-Remedy: stimulus variation

c. Stimulus Variation:

-Controlled Process: limited capacity of working, or active, memory; the working memory can hold a string of 7 unrelated numbers on average, average of 5 unrelated words

-Automatic Process: thinking in terms of patterns laid down in long-term memory, can greatly improve the working memory, but can lead to reduced creativity due to working with familiar patterns, associative patterns often revisit the same ideas

-perspectives are based on automatic processes which results in difficulty changing perspective

-Priming: once ideas have been activated in working memory they remain ready for a few days to allow for quick access

-Priming and Associations create a box that is difficult to see out of during problem solving, however they are generally useful tools

-Force Fit: attempt to turn a foolish idea into a workable solution

- when exercising creativity in problem solving it is important to find merit in as many ideas as possible, even foolish ones

-this requires evaluative judgment, keeping the problem in mind

-Phases of Force Fitting in Decision Making:

1. Come up with a foolish “stepping stone” where no evaluation is employed. This is stimulus variation in the problem-structuring phase.

2. When moving from the “stepping stone” into a potential solution, only positive evaluation should be employed. This is force fit in the problem-structuring phase.

3. When evaluating potential solutions, both positive and negative evaluations should be employed. This is the evaluative phase.

- General Points for Stimulus Variation:

1. No need to use creative thinking techniques as long as we are coming up with ideas, wait until no new ideas are coming or the same ideas are coming up over and over.

2. Force Fit must be applied to get from the “foolish” stepping stones to truly creative ideas.

3. The techniques are most effective when applied first to values, then alternatives, then events; and if applied to big-picture considerations, rather than details.

4. No need to use every technique, only the ones that appeal to you. The other ones can be tried when you have more time.

d. Five Techniques for Stimulus Variation:

1. Mood: important internal stimulus

-people who are in a good mood tend to come up with more ideas

-people who are in a good mood tend to come up with more ideas that go beyond the narrow scope of ideas to the broader spectrum, creativity

-being in a good mood should be congruent with feeling hope, not time pressure

2. Observation: fundamental implementation of stimulus variation

-thoughtful/mindful observation of the surrounding world

-getting the facts straight is a good way to get problem solving ideas

-when stuck on a problem, going through the facts again is helpful

* “Careful observation and careful attempts to establish and understand the facts, pretentious as they may sound, may very well be the best source of ideas.” (p.42)

3. Creative Conversation: stimulates internal stimuli

-new internal stimuli are created when we speak and write

-new external stimuli is experienced when other people speak

-people with different experiences and perspectives have the potential to think more adequately about a problem together than they ever could alone, combining expertise and knowledge

-talk with others about decision problems

-it is important to apply force fit for creative conversation to work

-think constructively about what you are saying and hearing in a conversation

-Specific Variations: talking with others

i. The Devil’s Advocate: provides arguments against the prevailing direction of the group

-first formulated by the Roman Catholic Church as part of its canonization process

-works best when people merely question the assumption on which the dominant alternative is based, rather than becoming an advocate of that point of view

ii. Giant Fighter’s Stratagem: use of the thoughts and knowledge of experts to help us structure our decision problem

-use of intelligence to redirect the superior force of others to one’s own advantage (i.e. salesman admitting that a competitor’s product is superior to their own, provides confidence in decision making as a consumer)

iii. Networking: Who else would you suggest I talk with?

Who would be likely to disagree?

-when seeking relevant information from anyone, ask whom else you should speak with in regards to the topic at hand

-greatly expands the range of stimulus variation in creative conversation

4. Breaks: allows time for internal and external stimuli to vary on their own

-*incubation: getting an idea during interruption in work on a problem

-stimulus changes during a break can occur in waking life or in dreams

-in dreams, stimulus variations are related to whatever problem was being worked on that day, this is an effect of priming

-in waking life, stimulus variations won’t necessarily bear any efficient relationship to the problem that is at hand

-Remedy to this concern:

i. Use the break to work on related problems.

ii. Become deeply immersed in the problem before taking the break so that a broad range of daily experience will be seen as problem relevant.

* “Make your decision problem a high priority, and then live with it and sleep on it.” (p. 47)

5. Checklists: easiest technique for stimulating ideas

-expose yourself to a large number of stimuli in a short period of time by simply looking at a list of items related to your problem

-discover checklists that are relevant to the problem at hand

VIII. Secret Three: Balanced Judgment

a. Judgment: weighing various considerations, quantitative task

-good judgment is attaching proper weight to each of the various considerations

-bad judgment is attaching inappropriate weight to considerations

-in social contexts judiciousness shows itself as fairness or evenhandedness

-in decision making judiciousness involves assigning appropriate importance to various values, and appropriate probabilities to various possible futures

-requires consistency among ideas, and consistency between ideas and observations

b. Recognizing Lack of Balanced Judgment:

-when a decision turns out badly, the situation is evaluated with the same faulty judgment that led to the decision in the first place

-this leads to easily blaming our failure on external circumstances

-Warning Signs:

1. A single alternative: when considering a single alternative, remember the value of comparison shopping

2. A single value: when considering a single value, remember the danger of single-issue thinking, all values are important and should be taken into consideration during decision making

3. A single future: when considering a single future, remember that planning for a single future is limiting since it is likely that the future we prepare for might not be the future that occurs

4. All considerations point to the same alternative: when all considerations point to the same alternative consider that even the best alternatives have drawbacks

- simple problem representations tell more about the limited capacity for thinking about a complex world than they tell us about the world itself

5. Vacillation: when drawn to one alternative on some occasions and different alternatives on other occasions, remember that there might be too much to keep in mind all at once

-this vacillation could be caused by focusing limited attention on different samples of relevant considerations at different times

* “Resistance accompanied by emotionality suggests irrational defensiveness against the new idea; ready acceptance suggests that the decision maker was simply not creative enough to come up with the new idea; resistance accompanied by confusion and cognitive strain suggests lack of capacity to deal with the new idea along with all others.” (p.51)

-when information is being excluded is important to consider whether the information is genuinely unimportant (good reason), or because it puts us into cognitive overload (bad reason)

-Solution: supplement working memory with external memory or priming and fit the problem to the available memory through heuristics and decomposition

c. Controlled Processes with Limited Capacity:

-if the decision process is encountered infrequently (i.e. buying a house) we are not likely to have chunks in long term memory to aid working memory and enlarge its capacity

-Limited capacity contributes to poor judgment:

1. We can only hold a certain amount in working memory excluding much information from consideration.

2. Our capacity for thinking about what is in working memory is limited, many of the distinctions among items in working memory may fail to be considered and, therefore, inadequately weighted.

-we adjust to the limited capacity of working memory by thinking about the most important considerations, however perspectives and situations change causing a back and forth movement between alternatives with a resulting inability to arrive at a stable preference

d. Techniques to attack complex decision problems judiciously:

1. External Memory: supplement to working memory

-what we keep in view we are likely to think about, “In sight, “in mind.”

-written symbols allow us to have freedom from the limitations of what we know and have learned about the immediate situation, and allows us to consider what is not present - the past, the future, and the perspectives of others

-the most important considerations in a decision process can easily be out of sight and out of mind

a Lists: using external memory through creating lists

-lists of values, alternatives, future scenarios ensures that the good ideas are not forgotten

-listing ideas encourages the production of new ideas -writing down old ideas frees controlled processes from reliance on habitual patterns, creates flexibility for new ideas

b. Decision Tables and Decision Trees: external memory devices

-retain ideas that have already been generated and helps to organize them to guide further thought in logical directions

-organize the lists of values, alternatives, and future scenarios into a decision table, if uncertainties regarding the future scenarios are great a decision tree can be helpful

-without decision tables and trees we fail to make crucial comparisons in reasoning about what we know, the tendency is to compare single alternatives against intuition, rather than comparing multiple alternatives

against each other

-this pattern of thought results in confirmation bias, resulting in uncritical acceptance of poorly thought-out explanations

-decision tables and trees force comparison of alternatives

c. Removing Clutter From External Memory:

-separating problem-relevant material from problem- irrelevant material

-”dazzle-effect:” irrelevant information in the external memory demands attention, taking the attention away from the important task

* “An organized work space reduces distraction and helps focus attention on the task.” (p.56)

2. Priming: getting ideas ready to be thought out more easily

-intermediate-term memory makes information more accessible to the working memory than it would be if accessed from long-term memory

-Stimulus Control:

i. To get new ideas vary the automatic processes through varying the stimuli

ii. To retain good ideas, reactivate the automatic process by repeating stimuli in the form of external memory aids

iii. To make potential good ideas more available to thought, prime automatic processes by thinking about them or associated ideas

iv. To get rid of distracting ideas, avoid activating irrelevant automatic processes by removing irrelevant stimuli

3. Heuristic Search: mechanisms for efficient search -an educated guess that helps to find solutions

-central theme: constraint location, locating those aspects of the problem that restrict further search to regions of the problem space where good ideas can be found

-with complex problems, think efficiently by distinguishing the important from the unimportant and direct attention to the essential

-Types of Heuristic Searches:

i. Breadth-first search: importance of relevance criterion for a well-structured value set, classes of alternatives, beginning at the bottom of the Decision Ladder

ii. Value-focused search: analysis of values in creative thinking about alternatives

iii. Sub-goal analysis: efficient thinking about values

-To think efficiently about your decision problem:

i. have a “rough sketch” before getting bogged down in detail

ii. start the “rough sketch” by thinking about your goals or sub-goals

4. Decomposition: analysis of a problem into its components

-the problem is broken down into sub-problems, the sub- problems are solved and the solutions are pieced together to solve the original problem

-enables us to think about a small number of ideas at a time, yet arrive at a conclusion that is based on a large number of ideas

-allows us to get a complex problem within our mental grasp

-reduces interpersonal and intrapersonal conflict

-Encourage judicious thought in decision making:

i. Use external memory.

ii. Remove problem-irrelevant clutter from external memory.

iii. Think heuristically.

iv. Use a decision table to structure external memory in terms of simpler sub-problems.