Other people’s actions and opinions influence us

In a big complicated world, there are too many decisions to be made. One sensible way to make snap decisions is to copy what other people are doing. If it hasn’t killed them, it probably won’t kill you either. Evolution has wired us to view the choices other people make favorably.

To get elected, plant as many campaign signs on people’s lawns as possible

What other people think matters. If lots of people in your community feel strongly enough about a candidate that they put up a sign supporting the candidate, perhaps the candidate is worth serious consideration. While you might not think this through consciously, you will likely feel more positive about candidates with more visible support.

Easier to follow than to lead

Once one pedestrian at a busy intersection starts crossing against the light, it is much more likely that others will follow. The first person needs to carefully check to make sure there is enough time to get across safely. The next person can look a little less carefully because they know that the first person has already checked the traffic. Once a few people have started across, you can quite safely walk out without looking at all.

Much of the time copying is good

In most situations copying other people is good. It helps us make decisions quickly without having to think very hard. Evolution has wired us to rely on the judgement of others. We feel much better making decisions when other people agree with us.

Occasionally it doesn’t work

If the first guy crossing the road was distracted and didn’t realize how fast the car was going, the second person heading across gets hit too. Sometimes it is necessary to think independently. The trick is to figure out when following the crowd is a bad idea.

Overwhelmingly, people do what they have always done.

• You drive home the way you have always driven home. You probably don’t stop to think if it is the fastest route.
• You buy the cereal you always buy. You don’t analyze the nutritional information on the boxes or comparison shop prices.
• You go to your favorite restaurants often because they were good in the past.

Thinking is hard work. It makes sense to take the easy path most of the time. The easiest path to take is the path you have always taken.

This isn’t a bad strategy for decision making. You’ve made it this far. Your past decisions can’t have been that bad. Are you being rational? Probably not. Does it matter? No, not really.

The brain doesn’t run on the consensus model.

Nobody really knows exactly how we make decisions. One thing, however, is reasonably clear. Different parts of our brains have different jobs and often don’t agree. The sugar craving area loves donuts and candy bars. The part that is concerned about self-image and extra flab hates them. It is the pushing and pulling of different parts of our brains that makes making decisions difficult.

When we finally make a decision, the losing side hasn’t given up. At best, it has been mollified. The strength of its arguments lose force and are eventually overwhelmed.

Evidence of this lack of agreement can be seen in the remorse we often feel after making a big decision. The nay-saying sections seem to rally after the decision is made and we are committed. I have no idea how this mental tug-of-war plays out in our skulls. Recognizing the tug-of-war, though, can help us make better decisions.

Specifically, we can use the lack of consensus to our advantage. When important decisions need to be made, we can do our best not to leap to quick conclusions. We can deliberately give the nay-sayers a chance to build their case. In a sense, we can give our own internal devil’s advocate a chance to speak.

This isn’t to say that we need to actively think through problems and deliberate on the cons we perceive. Often it is enough to simply give our unconscious minds time to process a problem.

Sleeping on a decision is usually a good idea.

It happens to all of us. We know that doing something is going to hurt us in the long run but we do it anyway. The dieter eats the donut. The husband cheats on his wife. The new gym member skips a work-out.

Why do we do it?

The answer, I think, is that a course of action is never absolutely clear cut. One donut doesn’t make us fat. The wife may never find out. The gym will be open tomorrow.

If a situation isn’t black-and-white, there is wiggle room. Giving in to our cravings isn’t irrational. All that has happened is that the pros and cons have been reevaluated. The desire for short term reward overpowers concern for long-term potential costs.

I think it is pretty clear that cravings affect how we think. Sometimes cravings are so powerful it is like they decide what they want and then command the rational part of the brain to come up with an explanation for why it is okay.

The power of cravings and other emotions to affect our rational thinking leads to two questions I find interesting:

1. How do we avoid doing things that are bad for us in the short term so that we can meet our long term goals?
2. Given that we are never free of emotion, how confident can we be about any of our rational thought?

I abandoned this blog just after starting it because I was too busy. I started a new job and moved apartments. I didn’t have time to write posts for this new blog.

I have just decided to change tacks on my economics blog and am going to do the same thing here. Instead of creating frequent posts that people glance at, I want to write posts about questions I have. My hope is that people find the questions interesting and leave comments. I expect that people’s comments will be at least as interesting as my posts.

To start out, I am going to write a post once a week and then monitor and respond to the comments daily.

This week I want to hear what people think about how we choose. How do people make up their minds? Are we logical? Are we emotional? What are emotions anyway? It’s all fair game.

I’ve been reading about how we make decisions and am learning that our subconscious minds are doing a lot of work. What goes on behind the scenes that we aren’t even aware of has a huge impact. I don’t have anything brilliant or insightful to say at this point. All I can say is that I’m becoming more and more convinced that we aren’t optimizers.

In most situations, we don’t have a single obvious objective to pursue. Instead, we juggle many competing priorities in a complex environment. In real world situations, we have no idea what the best choice is.

Unfortunately, not knowing the right answer doesn’t eliminate the need to make decisions. We have to make decisions despite the fact that sometimes things will go poorly. So long as our bad decisions don’t kill us, we can carry on and try again.

Instead of thinking of people as optimizers, I think it makes more sense to see people as disaster avoiders. The role of much of the machinery in our heads seems to be to keep us out of trouble. For example, our startle reflex very quickly sets us in motion when something unexpected and potentially dangerous happens.

While our decision making is much more sophisticated than a mere reflex, I believe that one of the main focuses of our decision making methods is to keep us safe. We tend to prefer the status quo to change because the status quo worked in the past. We also tend to feel more comfortable doing things that other people are doing. If it hasn’t killed them yet, maybe it’s okay for me.

I think of the human brain as having a collection of tools that helps keep us alive. Our decisions only need to be good enough to let us survive another day.

The first thing I want to do in this blog is reject the economic idea of rationality. Mainstream economists assume that people are optimizers. People are supposed to know what they want and do what they can to get as much of it as possible.

Imagine your goal is to get to the top of a hill. While it takes effort to get there, you steadily make progress one step at a time. You may have to work your way around boulders or other obstacles along the way, but you always know where you are headed. Every decision you make to turn left or right is informed by the goal that is clearly in sight.

Mainstream economists assume that the day-to-day choices we make are like deciding to turn left or right when climbing a hill. There is no guess work involved. The choices we make move us inexorably towards our goals.

I have two problems with this view of how we make decisions. First, we don’t have clearly defined goals. Second, we aren’t very good at moving towards the goals we do identify.

What is the goal of life? Beats me. I don’t even think there is a single overarching goal. The best I’ve seen are loosely defined things like “the pursuit of happiness” or “to get closer to god.” Nothing as concrete as the peak of hill.

Even if we set goals, we have a tough time pursuing them. Ever go on a diet? All you have to do to lose weight is eat less and burn more calories. Easier said than done.

While it might be nice to be an optimizer pursuing a single well-defined goal, life is too complicated. The hill we climb is shrouded in fog and most of us spend a good deal of time going the wrong way and walking into trees.

Whatever it is that our brains do, it isn’t optimization.