This episode wraps up season three where we've explored the topic of thinking problems and we've looked at eight different biases that impede our decision making. A heuristic is a mental shortcut that helps us make quick, but often less than optimal decisions. The benefit is that they allow us to make quick decisions based on approximations, mental shortcuts, and educated guesses. But the downside is that they often lead us to make flawed decisions.
Season three of How To Choose has demonstrated that rational economic theory doesn't explain the way that humans interact with the world. Behavioural economics shows that often our thinking and our decision making are not rational. The fictional species homo economicus that economists might talk about is dead. We are homo sapiens, we're flawed, we're messy.
Before making important judgments or decisions, pause. Ask yourself, what are the thinking problems that might be clouding my ability to think clearly and make a good decision here? And to avoid drawing a blank when you ask yourself that question, you need to spend some time reflecting on these different common biases.
But don’t beat yourself up when you fall victim to one of them. They are so common, and we know that even experts in decision making, like judges, are susceptible. Observe when you may have demonstrated one of these biases and make sure you are learning from it so you can make a better decision next time.
There are so many great resources available online to dive more deeply into thinking problems, here are a few to get started:
IN OUR NEXT EPISODE...
This is the end of season three, keeps your ears open for season four!
For more episodes and information about decision making head over to our website: https://goodbetterright.com.au/podcast/
Tessa Mudge and Ken Smith