The history of Choice and one clumsy mother

This morning we hurtled out of our front door for the drop-off to school, with my daughter haranguing me about being late and how she will miss the chance to be first in the queue of students waiting to enter the school as soon as the gates open. I explained to her with my signature nonchalance that it doesn’t matter when the school gates open, it only matters when the school gates close. However, she takes after the pater and they both believe in never being late to an early start. I, on the other hand, run elaborate calculations in my head and pick the options that will get me there just in time after accounting for probable eventualities but not considering outlier delaying events which, while possible, are unlikely to happen just about today! I have had to eat crow a few times as you can fathom, but I have also gotten through with doing several other things that needlessly fill up the to-do lists of working or in my case studying moms.

I thought I should try a different approach with her. I am taking a course on Judgement and Decision-Making so I have been thinking about these topics a fair bit. As we walked to school, I told her a short true story from the day before - a three minute slice of my life as a full time PhD student. I had a spate of classes that morning and had skipped breakfast. I thought I would get to lunch before a 4 PM class but realized only at 2:30 PM that I had forgotten about an appointment I had made with a faculty member. I rushed to that meeting which ran over by 15 minutes and then I had to directly make it to class in another building. By the time I reached the classroom, it was 3:57 PM. I was massively hungry, on my period, and already exhausted from a long morning. These are early days in the program so I didn’t want to make a bad impression on the senior faculty member taking this class. The previous session was still in progress in the classroom so my professor and the students were all standing outside the class waiting for it to empty out. I assumed that the professor will also need 2-3 minutes to set up after we gain access to the classroom. So maybe I had just enough time to run to the restroom, go one floor down to the cafe, grab a cookie and some tea and get back up to the class just in time as everyone is settling in without being visibly late. I couldn’t waste more time dwelling over this so I dashed to the restroom and then ran to the cafe. There were two people ahead of me in the queue. It was 30 seconds to class. I had to decide if I should turn back or persevere and get that hot liquid and cookie I so badly needed. Two things occurred to me - one, if I didn't get the food and drink I would be quite useless in class. Second, the teller, who was also making the coffee, was very quick and efficient. I only needed hot water for my tea bag, and the cookie was ready made so I could pick it off the shelf and be gone as soon as my turn came. Eventually as I ran up to class and entered I saw the professor setting up his final slide and he uttered his greeting just as my bum hit the chair. Decisions, decisions! It is easy in hindsight to look at these small instances and congratulate ourselves for great outcomes, and then forget all about it. But if you unpack those three minutes you will see how it was a complex mixture of cognition, heuristics, emotions, judgement and subjective evaluations. It involved probabilities and outcomes, weights and trade-offs.

The point of my story was not to illustrate the superiority of my just-in-time strategy over her father and her early worm habits. Or to holler about what a superwoman I was there even as my daughter found the whole situation rather funny. I put myself in these sticky situations because I don’t plan as well and always have too much to do. But I wanted to impress upon her that each of us runs into decision making situations every day - from a three minute jaunt to major life forks, we are always choosing. How do we make decisions? What are good decisions? Are we rational or emotional in our acts of choosing? Do we retrospectively justify all our past decisions to not feel crippled in future decisions? What about the role of accountability and responsibility? How do you make decisions on behalf of other people?

These are fascinating questions, questions that I am looking forward to engaging with for a few years to come. As I immerse myself in several aspects of this subject, I studied the history of judgement and decision making - the evolution of this field of study. Let’s get right to it.

Judgement and Decision Making is a formidable part of several areas of study, only because as we saw, even a three minute sequence of actions can have a multitude of stressful choices. Far too many philosophers and writers have pithy quotes on knowing and choosing and doing (Life is a sum of all your choices? - Camus). Economists, mathematicians, sociologists, psychologists and neuroscientists have been contributing to the field for decades. Evolutionary biologists are now talking about the antecedents of behaviour and the biological justification of human choices. Marketers will sell their left kidneys to know exactly how their prospective customers make the choices they do. Religious texts are most often sought when faced with impossible choices, hoping for divine guidance if nto intervention. Whatever your ontological or epistemological reason for being interested in choices, it is worthwhile to bring your attention to how we got to studying choice and decision making in the expansive ways that we do now? How has the field evolved and where are we going?

To deconstruct what goes into decision making it is important to consider the factors people use to assess the quality of a decision. Far too often decisions are judged by outcomes. Outcomes serve as an ex-post justification of choices when the outcome is desirable and result in rueing about alternatives not to our liking. We also look at decisions as the availability and accessibility of future options - good decisions leave you a wider playing field in the future while bad decisions appear to narrow us into corners. Our affective dispositions while decision making or as associated with outcomes (how did you feel about it?) is another factor that influences assessment of decisions as good or bad. (Yates et al., 2003).

However a-priori, we do not have certainty of outcomes. If you were to bet on a lottery and were to in fact win it, that does not make your decision to bet either rational or good. The probabilities were stacked against you and the high value of one outcome is more diluted the less probable it is. This makes you consider both the value of the outcome and it’s probability which is the basis of calculating expected value of a decision. The expected value theory of decision making dates back to the 17th century an has its genesis in mathematics for gambling games. However this was soon replaced by the expected utility theory which adds the nuance of relativity. It states that the utility of money reduces with increasing gains (aka diminishing marginal utility) and that the utility also depends on how much you have to begin with. Therefore the absolute values need to be replaced with considered utility when evaluating a decision. This explains why games that pay off far into the unforeseen future, even with infinite value, are unlikely to bear a high enough utility for you to keep paying to play it in the near term. Most people will keep their money and look for alternative games, even ones with smaller rewards. This is the expected utility theory.

This was the normative state of decision making science well into the middle of the twentieth century. It is only with the advent of Prospect Theory in 1979, as proposed famously by Kahneman and Tversky that the field underwent what is now a popular example of Kuhn’s ‘paradigm shift’. Theorists and critics of rational choice have replaced probabilities with subjective probabilities. They have introduced the idea of a reference point for every decision making situation. The reference point is such that you could have gains or losses. The shape of your utility curves are informed by diminishing marginal utility of both gains and losses, producing S-shaped curves. However we are averse to certain smaller losses over uncertain bigger ones - this is defined as risk-seeking behaviour to minimize losses or as loss aversion. On the other hand we are more inclined to certain smaller gains over uncertain larger ones - this is defined as risk aversion or ‘something is better than nothing’ heuristically speaking. Prospect theory and subsequent research introduced psychological behaviour into economics literature. It proved quite simply that even with the knowledge of utilities and the ability to determine probabilities, we routinely violate the principles of rationality. Our decision making is driven by heuristics and biases. Our choice is altered by framing of alternatives and all of this yields subjective weights to the options thereby altering the considered expectation of outcomes.

This explanation of routinely irrational behaviour has its origins in the concept of bounded rationality as proposed by Herbert Simon in 1990. He articulated that rational calculations are bounded by the environment in which the task is undertaken and the ability of the decision maker to be objective in the given situation. This idea of bounded rationality informs the study of judgements. Judgement of probabilities is altered by skill levels and belief systems. Subjective goals and motivations yield weights on outcomes that are different from objective evaluation of the outcomes. In addition to goals and motivations, beliefs, attitudes and skill levels, there are exogenous cues in our environment. These cues can be based in memory or they may be stimuli around us. The affective and cognitive response to these cues further muddles the field of judgement. Not to mention the fallibility of these cues because our senses are not always reliable. This explains how we all bring our private experiences to universal problems. Judgements as an area of study has not received as much attention as decision making itself however it is easy to see that judgements precede decisions, and are therefore foundational to work involving nudges for social, personal and economic well being.

Phew! I hope this helps situate the chronology and important areas in the field of judgement and decision making for you, as well as it did for me. Tomorrow morning when I drop my daughter to school again and knowing what I do now of her goals and my judgement, I am going to plan my morning better. If you have a story or question about judgement and decision making that speaks to the blog here, do write in.

P.S: If you are interested in the complete history of the evolution of choice, annotated by time and the key thinkers who contributed to the field, I highly recommend reading 4 in the additional reading section. It has a graphical timeline going back 2000 years that is both fascinating and humbling as a student of the field!

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Additional Reading

1. Straight Choices: The psychology of decision making Chapter 2 - https://www.worldofbooks.com/en-gb/books/ben-r-newell-university-of-new/straight-choices/9781841695891?gclid=Cj0KCQjw8eOLBhC1ARIsAOzx5cG7PNl4TW5whPmiwxWvunHhkcNVLHfmTVogAosI1LH4zPjG34stOlcaAipLEALw_wcB
2. Herbert Simon on Bounded Rationality -https://plato.stanford.edu/entries/bounded-rationality/
3. Tversky and Kahneman propose Prospect Theory - https://www.jstor.org/stable/1914185?seq=1#metadata_info_tab_contents
4. HBR - A brief history of decision making
https://hbr.org/2006/01/a-brief-history-of-decision-making

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Ricochet Ink is a publication for contemporary research on consumption, behaviour science, responsible communication and product design. The pieces here are informed by foundational texts, published and ongoing academic research and practitioner case studies from around the world.  

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