Changing your mind can be harder than you realise

I don’t if you are aware of the work of Prof Daniel Kahneman, whose work earned him a Nobel prize for economics.  He realised that the way we think is far less rationale than we might wish.  We have two ‘thinking  modes’ which he named System 1 and System 2.  One is the rationale, slow deduction reasoning, the other is much faster and habit based.  It relies on previous decisions and experiences, preconceptions and biases, such as the desire not to be wrong. 

Kahneman realised that we respond very differently to losses than to gains. We feel the pain of a loss much more than we feel the pleasure of a gain. He even worked out by how much. If you lose £10 today, you will feel the pain of the loss. But if you find some money tomorrow, you will have to find more than £20 to make up for the loss of £10. This is loss aversion, and its cumulative effect can be catastrophic.

Dr Laurie Santos wanted to see how deep rooted this bias was and  so studied the behaviour in monkeys.  They were able to create a system of risk & rewards which, in effect, introduced them to the concept of money.  The monkeys were taught they could exchange a silver token for grapes.  They were then offered a series of choices some of which resulted in ‘losses’ and some in ‘gains’, and the news is that monkeys exhibit the same patterns as we do when it comes to gambling.  So with the thinking patterns so deeply engrained our chances of changing them are small.

We are very good at justifying our decisions after the event and presenting them as the being the result of logical processes but all to often they come from lazy thinking, reactions and deep biases.  I wonder if the US would have required more proof of Sadam’s weapons of mass destruction if they hadn’t just suffered the ‘loss’ that 9/11 represented to their psyche?

If we can become a little more aware of how we think and come to our decisions then at least we have some chance to avoid some of these evolutionary pitfalls.

Resources:

1. Horizon “How we really make decisions”

This entry was posted on Wednesday, February 26th, 2014 at 14:39 and is filed under Business Change, Personal Change. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.