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The Best Ways to Screw Up a Decision: A Definitive List of the Most Common Decision Making Mistakes

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So, how do you make a good decision?

Seriously, is it that difficult to make good choices? Is it that hard to add up the evidence and move forward in the best direction?

Umm, have you seen reality television lately? Daytime talk shows? Our pop culture is full of examples of people who seem to find it nearly impossible to make good decisions. Whether they act from emotion or to please others or are in a state of denial, people over and over make choices destined to keep them from getting what they really want out of life.

We've been looking at what makes for a poor decision - the mistakes repeated daily by people the world over, CEO's to housewives to Presidents. Here's our choices for the best ways to make the worst decisions.

So do you make bad decisions?

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Mistake 1: Confirmation Bias

Confirming what we already want to believe by seeking extra information

Confirmation bias is the tendency to seek information that supports rather than disproves your theory.

If you believe that your husband is having an affair, you're more likely to search for evidence that confirms he is having an affair rather than evidence that disproves it.

Mistake 2: Like attracts Like

To a man with a hammer, every problem looks like a nail

When we approach decision making from a perspective that's most familiar to us, but which may not be the best perspective.

During the Cuban Missile Crisis, John F. Kennedy's military advisors tended to suggest military options because their background trained them to think militarily. His diplomatic advisors tended to suggest diplomatic options because they were familiar with using diplomacy. To make a good decision, Kennedy wisely considered both sets of advisors knowing that each group brought with them their own tendencies.

Mistake 3: Recency Effect

The tendency to be irrationally influenced by recent information.

The week after a significant plane crash, more people are afraid to fly. In reality, the likelihood of a plane crash has not increased because of the recent event.

Mistake 4: Delaying decision-making

Decide already, dang it!

Time is a crucial factor when making decisions. Prolonging decisions can often lead to undesirable outcomes.

Someone deciding whether or not to invite their high school crush to the prom may be heartbroken to find that someone else has beat them to it.

Mistake 5: Bandwagon Effect

If everyone else jumped off a cliff...

When we see other people doing something (especially a large group of people) we tend to assume it's correct. Although most people would admit this logic is clearly flawed, social forces make the bandwagon effect very powerful and therefore cause people to make bad decisions.

The dot com bubble of the late 90's was clearly caused by the bandwagon effect. Record setting gains in internet technology stocks caused more and more people to decide to invest their money. The bubble burst on March 10, 2000, causing many people huge financial losses.

Mistake 6: Sunk Cost Effect

I paid for it, I shouldn't let it go to waste.

The irrational reaction we have to irreversible costs, driving our reluctance to abandon projects in which we have previously invested considerable resources. We're less likely to drop out of medical school if we've already invested 3 years and thousands of dollars into our education.

Politicians frequently demand further public funding of costly defense policy on the grounds that, if such funding is not made available, previous expenditures, including lives lost, will have been for nothing.

Share your decision making challenges

What's your toughest problem in making a decision? What mistake do you commonly make? Have a solution to share?

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  • Reply
    Jason Yarmolinsky Feb 14, 2009 @ 10:56 am | delete
    A common decision making mistake is relying on individuals who feel they have the most experience, or are most affected by an outcome and therefore believing that they have the most knowledge to make the right decision. Simply because I am Canadian does not mean that I am the best person to go to for a problem that effects Canadians. As a business student, I see this often with group work. We could be working on a case study and one group member will suggest an answer that is far different then everyone else. Once people begin to complain the individual will say something like "well I have x years (sometimes months) of experience in the field that the business in the case study operates in". Too often, this appeases the group. In reality, it should not.
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