The CXL Institute Digital Analytics Minidegree Program
I am excited to have been given a scholarship for the CXL Institute’s Digital psychology & persuasion Minidegree program.
During this course, I will write a weekly article, containing key learnings and my thoughts on the content.
Digital psychology & persuasion is a relevant specialisation to understand how your user’s brain works in every industry.
In its own words, CXL Institute describes the key objectives for students of this course as being to “Learn proven psychological frameworks that will help you understand user behavior, and influence purchase patterns.”
You can find more information here:https://cxl.com/institute/programs/digital-psychology-persuasion-training/
Structure of the Course
The main topics I will cover in the following weeks are Psychology Foundations, Neuromarketing & persuasion models, and Applied behavioral psychology.
To provide some structure, I will be able to include the subsequent information in my review of every course:
- The topic of the weekly course
- The Instructor
- Introduction
- Analysis
- Conclusion
Course week 3: Decision Making and Emotions
Instructor: Bart Schutz
Introduction
Every day, people have countless decisions, big and little. Understanding how people reach their choices is a neighborhood of cognitive psychology that has received attention. Theories are generated to explain how people make decisions, and what sorts of factors influence deciding within the present and future. Also, heuristics are researched to know the decision-making process.
Several factors such as previous experience (Juliusson, Karlsson, & Gӓrling, 2005), cognitive biases (Stanovich & West, 2008), age and individual differences (Bruin, Parker, & Fischoff, 2007), belief in personal relevance (Acevedo, & Krueger, 2004), and an escalation of commitment, influence what people decide. Understanding the factors that influence the decision-making process is vital for understanding what decisions are made. That is, the factors that influence the method may impact the outcomes.
Heuristics function as a framework during which satisfactory decisions are made quickly and with ease (Shah & Oppenheimer, 2008). Many types of heuristics are developed to explain the decision-making process; essentially, individuals work to reduce the effort they have to expend the choice of making decisions, and heuristics provides an easy guide to follow, in other words, it helps to reduce the effort they must disburse. Together, heuristics and factors influencing decision making, are a strong aspect of critical thinking (West, Toplak, & Stanovich, 2008). There are indications that this can be taught, which benefits those learning how to make appropriate and the best decisions in various situations (Nokes &Hacker, 2007).
People make decisions about many things, from political decisions, personal decisions, including medical choices, romantic decisions to career decisions, and financial decisions, which may also include some of the other kinds of decisions and judgments. Quite often, the decision-making process is fairly specific to the decision being made. Some choices are simple and seem straight forward, while others are complex and require a multi-step approach to making the decisions.
The present article will address decision making, in the context of types of decisions people make, factors that influence decision making, several heuristics commonly researched and utilised in the process of decision making. Furthermore, we will explore what happens after the decision is made, as well as how present decisions impact future behaviour and decision making.
Factors that Influence Decision Making
Several important factors influence decision making. Significant factors include past experiences, a variety of cognitive biases, an escalation of commitment and sunk outcomes, individual differences, including age and socioeconomic status, and a belief in personal relevance. These things all impact the decision-making process and the decisions made.
Juliusson, Karlsson, and Garling (2005) indicated past decisions influence the decisions people make in the future. Indeed, when something positive results from a decision, people are more likely to decide similarly, given a similar situation. On the other hand, people tend to avoid repeating past mistakes (Sagi, & Friedland, 2007). This is significant to the extent that future decisions made based on past experiences are not necessarily the best decisions. In financial decision-making, highly successful people do not make investment decisions based on past sunk outcomes, rather by examining choices with no regard for past experiences; this approach conflicts with what one may expect (Juliusson et al., 2005).
In addition to past experiences, several cognitive biases influence decision making. Cognitive biases are thinking patterns based on observations and generalisations that may lead to memory errors, inaccurate judgments, and faulty logic (Evans, Barston, & Pollard, 1983; West, Toplak, & Stanovich, 2008). Cognitive biases include, but are not limited to belief bias, the over-dependence on prior knowledge in arriving at decisions; hindsight bias, people tend to readily explain an event as inevitable, once it has happened; omission bias, generally, people have a propensity to omit information perceived as risky; and confirmation bias, in which people observe what they expect in observations (Marsh, & Hanlon, 2007; Nestler. & von Collani, 2008; Stanovich & West, 2008; see also West et al., 2008).
In decision making, cognitive biases influence people making them over-rely or lend more credence to expected observations and previous knowledge while missing relevant information or observations, and without looking at the bigger picture. While this influence may lead to poor decisions sometimes, the cognitive biases enable individuals to make efficient decisions with the assistance of the heuristic.
Furthermore, some individual differences may also influence decision making. Research has indicated that age, socioeconomic status (SES), and cognitive abilities capable to influence decision-making (de Bruin, Parker, & Fischoff, 2007; Finucane, Mertz, Slovic, & Schmidt, 2005).
Age is only one individual factor to influence decisions. According to de Bruin et al. (2007), people in lower SES groups may have less access to education and resources, which may make them more susceptible to experiencing negative life events, often beyond their control; as a result, low SES individuals may make poorer decisions, based on past decisions.
Over and above past experiences, cognitive biases, and individual differences; another influence on decision making is the belief in personal relevance. When people believe what they decide matters, they are more likely to decide. Acevedo and Krueger (2004) examined individuals’ voting patterns and concluded that people will vote more readily when they believe their opinion is indicative of the attitudes of the general population, as well as when they have a regard for their importance in the outcomes. People vote when they believe their vote counts.
Decision Making Heuristics
Heuristics are decision-making strategies that people use and they are like little information. heuristics are mental shortcuts that reduce the cognitive burden associated with decision making (Shah & Oppenheimer, 2008). Shah and Oppenheimer argued that heuristics reduce work in decision making in several ways. Heuristics offer the user the ability to scrutinise few signals and/or choices in decision making.
As a result of many research, cognitive psychologists have outlined a host of heuristics people use in decision making. Heuristics have a range from general to very specific and serve various functions. The price heuristic, in which people judge higher-priced items to have higher quality than lower-priced things, is specific to consumer patterns; while the outrage heuristic, in which people consider how contemptible a crime is when deciding on the punishment (Shah, & Oppenheimer, 2008).
After the Decision
After a decision is made, people experience a variety of reactions and the current decisions influence future decision making. Several of the outcomes that may result from a decision are regret or satisfaction; both of which influence upcoming decisions.
Regret, feelings of disappointment, or dissatisfaction are potential outcomes after a decision making is got and regret may shape the decision-making process. According to Abraham and Sheeran (2003), anticipated regret is the belief that the decision will result in inaction. Anticipated regret may prompt behaviour. In fact, when a person indicates they will do something, such as exercise, they may do it only to avoid regrets. Once the decision is made, the impact of the decision, if regret is experienced, will impact future decisions. People can often get consumed with examining the other available options; the path not taken (Sagi & Friedland, 2007).
Sagi and Friedland (2007) theorised people feel regret in regards to how the decision was made; regret may be dependent on the number of options that were available during the decision-making process; and how varied the options were may impact how regret is experienced after the decision was made. Through a series of experiments, Sagi and Friedland concluded that people feel remorse because they feel they were able to make a better choice by looking at more information, previously disregarded, and carefully weighing the pros and cons of each choice. Also, regret is magnified when individuals revisit the other available options and considering what satisfaction the other option would have brought them. Interestingly, people who are dissatisfied with their decision feel obligated to embrace the decision, reducing anxiety regarding the quality of the decision.
In addition to regret, individuals may also experience positive satisfaction after their decisions. Satisfaction refers to how pleased the decision-maker is with the outcome of the decision. Botti and Iyengar (2004) observed individuals prefer to make their own decisions and believe they will be more satisfied with their choices; however when people are given only undesirable options, decision-makers are less satisfied than those who have had the choice made for them. Botti and Iyengar explained that the decision-maker assumes responsibility for the decision made. As a result, if the available choices are bad, they may feel as though they are responsible for making poor choices.
An Innovative Decision-Making Approach
Decision making is a critical aspect of feeling successful and happy in life. It is important to develop effective decision-making skills and strategies. Problem-solving strategies include, but are not limited to brainstorming, cost-benefit analysis, written remediation plans, and an examination of possible choices (Wester, Christianson, Fouad, & Santiago-Rivera, 2008). The decision-making process can be complicated and overwhelming. As a result, it is valuable for individuals to learn a model to follow, that may be applied to everyday decisions, as well as life-changing choices.
Krantz and Kunreuther (2007) posited that a goal and plan based decision-making model is an effective and sound approach to take in decision making; in this model, the individual is encouraged to focus on goals, not happiness or usefulness. According to Krantz and Kunreuther, plans are designed to meet one or more goals. That is, people make plans to meet the goals unconsciously or consciously and, some plans satisfy several goals.
Conclusion
Decision making is an important area of research in cognitive psychology. Understanding the process by which individuals make decisions is important for understanding the decisions they make. Several factors influence decision making. Those factors are past experiences, cognitive biases, age and individual differences, belief in personal relevance, and an escalation of commitment. Heuristics are mental shortcuts that take some of the cognitive load off decision-makers. After an individual makes a decision, there are several differing outcomes, including regret and satisfaction. Reversible decisions are more desired, and people are willing to pay a premium for the ability to reverse decisions; though reversibility may not lead to positive or satisfactory outcomes. Cognitive psychologists have developed many decision-making models, which explain the process by which people effectively make decisions. One innovative model is based on goals and planning. There is yet a lot of research to be conducted on decision making, which will enable psychologists and educators to positively influence the lives of many.
