Authors: Katherine L. Milkman, University of Pennsylvania; Dolly Chugh, New York University; Max H. Bazerman, Harvard University
Publication: Perspectives on Psychological Science
Focus Area: Decision making, Prevention
Relevance: While prevention efforts cannot ensure that people make the correct decision, strategies to improve the decision-making process are valuable assets in improving outcomes. When is intuition detrimental and when is it valuable to decision making? Of particular interest in fraud prevention are techniques to address biases that people do not want to admit or believe about themselves.
Summary: Bad decisions are expensive and people want to avoid them, but there has not been enough academic work on strategies to improve decision making.
- Good decisions are those that the decision maker “would regard as the right choice regardless of whether she was evaluating her own decision or someone else’s.”
- The authors propose a model of decision making that involves two systems; one, the intuitive, fast, emotional system and two, the deliberate, slow, logical reasoning system.
- In cases when system one leads to biases that undermines good decision making, strategies to actively incorporate rational thinking can improve outcomes. Alternatively, decision-making situations can be altered to account for emotional biases – especially in situations where people do not want to admit or believe their own biases (i.e. racial bias).
Author Abstract: The optimal moment to address the question of how to improve human decision making has arrived. Thanks to 50 years of research by judgment and decision-making scholars, psychologists have developed a detailed picture of the ways in which human judgment is bounded. This article argues that the time has come to focus attention on the search for strategies that will improve bounded judgment because decision-making errors are costly and are growing more costly, decision makers are receptive, and academic insights are sure to follow from research on improvement. In addition to calling for research on improvement strategies, this article organizes the existing literature pertaining to improvement strategies and highlights promising directions for future research.