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Second thoughts - the science of decision making

Are you a rational person? Do you make choices based on appraisal of the facts and careful consideration of probability and statistics?

 thoughts

The science of decision making has attracted a huge amount of study and generated lots of publications, some of which have become best-sellers. Blink, by Malcolm Gladwell, examined the role of intuition and split-second decision making. Thaler and Sunstein's Nudge looked at ways we can improve public health through 'behavioural economics'. And functional magnetic resonance imaging (MRI) has provided so many insights into the way we think that it has spawned a science in its own right – 'neuromarketing'.

Thinking, Fast and Slow is a new book that takes the debate above the level of popular science, not least because it is written by Daniel Kahneman, a Nobel prizewinning professor who specialises in the psychology of judgment and decision making. What makes it more compelling is that it is a synthesis of decades of research into cognitive science, including the books mentioned above. And it yields some revelatory conclusions that all of us involved in marketing or communications should be aware of.

For some time it has been accepted that decision making is not a strictly rational process, but has a large emotional component. This book shows exactly how irrational (or non-rational) our thought processes are. One of the chief findings is that human beings employ two distinct but complementary modes of thinking. Kahneman calls these (with impressive economy of imagination) System 1 and System 2. 

System 1 works as the auto-pilot of the mind, making sure all is OK in the world around you and constantly evaluating situations requiring rapid decisions: Is that red circular object in front of me growing in size, or has someone thrown a cricket ball at my head? This decision making is largely unconscious, which is why we instinctively duck rather than calculating the trajectory and consequences of impact. System 1 is good at making off-the-cuff decisions using mental shortcuts ('fast and frugal heuristics'), but it is not always correct or accurate. 

That's where System 2 comes in. System 2 is what we engage when solving problems requiring in-depth analysis. It is slow, methodical and usually rational. The problem is, this kind of thinking requires effort - and the brain is inherently lazy. System 2 delegates most of the heavy lifting to the ever-ready System 1, and then spends time and effort post-rationalising its poor judgement. We convince ourselves that System 2 is our dominant mode of thinking, but most of the time it's AWOL.

Judgement call
A recurring theme of the book is that our assessment of risk and probability is very poor. This leads to overconfidence and cognitive illusions. When there is a high probability of gain, people are risk averse; when there is a high probability of loss, they are risk seeking. They reverse these positions when the probability of gain or loss is low. And worryingly, they will change their choices depending on how they are framed.

Even scientists and healthcare professionals are guilty of major errors in thinking. When designing and interpreting studies, they overlook the distorting effect of sample size, they disregard the need for an external reference, and they ignore the phenomenon of regression to the mean.

There are ways of adding rationality to decision making. Algorithms, expert protocols and clinical guidelines are superior to individual judgement. But 'organised decision making' (and decision making bodies) is still subject to bias.

Of course emotion is a more powerful element in decision making. An emotionally weighted event (such as the risk of cancer or survival of a premature baby) is assigned much greater importance than common events with less emotional impact.

Another key point is that memory distorts perception. Our recall of a past event is dominated by the peak intensity of the experience and its conclusion, not the totality of the experience. 'Happy endings' alter our memory of an unpleasant event. This may explain why women choose to have large families despite the pain of childbirth. Also, people think of life as a series of stories – events are more powerful when presented in narrative form.

How can those of us in healthcare marketing and advertising use this information? First of all, it helps us to understand the controlling forces that affect all human beings, including doctors. Fundamentally, we all want an easy life, so we strive for the condition of 'cognitive ease'. That means we favour ideas that come easily to mind, that support our current beliefs, and that don't overtax our brains.

Messages are more persuasive if they are easily legible, simply stated, and memorable. This engages System 1 thinking. However, if we want to challenge or change people's thinking and behaviour, we need to provoke 'cognitive strain' by mobilising System 2. Contrary to the findings of market research, negative messages can be more powerful than positive ones, because people are motivated to mitigate losses.

Advertising is about influencing choice and decision making, so we operate in the gap between System 1 and System 2. If you have a market leading brand, you may want to encourage System 1 thinking to foster cognitive ease and reinforce current behaviour. For challenger brands it may be better to switch people to System 2 and encourage cognitive strain, so they think twice about their prescribing decisions. We can also utilise phenomena like priming, framing and anchoring to influence people's behaviour.

To summarise the findings of Thinking, Fast and Slow:

  • Humans are not rational agents, however intelligent or well educated they are
  • We regularly make non-rational decisions, which we post-rationalise even when confronted with the facts
  • Memory distorts perception
  • Emotion trumps logic.

But for the whole picture, read the book. It gives real insight into the way people think, which can provide a major competitive advantage.

Article by
Reg Manser

creative director at Life Healthcare Communications and can be reached at reg@life-healthcare.com

9th October 2013

From: Marketing

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