An examination of what drives us to choices, how we choose options, and how to be happy with our choices. Based on psychologists and behavioral economists such as Dan Pink, Dan Ariely, and Dan Gilbert.

1. ChoiceForesight, Hindsight & Happiness Erik Ralston BIS Birds of a Feather January 20th, 2011 1

2. Sources Dan Pink – Drive: The Surprising Truth About What Motives Use 2 Dan Ariely – Predictably Irrational: The Hidden Forces That Shape Our DecisionsProfessor Duke University Dan Gilbert – Professor at Harvard University

3. Sources 3 Malcolm Gladwell – Blink and Outliers Barry Schwartz –The Paradox of Choice: Why More is Less Sheena Iyengar – Professor at Columbia University

4. Do I Make My Own Choices?(Do I Have Free Will?) 4

5. The Power of Defaults 5

6. What drives Choices? 6

7. Motivation! The Drive to Decide Excluding genuine need (or marketing), we need rewards Extrinsic Rewards are the most common motivators Better Pay = Better Work? Only for basic tasks, for complex tasks one must rely on… 7

8. Autonomy 8 Freedom to choose of all options

9. Mastery 9 A challenge that culminates in achievement

10. Purpose 10 Importance and high impact consequences

11. A.M.P. it UP! A.M.P. is better than any external motivator A.M.P. is best harnessed in hobbies and startups Are intrinsic motivators possible at work? Not usually… Management prevents Autonomy Efficiency prevents Mastery Interchangeability prevents Purpose 11

12. What Can I Choose? 12

13. Recognizing Choices Choosing which choices are even possible Information is always processed as an abstraction and only in contrast creating greatest opportunity for bias Selection Bias Primacy Effect Recency Effect Our first decision is often to assume the choice matters Impact Bias 13

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17. The Paradox of Choice Intuition leads us to think more choice is better, but… More choices = more viable paths to happiness? There must be a perfect choice Analysis of all available choices is exhausting! Variety is not the same as autonomy! Variety is not the same as quality! More opportunities = more missed opportunities = regret! Try to remember: Perfect is the enemy of Good 17

18. Bias In Action If there's a bustle in your hedgerow, don't be alarmed now, it's just a spring clean for the May queen. Yes there are two paths you can go by, but in the long run there's still time to change the road you're on. 18 Oh here's to my sweet Satan. The one whose little path would make me sad, whose power is Satan. He'll give those with him 666, there was a little toolshed where he made us suffer, sad Satan

19. How Do I Choose? 19

20. Foresight Predicting outcomes of a particular path Of all animals, humans have the best foresight We are still not very good at it We can’t predict about choices we can’t recognize 20

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22. Axiomatic Foresight Literal application of “Rules” interpolating between instinct, advice, or limited experience Only requires memory and conditioning 22

23. Simulated Foresight Complex simulation of outcomes in the mind extrapolating from previous experience Odds of Gain x Value of Gain = Rational Cost Requires experience and a pre-frontal cortex 23

24. How Can I Make GoodChoices? 24

25. Morality Morals are emotional, and often instinctual, systems for regulating decisions A different concept of optimum away from utility Harm/Care - Impact of decisions on welfare of others Fairness/Reciprocity - Level of equal benefit Ingroup/Loyalty - Benefit to members of my group Authority/Respect - Compliance with leaders Purity/Sanctity – Compliant with norms www.yourmorals.org 25

26. Blink vs. Think Some decisions are instantaneous, some arduous We always blink, but don’t always think Experience and practice = speed and accuracy Size of consequences multiples required consideration Unless you are an expert, thinking is dangerous! 26

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28. Making Good Choices Even preferences need experience to discover Blink preference is different than think preference Blink preference is often better Only rely on “Expertise” if the person is really an expert And consult experts for big decisions 28

29. How Can I Make Happy Choices? 29

30. Hindsight The feelings evoked when thinking about past decisions Could be satisfaction, regret, ambivalence, etc Transient experiences better convert into rosy memories than permanent objects If you must choose between new furniture and a vacation Irreversible decisions made without alternatives are easier to live with than 30

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32. Hindsight Isn’t 20/20 Natural Happiness – “Getting What You Want” Synthetic Happiness – “Wanting What You’ve Got” Better than just rationalization and it happens much lower in the brain than memory & reasoning Still unhappy? Just remember that you will forget About 3 months erases mundane regret 32

33. The Secret to Happy Decisions Lower your expectations Don’t expect perfection Blink Don’t Think (Unless it’s REALLY Important) Sharp contrasts, instant connection, and economical decision-making time Accept the things you cannot change Permanence forces acceptance Forget the things you cannot accept 33

34. Questions? 34

35. Thank You! 35