How to make better decisions

By Garth Sundem

With Valentine's Day around the corner, don't trust your instincts
when it comes to selecting a mate. Human decision making is seriously
flawed - but it can be fixed with a few simple sums.

Be warned: this article deals primarily with shark attacks, the
lottery, beer, and how to get a date using mathematics. Is it
a good decision to keep reading? Unfortunately, the answer is
"you need to keep reading to find out."

Sound irrational? Good - your massively irrational mind should
have no problem with it, then.

Consider this: every year in the United States, when the Discovery
Channel broadcasts "Shark Week" visits to Florida beaches
decline. Presumably, the network's programming makes the waters
no less safe (assuming sharks are not, if fact, empowered by cable
television).

Should you invest £2 a day or use it to buy lottery tickets?
Maths makes the decision obvious

Garth Sundem

However, after watching a week of kicking legs seen from below,
the idea of shark attack is refreshed in our minds and we choose
not to offer ourselves as bait. This phenomenon is known as an
availability heuristic - our rationality is subverted by easily
available sensationalist images.

On the sunnier side of the availability heuristic is the lottery.
Should you invest £2 a day or use it to buy lottery tickets?

Maths makes the decision obvious. Suppose you invest two quid
every day at the reasonable rate of 10%. It will take you almost
exactly 50 years to accumulate £1m. To earn this same £1m
in the National Lottery, you would (on average) have to match
five numbers and a bonus ball, at odds of 2,330,635-to-1.

If you spent two quid a day for 50 years you would total just
over 36,500 tickets and would thus have only a 1-in-63 chance
of making that million pounds. However, the available image of
immediate wealth subverts this rationality.

Beer rating secret

Alphabetically, the availability heuristic is only the first
in a long line of psychological mechanisms that lead us into bad
decisions. Imagine - if you will - beer. See, wasn't that nice?

Beer bottles

Which beer do you like best? The most expensive (and least dusty)

At your local pub, you have many beers to choose from. Which is
best? If you are like most human beings, the answer is "the
most expensive one." A number of studies have shown that
by switching price tags, you can switch preferences (for obvious
reasons, this is a favourite experiment among university psychology
students).

And what about the power of suggestion?

Imagine I handed you a cup of hot coffee and then asked your
opinion about a person whom you had recently met; now suppose
I instead handed you a cup of ice-cold soda. Experiments show
that your opinion of this person would be different because you
have been primed to feel warmth or coldness.

Add to the list...

* framing (how you present data is as important as the data
itself)

* impact bias (overestimation of possible outcomes),

* confirmation bias (recognising only data that supports your
hypothesis)

* loss aversion (we stand to gain more than we would lose, but
our fear of loss prevents us)

* selective perception (seeing what you want to see),and

* rosy retrospection (integral to the repeated experience of family
Christmas)

...and you seem doomed to blunder through life led by your brain's
clumsy irrationality.

Is there any hope for the human race? In the example of the lottery,
mathematics offered incontrovertible rationality. Might we be
able to apply mathematics to other situations, as well?

Errol Brown

The secret to Errol's smile? A hot cup of tea

A rudimentary attempt at this is the list of plusses and minuses,
in which one lists the positive aspects of a decision on one side
of a chart and the negative aspects on the other, and then weighs
these against each other as if on a scale (the heavier side wins).

To add a layer of mathematics, if one factor on the list is more
important than the others, we might multiply it by two. If it
is very important, we could even square or cube it.

Suppose you were sitting in the aforementioned pub, drinking
the aforementioned beer (perhaps while holding the aforementioned
lottery ticket and worrying about the aforementioned shark), while
sneaking peeks at a beautiful woman sitting at the bar. What do
you think would influence your chance of success with this woman?

It will certainly help if you are attractive - especially in
comparison to her (you might say your chances increase in direct
proportion to your looks/her looks); it will also help if you
are a witty conversationalist and willing to pursue the interaction
aggressively, and hurt your chances drastically if she already
has a boyfriend (esp a large one).

Putting this into an equation, we could come up with the following
(W=Witty, G=Aggressive, Ay=Your Attractiveness, AH=Her Attractiveness,
R=Her "Amount" of Current Relationship; all variables
from 1-10 with 10 being high):

Equation

You would, of course, have to evaluate the results on some type
of scale, like the one here:

* If ASK is less than zero you should lower your standards

* If ASK is between zero and 1, you have exactly a snowball's
chance in hell with her

* If ASK is between 1 and 10, game on!

* If ASK is greater than 10, consider her more attractive friend
instead

In practice, using this equation (and equations in general) to
make decisions can have an interesting secondary effect. As described
by the Heisenberg Uncertainty Principle, by introducing tools
to measure a situation, we can affect the situation itself.

To whit: one of my university students decided to apply this
equation to calculate his chances with Girl X Of His Dreams. Alas,
the equation predicted little hope.

However, Girl X Of His Dreams was flattered that said student
had cared enough to calculate his chances (an endearing display
of vulnerability, perhaps?), and they ended up having dinner.

Beware, though - as described by the Uncertainty Principle, the
introduction of this tool could easily have had negative consequences,
turning a calculated sure thing into no chance at all (if the
girl had decided that anyone who uses an equation to determine
their chances at love was decidedly creepy). The moral is, perhaps
equations can help you make decisions, as long as no one sees
you doing it.

Garth Sundem is an American professor and author of the book
Geek Logik: 50 Foolproof Equations for Everyday Life. He demonstrates
his ideas in Horizon on BBC Two at 2100GMT on Tuesday 12 February.

**How
to make better decisions**