Making a Decision: Mental Models + Notion Templates
Decision-making is a process (or a necessity) that occurs whenever we find ourselves at a point in which our current and desired states do not match. There is a gap to be explored. And a decision to be made. Proper decision-making calls for open-mindedness, integrative thinking, trade-offs, self-awareness of our own biases. Decision-making can become a skill if practiced deliberately and mindfully, which can get better with experience.
As Daniel Kahneman reminds us in his book Thinking, Fast and Slow, there are two main macro-areas in our brain driving our behaviors and decisions: the limbic system (system 1) and the prefrontal cortex (system 2). System 1 (limbic system) is the more primitive, impulsive side of the brain, which comes into play instantly whenever we face novel situations, and that acts quickly, without processing information. System 2 (prefrontal cortex) is the "slow thinking" part of our brain. It is the system that comes into play after system 1, attempting to employ rationality, reflection, context. The problem with both systems 1 and 2 is that they are subject to bias and systemic flaws. The limbic system is wired toward survival and acting fast to avoid danger or death. The prefrontal cortex is "rational", a limited capacity packed with cognitive bias, cultural and social norms, the past, the future. In decision making, there are two frameworks developed to depict our decision process: the rational decision-making model, and the bounded rationality framework.
The rational decision-making model is the oldest model for decision-making. According to this framework, we make decisions following logical thinking and rationality, hence maximizing our chances of making the most optimal decisions. This model of decision making identifies six main steps to decision making (Tan, 2020):
- Define the problem
- Identify the decision criteria
- Allocate weights to the criteria
- Develop the alternatives
- Evaluate the alternatives
- Select the best alternative
As a consequence of the complete rationality depicted by the model, decision-makers are assumed to have complete information available, hence free will, and they pick the option with the highest utility.
The bounded rationality decision-making model tries to explain the human mind in action when making decisions accounting for our mental, time, and resource limits. For one, bounded rationality postulates that we satisfice in making decisions. Namely, we make decisions that are "good enough". This is because we are not actually aware of all the options out there, and, as a consequence, we simplify the complex problem at hand by reducing it to a level that can be more easily understood. We play the game of decision-making within the confines of bounded rationality (Tan Lydia, 2020), choosing the first, most acceptable alternative.
In making decisions, your own mind may be your worst enemy.
— THE HIDDEN TRAPS IN DECISION MAKING | HBR