(Economic) decision making and emotions seem not to mix. Homo oeconomicus is a cold, emotionless computer of utility. Always maximizing, and when endowed with all information always finding the optimal course of action, be it which house or car to buy or what ice cream to pick at the gelato house. That is simple decisions that involve comparisons of only a few or just one characteristic of the available choice options as well as complex decision problems that involve a high dimension of interdependent characteristics all invoke the same process: Conscious optimization.
And that ain’t true.
In “How we decide” Jonah Lehrer explores the cognitive and emotional side of decision making. Following the standard recipe of popular science books Lehrer introduces the reader to a number of different case studies – or anecdotes – to show how emotions allow us to decide at all, how and under what circumstances emotions and subconscious deliberations help improving our decisions and how and when emotions impair our decision making. All the anecdotes are accompanied by brief explanations of the underlying mechanisms inside the brain, the underlying neuroscience.
Lehrer’s narrative is clear and intriguing as he – as so many others before him – understands to arrest his readers’ attention by counterintuitive advice. For instance, complex problems are solved best by not contemplating about every detail and carefully considering all dimensions of the decision problem. We tend to get our “decision weights” wrong and focus on the wrong characteristics (like the size of the house instead of the length of the daily commute). Letting the subconscious mind work on the problem and than pick what feels right will often result in a better long-term choice in such complex decision problems. Simple choices, however, can benefit from actual, conscious, optimizing behavior.
“How we decide” is a well balanced, instructive text. It might get you interested in neuroscience and its close relative neuroeconomics…