Decisive Moment - How do we make decisions?

Making good decisions is something of a black art. It takes years of practice, and still it can be quite difficult to explain the mechanics behind it. In the end, our best decisions are a finely tuned blend of feeling and reason, where the precise mix depends on the situation. And with Jonah Lehrers book ''The Decisive Moment'' we become a little wiser on exactly how the brain makes up its mind.
Still, when there is so much to learn, obviously, one book can only take us so far. But this book is a good place to start. And takes us through at least some of the issues involved in human decision making:
a) Limbic impatience.
b) Framing.
c) Loss aversion.
d) Mental accounting.
e) The achoring effect.
f) Rational vs. emotionalprocessing.
g) Outsourcing of decisions.

Limbic Impatience

Understanding the brain circuitry of temptation is one of the practical ambitions of scientists studying decision making. Jonathan Cohen, a neuroscientist at Princeton University, has begun to diagnose the specific brain regions responsible for our attraction to credit card and subprime loans. Putting people inside a fMRI machine he could see that when subjects contemplated long term consequences for their actions, rational planning areas of the brain, such as the prefrontal cortex region, were more active. But when subjects thought about satisfaction here and now, brain areas associated with emotion were more active - such as the midbrain dopamine system and nucleus accumbens. Cells that tell a person to take a morgage (he cant afford) and run up credit card debt, damned be the future. I.e. Cohens study locates the neural source for many financial errors. When self control breaks down, and we opt for rewards we cant afford, it is because the rational brain has lost the neural tug of war. The emotional brain is very impatient. When it wants something - it wants it now.

Framing

People are more likely to buy meat, when it is labelled 85% lean, instead of 15 % fat. And twice as many patients opt for surgery, when told there is an 80 per cent chance of survival, instead of 20 percent chance of dying.
Inside the fMRI machine one can see an activated amygdala whenever a person thinks about losing something. So, framing a question in the direction of loss activates the amygdala and warps the decision towards not taking risks.

Mental accounting

People tend to think about the world in terms of specific accounts. It helps us think faster, but unfortunately, it also introduces new errors. Richard Thaler, economist at the university of Chicago, has investigated mental accounting at work: When he asked people: If they would save 5 dollars on a 15 dollars calculator by driving 20 minutes to the other end of town - 68 percent said yes, they would do that. However, only 29 percent would drive 20 minutes to save 5 dollars on a 125 dollar leather jacket. The same principle goes for luxury hotels charging 6 dollars for a can of peanuts etc. Inside a larger budget it doesnt matter - According to Thaler: ''We have a slow, erratic CPU, and we are busy with other stuff - the prefrontal cortex can only handle about seven things, so we have to bundle things in order to make life manageable''.
We dont have the computational power to process it smarter.
Indeed, to much information is a huge distraction. As the brain has a lot of trouble ignoring irrelevant information.

Rational vs. Emotional processing

So, a lot of the extra information just gets in the way. And often people can perform much better with less information. Another problem is our bad understanding of when we are doing emotional reasoning, and when we are being rational. Finding the right balance, where our emotional centers handles the enormous complexities of daily life and rational centers help us guide the emotions - isnt all that easy.
Instead, people can easily fall into the trap of spending to much time (with their rational centers) on thinking about unimportant minor things. Ignoring that, the prefrontal cortex isnt a place that can handle to much complexity by itself.
Loss aversion and limbic impatience is the other way around, with too much emotional control. People also tend to confuse what decisions are actual rational decisions and what are emotional decisions! It goes back to Kant. Where Kant and other philosophers thought that morality were based on the rational brains thinking. It turns out not to be the case. Confronted by ethical dilemmas the unconscious (emotional) mind generates an answer, which it then interpreted by rational brain centers.
With the human ethical decision system in the hands of the emotional subconscious system, what the rational system actually does is working like a lawyer. It makes the emotional reaction seem reasonable (Psychologist Jonathan Haidt have made some rather startling examples about sibling sex, dog eating families, etc.,that demonstrates how emotions have decided what is right and wrong long before rationality have hada chance of stepping in).
And that human behaviour isnt rational should come as no surprise. Take altruism. It feels good to do acts of charity. From the perspective of the brain it is much better to give (to the group) than to receive. People are programmed to care about each other. And feel each others pain. Sympathy is one of humanitys most basic instincts. The brain is filled with mirror neurons and brain areas that can theorize about other minds.
Same thing goes for monkeys - in one experiment with rhesus monkeys they would receive food by pulling a chain. But with a terrible side consequence - a separate monkey in a different cage was then given a painful jolt of electtricity. All the other monkeys saw what happened
- And all the other monkeys were willing to settle for less food, as long as their fellow monkey wasnt hurt. Some monkeys actually stopped pulling for food - starving themselves for many days, so that the monkey they didnt know wasnt hurt.
Hardly, rational monkeys?

Outsourcing of decisions

Economists also assume that humans are more rational than they actually are. In a typical line of reasoning they assume that shoppers do a rational cost benefit analysis of a certain items price and expected utility.
But studies have shown that it isnt always the case. Instead, it has been demonstrated that the brain outsource these decisions to the emotional brain: The nucleus accumbens (Nacc) is activated according to our desire for a particular object. And the insula produces aversive feelings when we think about the amount of money the item will cost us.
By measuring the relative amount of activity in each brain center, scientists could predict the shoppers decisions, before people themselves did. Pleasure vs. pain tells you want to buy.

The default state of the bain is indecisive disagreement. Various brain parts are constantly insisting that other parts are wrong. Making up your mind is all about ignoring annoying fears and nagging suspicions. Still, the brain should keep on tracking dissonant data - Failing to respond to dissonant data can lead to disastrous results. According to Jonah Lehrer, we should force ourselves to think about data that disturbs our entranched beliefs. When we start censoring our minds, turning off those brain areas that contradict our assumptions, we end up ignoring relevant evidence.
In a final piece of advice concerning making good decisions. Mark Jung-Beeman has shown that people in a good mood are considerable better at solving hard problems, than people who are cranky or depressed. He speculates that this is because brain areas associated with executive control arent preoccupied with managing emotional life. Happy people aren't spending cognitive resources on why they aren't happy. And complex problems needs all the resources they can get:
Use the conscious mind to acquire all the information needed for a decision, and then go on holiday, while your unconscious mind digest the information, and come up with the solution.

-Simon