Rational Decision Making Study Guide (page 2)

Updated on Sep 19, 2011


If you discover that your emotions do get in the way of solving a problem, use them as a learning tool. Study what triggered a particular emotion so you can prevent it from getting in the way of reasoning in the future.

Bias and Stereotyping

Biases are preferences or beliefs that keep someone from being impartial or fair-minded. Stereotypes are generalized opinions or prejudiced attitudes about a group of people. Having a bias or stereotyping people keeps you from having an open mind and gets in the way of making logical decisions as you solve problems. You need to recognize and control your emotions, rather than letting them control you.

Here are two examples:
  • Bias: Marta is a member of the town council. This week she must vote on a proposal that will bring much-needed revenue to the town, but will significantly reduce her friend's property value. The friend supported Marta's run for office and contributed to her campaign. Marta's bias is her feeling of loyalty toward her friend. If Marta votes "no" on the proposal, she will make her decision based on friendship, not on the best interest of the town she was elected to serve.
  • Stereotyping: A study was done of a certain doctor's habit of writing prescriptions for painkillers. It found that 75% of the prescriptions were written for male patients, although the doctor's practice was 50% male and 50% female. When asked about the discrepancy, the doctor remarked, "Females have a lower pain threshold. They should tolerate pain better, and stop relying on drugs." This doctor stereotyped women as being weaker and so their complaints of pain weren't as valid as men's. His stereotyping prevented him from making logical decisions and from adequately treating half of his patients.


Ask yourself, "How would I feel about this if I weren't letting my own views and beliefs affect my thinking?"

Making Decisions Under Stress

Stress can affect both physical and mental health, affecting the ability to think critically, solve problems, and make sound decisions. There is no way to control every potentially stressful situation that we may encounter; time pressures at work, lack of information, information overload, and aggressive individuals are things that we have to deal with from time to time whether we want to or not. What we can control is how we deal with stress and how we let it affect us.

When you are under too much stress, or you don't deal with the stressors that are affecting you, it will affect the way you make decisions. Some of the most common effects are:

  • Inability to recognize or understand a problem. When stressed, it is difficult to access stored information quickly, if at all. Short-term memory is affected. You may incorrectly identify something as a problem when in fact it is not.
  • Difficulty brainstorming and setting reasonable goals. When you do not accurately recognize the problem, and you have trouble concentrating, you may come up with a quick or irrational solution. You tend to think only about the immediate future, so planning is difficult and decisions are often made quickly.
  • Inability to assess the solution. If you are having trouble taking in information, you will not be able to see if your solution works. A short-term view of everything may keep you from being concerned with the implications of your solution.

Taking part in an auction is an example of decision making under stress. Imagine that two people are interested in the same 100-year-old china plate. They've both seen the same kind of plate at other auctions and in antique shops, selling for about $50. So the two shoppers set a limit, even if only in their minds, of the price they're willing to pay for the plate. Then, the bidding begins. When several people want the same item, excitement builds and stressed bidders can be carried away by "auction fever." The winning bid could be over $100, more than double what the two bidders know the plate is worth. Reason and logic, when faced with stress, take a back seat to emotion.

How could both people have eliminated the stress and bid reasonably? They could have done just one simple thing: recognize what they could control, and exercise control over it. In this case, they could have set a price they wouldn't go over before the auction began, and stuck to it. But what about a more complicated issue, like refinancing a mortgage?

Barb filed refinancing papers three weeks ago and set a date for the closing. When she arrived at the closing, the loan officer told her that the interest rate had gone up a point, so she'd have to pay a higher rate. In this very stressful situation, Barb must make a decision. If she allows stress to take over, she'll probably do one of two things: tell the loan officer to forget it, or say nothing and continue with the closing even though the rate is higher. But if Barb recognizes what she has control over, she'll ask questions before making any move. For example, she could ask, "How does this rate compare with the one I'm already paying? What will my new payment be, as opposed to my old one? Can you waive the closing costs to help me save money?" In this situation, taking control means getting information.

A good rule to follow is this: Don't act until you understand the situation. Even if you're stressed, you can check your emotions and make good decisions.

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