Want to make superior decisions?
I have a fairly old Android phone and I’m thinking about getting a new one. But there areso many choices! Should I stick with Android or consider an iPhone? If I continue with Android, should I go for Sony, Samsung, HTC or one of the newer players such as Xiaomi perhaps? What size of screen do I want and how much do I want to pay?
Psychologists would say that I’m faced with choice overload. Choice overload can make it difficult for us to choose well whether we’re thinking about buying a car, a house, a new tablet or anything else where there may be many options.
Often, it’s easier to make a decision when there are fewer options rather than very many.
But a new experiment by Georgia Institute of Technology researcher Tibor Besedes suggests a novel way of cutting down on the overload and helping us to make better decisions. He asked one group of participants to evaluate 16 complex health care packages and offered them a 25 dollar incentive for choosing the best one. And yes, there was a right answer: one health care deal was slightly better than the others. These participants evaluated all 16 packages at the same time.
He also asked another group of participants to evaluate the 16 health care packages by looking at smaller groups of 4 at a time. Once these participants had identified a winner amongst each of the groups of 4, the participants were then asked to consider all 4 semi-finalists in one final comparison.
The study found that participants using the second method were 50 per cent more likely to identify the best package and claim the 25 dollar prize.
When faced with many choices, tournament-style decision-making seems to help us to make better decisions.
So if you want to make better decisions, try the following approach:
1. Divide however many options you have into piles of four.
2. Choose a ‘semi-final winner’ from each pile.
3. Put all of the semi-final winners into a new pile.
4. And finally, compare the semi-final winners against each other to choose your best option.
The next time you have to weigh up lots of complex choices, give this method a try and let me know how you get on!