This is the first in a series of posts on how we make decisions, what causes some of our biases, and what we can do to make better choices.
HOW WE DECIDE
We typically make decisions with a particular goal in mind. Maybe it’s the choice of a new car, deciding to purchase a home, switching jobs, or making a financial investment. Most of the time, we rely on the past to predict the future.
According to Daniel Kahneman, Nobel Prize Winner in economics and author of Thinking, Fast and Slow, our actual past experience is not the same as how we remember it. This is due to what he calls the “Peak-End” Rule.
In a 1996 landmark study, Kahneman and Donald Redelmeier conducted research on individuals undergoing a colonoscopy to better understand how individuals remember past experiences. At the time, a colonoscopy was far more uncomfortable than the typical procedure today.
Participants in the study were divided into two groups. Both underwent a standard colonoscopy procedure, evaluating their pain levels every 60-seconds throughout. For the first group, as soon as the exam was over, the scope was removed. For the second group, the scope was left in a little longer.
This graph shows the results of the intensity of pain recorded each minute by the patients.
Redelmeier, D. A., & Kahneman, D. (1996). Patients’ memories of painful medical treatments: Real-time and retrospective evaluations of two minimally invasive procedures.
Later, each participant from both groups was asked about the memory they had from the procedure. Based on the data, their memory of the experience was an average of the worst moment in the colonoscopy (the peak pain) and how much pain they had at the end. So those in the second group who endured pain for a significantly longer period of time, had a better memory of the overall experience because the ending was less painful.
This highlights what Kahneman describes as the difference between the Experiencing Self (who assesses the pain minute by minute) and the Remembering Self (who averages the peak and ending experience for an overall score).
When it comes to making future decisions, we are guided by our Remembering Self, not the Experiencing Self. This implies that we are basing future decisions on an average of our most intense moment and the end of our similar experiences.
WHAT CAN YOU DO?
Knowing about the peak-end rule is an opportunity to use it to your advantage. Here are three examples that may be helpful:
When you go on vacation, focus on having some intensely wonderful experiences…especially right before heading home.
If you have an extremely bad experience (maybe an awful meal) try to improve your memory of the evening by lengthening the time and adding a more positive ending (perhaps going out for your favorite dessert).
If you have an argument with someone you love, finding some common ground before stomping off in a rage will help to reduce the ending negative emotions and your memory of the experience.
In the next part of the Decision-Making series….Why you should avoid trusting your gut or making a list of pros and cons when trying to make a choice.
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