When intuition based decisions are successful?
There is a
growing excitement over intuitive decision making. This is due to some populist
books, for example Malcolm Gladwell (2007)[i]
“Blink: The Power of Thinking Without
Thinking”, and the appealing thought of saving the effort of thinking and still
doing the right choices. I found this idea rather implausible, but still there
is some truth in it. The more I read the more interested I became of the intuitive
decision-making. Summarizing it roughly, I argue that there are three kinds of
successful intuitive decisions – those based on luck, expertise and emotion.
Expertise and emotion are discussed in the following.
Academic researchers have contributed
to this field of intuitive decision making, even though they do not usually
talk about intuition, but “Naturalistic decision making approach (NDMA)” or
“Recognition primed decision strategy (RPD)”.
Intuitive decision based
on expertise
According to
Kahneman & Klein (2009)[i]
Naturalistic Decision Making Approach (NDMA) is based on the expert’s intuition. The approach was
inspired by DeGroot’s (1978)[ii]
work on successful chess payers. He used a “thinking aloud” method and noticed
that the chess grand masters were able to identify the most promising moves
rapidly, while mediocre chess players did not sometimes even consider the best
moves. Some years later Klein, Calderwood, and
Clinton-Cirocco (1986)[iii]
analyzed and described the decision making of fireground commanders, who need
to make important decisions under conditions of uncertainty and severe time
pressure. Their hypothesis was that commanders would analysis a pair of
options, but this hypothesis proved to be incorrect. The commanders were found
to consider only a single option, and that was usually all they needed. The
option popped up from their experiences and expertise. If they felt the option
was inadequate, they modified it. If the modification could not be done, they rejected
the option and turned their attention to next alternative.
From these findings Gary Klein (1998)[iv])developed
the Recognition-primed decision
(RPD) model. In RPD the decision maker thinks about possible actions in given
situations, and selects the first suitable course of action.. There are three
different types of RPD as illustrated in a figure below. The experienced
decision makers are able to recognize when situation is known or similar to
some other ones they have experienced or heard of. Furthermore, the experienced
decision maker is able to judge which known options to use in a known situation
and evaluate which known options are best in an unknown situation. If known
options are not available, they can develop new ones. The challenges of RPD are the need for
extensive experience among decision-makers and the identification of situations
and actions as known or unknown. The fourth obvious possible situation is
missing from the figure 18 of RPD types, namely unknown situation and unknown
options.
Even the experience does not give direct answers in
these situations and some other method of deciding than RPD is thus used. RPD
has later been tested on nurses, system design, military command and
control, management of offshore oil installations and stock dealers
(see a review in Klein (1998)[i]). RPD has proved
to function well in conditions of time pressure, and in which information is
partial and goals poorly defined.
Intuitive decisions based
on emotions
Even though both NDMA
and RPD stress the importance of expertise in order to make accurate choices,
it does not stop the Joneses using intuitive decision making. People think they
have made an intuitive decision, when they have chosen without
conscious deliberation. I think
that the most of the “intuitive” choices consumers think they have made, have
in fact been heuristic. For example someone can call a decision intuitive; when
actually it have been based on the fact that one likes certain option more than
others. This phenomenon has been called affect heuristic or
like heuristic (Slovic et al. (2002)[ii]).
Our emotions provide immediate and automatic evaluation on “goodness”
or “badness” of a feature or possible consequence (Slovic et al. (2007)[iii]).
People especially rely on their emotions when the decision is difficult, when
there is limited amount of information or when they feel the emotions are
relevant (Schwarz (2002)[iv]).
Even though emotions are rapid, and in many cases accurate, the downside is
context dependency and the fact that emotions are easily manipulated (Slovic et
al. (2002)[v], Shane (2002)[vi]).
Consumer’s self evaluation
of intuitive decision making
I have done several studies[vii]
about consumer’s decision- making methods. According to their self evaluation,
it seems that intuitive methods (or near intuitive) are used in non-significant
daily choices clearly more than more difficult voting choices. In the figure
below the intuitive or nearly intuitive methods are in red and deliberate
methods in blue. Habitual choices and satisficing (choosing the good-enough
option) are nearly intuitive. The deliberation method can be seen as quite
opposite method for intuitive decision- making.
From marketer’s point of view the three different ways
consumers make intuitive choices (luck, emotion and expertise) are quite
different. One can raise the opportunities for luck by good availability and being
a top-of-mid brand. Most advertisements and commercials are already appealing
to our emotional side. The idea here is that if consumers like the commercial
they also like the product. Consumer expertise can be increased by experiences
and information. Try in periods and usage situations related advertising
addresses this dimension.
So when are the intuitive
decisions successful?
The intuitive decisions based on expertise tend to be
good. Most emotion-based intuitive decisions are excellent. The rate depends or
recognition of the emotion and its source.
[ii] Slovic,
Paul & Finucane, Melissa & Peters, Ellen & Macgregor, Donald G.
(2002): ”The affect heuristic”, a chapter in book edited by Gilovich, Thomas &
Griffin, Dale & Kahneman, Daniel: “Heuristics and
biases: The psychology of intuitive judgment”, p. 397-420
[iii] Slovic, P., Finucane, M. L.,
Peters, E., & MacGregor, D. G. (2007). The affect heuristic. European
Journal of Operational Research, 177(3), 1333-1352.
[iv] Schwarz, Norbert (2002): ”Feeling as
information: Moods influence judgements and processing styrategies”, a chapter in book edited by Gilovich, Thomas &
Griffin, Dale & Kahneman, Daniel: “Heuristics and biases: The psychology of
intuitive judgment”, p. 534- 547
[v] Slovic,
Paul & Finucane, Melissa & Peters, Ellen & Macgregor, Donald G. (2002):
”The affect heuristic”, a
chapter in book edited by Gilovich, Thomas & Griffin, Dale &
Kahneman, Daniel: “Heuristics and biases: The psychology of
intuitive judgment”, p. 397-420
[vi] Shane, Frederick (2002):
"Automated choice heuristics", a chapter in book edited by Gilovich,
Thomas & Griffin, Dale & Kahneman, Daniel: “Heuristics and
biases: The psychology of intuitive judgment”, p. 548-558
[vii] Consumer’s media choice –study
2014, Voter’s choice in European Parliament elections 2014, Voter’s choice in
Finland’s Parliament elections 2015.
[i] Kahneman, D. & Klein, G.
(2009): “Conditions for Intuitive Expertise: A Failure to Disagree”, American
Psychologist ,64(6),p.515-526, Sep 2009
[iii] Klein, G. A., Calderwood, R.,
& Clinton-Cirocco, A. (1986). Rapid decision making on the fireground. In Proceedings of the Human Factors and
Ergonomics Society 30th Annual Meeting (Vol. 1, pp. 576-580). Norwood, NJ: Ablex.
[iv] Klein, Gary A. (1998). Sources
of power: How people make decisions. Cambridge, MA: MIT Press, pp. 1-30.
Comments
Post a Comment