The Art of Thinking Clearly: The Secrets of Perfect Decision-Making

by Rolf Dobelli

The default effect is at work even when no standard option is mentioned. In such cases we make our past the default setting, thereby prolonging and sanctifying the status quo. People crave what they know. Given the choice of trying something new or sticking to the tried and tested option, we tend to be highly conservative even if a change would be beneficial. My bank, for example, charges an annual fee of $60 for mailing out account statements. I could save myself this amount if I downloaded the statements online. However, though the pricey (and paper-guzzling) service has bothered me for years, I still can’t bring myself to get rid of it once and for all.

So where does the status-quo bias come from? In addition to sheer convenience, loss aversion plays a role. Recall that losses upset us twice as much as similar gains please us. For this reason, tasks such as renegotiating existing contracts prove very difficult. Regardless of whether these are private or professional, each concession you make weighs twice as heavy as any you receive, so such exchanges end up feeling like net losses.

The fear of regret becomes really irksome when combined with a ‘last chance’ offer. A safari brochure promises ‘the last chance to see a rhino before the species is extinct’. If you never cared about seeing one before today, why would you fly all the way to Tanzania to do so now? It is irrational.

The fear of regret tricked you into thinking this was a one-time offer, when in reality, real estate with a lake view will always come on the market. The sale of stunning property isn’t going to stop any time soon. ‘Last chances’ make us panic-stricken, and the fear of regret can overwhelm even the most hard-headed dealmakers.

Money is money after all. But we don’t see it that way. Depending on how we get it, we treat it differently. Money is not naked; it is wrapped in an emotional shroud.

In conclusion: be careful if you win money or if a business gives you something for free. Chances are you will pay it back with interest out of sheer exuberance. It’s better to tear the provocative clothes from this seemingly free money. Put it in workmen’s gear. Put it in your bank account or back into your own company.

Though eating enough and giving yourself breaks is important, the next necessary

condition is employing an array of tricks to keep you on the straight and narrow. This includes eliminating distractions. When I write a novel, I turn off my Internet access. It’s just too enticing to go online when I reach a knotty part. The most effective trick, however, is to set deadlines. Psychologist Dan Ariely found that dates stipulated by external authorities – for example, a teacher or the IRS – work best. Self-imposed deadlines will work only if the task is broken down step by step, with each part assigned its own due date. For this reason, nebulous New Year’s resolutions are doomed to fail.

Of all the emotions, envy is the most idiotic. Why? Because it is relatively easy to switch off. This is in contrast to anger, sadness, or fear. ‘Envy is the most stupid of vices, for there is no single advantage to be gained from it,’ writes Balzac.

The difference: the subject of envy is a thing (status, money, health etc.). The subject of jealousy is the behaviour of a third person. Envy needs two people. Jealousy, on the other hand, requires three: Peter is jealous of Sam because the beautiful girl next door rings him instead.

How do you curb envy? First, stop comparing yourself to others. Second, find your ‘circle of competence’ and fill it on your own. Create a niche where you are the best. It doesn’t matter how small your area of mastery is. The main thing is that you are king of the castle.

If my neighbour buys himself a Porsche, it doesn’t mean that he has taken anything from me.

When I find myself suffering pangs of envy, my wife reminds me: ‘It’s OK to be envious – but only of the person you aspire to become.’

be careful when you encounter human stories. Ask for the facts and the statistical distribution behind them. You can still be moved by the story, but this way, you can put it into the right context. If, however, you seek to move and motivate people for your own ends, make sure your tale is seasoned with names and faces.

The monkey business test is considered one of the most famous experiments in psychology and demonstrates the so-called illusion of attention: we are confident that we notice everything that takes place in front of us. But in reality, we often see only what we are focusing on – in this case, the passes made by the team in white. Unexpected, unnoticed interruptions can be as large and conspicuous as a gorilla.

Purge yourself of the illusion of attention every now and then. Confront all possible and seemingly impossible scenarios. What unexpected events might happen? What lurks beside and behind the burning issues? What is no one addressing? Pay attention to silences as much as you respond to noises. Check the periphery, not just the centre. Think the unthinkable. Something unusual can be huge; we still may not see it. Being big and distinctive is not enough to be seen. The unusual and huge thing must be expected.

‘I keep every order in my head – until it is served.’

Zeigarnik mistakenly believed that it was necessary to complete tasks to erase them from memory. But it’s not; a good plan of action suffices.

‘It’s hard to imagine that people enthusiastically buy books written by business leaders who are, on average, only slightly better than the norm.’ Even Warren Buffett thinks nothing of CEO deification: ‘[?. . .?] A good managerial record [?. . .?] is far more a function of what business boat you get into than it is of how effectively you row.’

In short, what exists means a lot more than what is missing. Science calls this the feature-positive effect.

In conclusion: we have problems perceiving non-events. We are blind to what does not exist. We realise if there is a war, but we do not appreciate the absence of war during peacetime. If we are healthy, we rarely think about being sick. Or, if we get off the plane in Cancun, we do not stop to notice that we did not crash. If we thought more frequently about absence, we might well be happier. But it is tough mental work. The greatest philosophical question is why does something and not

nothing exist? Don’t expect a quick answer; rather, the question itself represents a useful instrument for combating the feature-positive effect.

If you sit on the supervisory board of such an organisation, ask about the ‘leftover cherries’, the failed projects and missed goals.

A balmy Indian summer, a friend’s divorce, the First World War, cancer, a school shooting, the worldwide success of a company, the invention of writing – any clear-thinking person knows that no single factor leads to such events. Rather, there are hundreds, thousands, an infinite number of factors that add up. Still, we keep trying to pin the blame on just one.

‘When an apple ripens and falls – what makes it fall? Is it that it is attracted to the ground, is it that the stem withers,

is it that the sun has dried it up, that is has grown heavier, that the wind shakes it, that the boy standing underneath it wants to eat it? No one thing is the cause.’ In this passage fr...

Our actions are brought about by the interaction of thousands of factors – from genetic predisposition to upbringing, from education to the concentration

of hormones between individual brain cells. Still we hold firmly to the old image of self-governance. This is not only wrong but also morally questionable. As long as we believe in singular reasons, we will always be able to trace triumphs or disasters back to individuals and stamp them ‘responsible’. The idiotic hunt for a scapegoat goes hand-in-hand with the exercise of power – a game that people have been playing for thousands of years.