The number of choices we must consider before making even the simplest of decisions is increasing at a dizzying rate, what with the Internet, globalization, 24-hour cable news and iPhones. This is especially true with the often complicated retirement planning environment. To cut through the noise, a number of experts recommend a back-to-basics approach – one that emphasizes hunches and best-guesses.
Newsweek reports that a growing number of psychologists are questioning the validity of traditional decision-making methods that depend on data-heavy calculations and increasingly powerful computers.
One of the leading challengers to the dogma of decision making is psychologist Gerd Gigerenzer of the Max Planck Institute in Germany, the magazine reports. His new book, “Gut Feelings,” collects a convincing body of evidence for the power of hunches over laborious data crunching. Hunches, gut feelings, intuition – these are all colloquial English for what Gigerenzer and his colleagues call “heuristics,” fast and efficient cognitive shortcuts that can help us negotiate life, if we let them.
Newsweek explains the “take the best” heuristic. “Take the best” means that you reason and calculate only as much as you absolutely have to; then, you stop and do something else. So, for example, if there are 10 pieces of information that you might weigh in a thorough decision, but one piece of information is clearly more important than the others, then that one piece of information is often enough to make a choice. You don’t need the rest; other details just complicate things and waste time.