A Few Principles For Thinking Clearly, Logically And Rationally
If you want to improve your life, you will need to radically change how you think
Cognitive scientists have known for decades that humans are inherently irrational — our thinking is not pure but prone to error.
Dan Ariely wrote an amazing book about the systematic irrationality of our decisions and judgements.
In Predictably Irrational, he writes: “We all want explanations for why we behave as we do and for the ways the world around us functions. Even when our feeble explanations have little to do with reality. We’re storytelling creatures by nature, and we tell ourselves story after story until we come up with an explanation that we like and that sounds reasonable enough to believe. And when the story portrays us in a more glowing and positive light, so much the better.”
More often than not, our biases, world-views and beliefs can blur our perception of reality — our decision-making process is riddled with systematic blindspots.
“…And they affect everything we do. They make us spend impulsively, be overly influenced by what other people think. They affect our beliefs, our opinions, and our decisions, and we have no idea it is happening,” says Toby Macdonald of the BBC.
We rarely make decisions based on facts. Rational decisions are those based on solid unbiased precedents, facts and logical principles.
A rational person’s behaviour is guided more by conscious reasoning than by experience, and not adversely affected by emotions — we easily fall for emotional bias.
Daniel Kahneman, Amos Tversky, and other psychologists have demonstrated that humans are systematically, and deeply irrational in their reasoning and decision making. They have shown that we make choices that defy logic.
In the groundbreaking book, Thinking, Fast and Slow Daniel Kahneman describes our systematic irrationalities and how our biases distort our judgment even when facing simple problems and decisions.
“Our inability to understand ourselves in a different emotional state does not seem to improve with experience; when that happens, when our irrational self comes alive in an emotional place that we think is familiar but in fact, is unfamiliar?” writes Dan Ariely.
For example, many people are willing to work for free, but once money is mentioned, they immediately revert back to market norms and demand what they are worth.
Most people don’t mind adding an extra $100 to a $5,000 price tag, but they will clip coupons to save even $1 dollar when buying something else at a lower price.
They consider the value amounts relatively rather than objectively.
Why is that?
When presented with a choice between two products: one free and the other at a cost, studies show that people irrationally opt for the free one, even if it means greater expenses in the long-term.
And why do we always take what’s free, even if we don’t really want what’s on offer? When we are overly excited by free! we make mistakes.
Zero is not just a mere discount; it is a powerful decision-making factor.
And why does taking a cash gift from a friend make us feel uncomfortable, while a gift card is perfectly acceptable?
When making a choice between three options (1, 2, and 3), you are most likely to value them differently if you had to choose between just 1 and 2.
Economists say this is faulty thinking because the value of 1 and the value of 2 are not altered by the presence of 3.
In many situations, our thinking process change and our decisions vary depending on how options are presented to us.
Most people don’t know what they want unless they see it in context. We don’t know what kind of phone we want — until we see a review.
We don’t know what kind of speaker we like — until we hear a set of speakers that sounds better than the previous one.
We don’t even know what we want to do with our lives — until we find an influencer who is doing just what we think we should be doing.
Context seems to dictate our behaviour.
Behavioural economists argue that human judgment is notoriously flawed in many ways and that we could achieve much better outcomes if we understood our flawed thinking for what it is.
“Give people a reason and they may not supply the behaviour. But give people a behaviour and they will have no problem supplying the reasons themselves” says Rory Sutherland, founder of Ogilvy’s behavioural science practice.
Professor Richard Thaler, one of the longtime leaders of this school of behavioural economics and his colleagues have pointed out all sorts of flaws in human judgment. In his book, Nudge: Improving Decisions About Health, Wealth, and Happiness, Thaler writes:
“Hundreds of studies confirm that human forecasts are flawed and biased. Human decision making is not so great either. Again to take just one example, consider what is called the “status quo bias,” a fancy name for inertia. For a host of reasons, which we shall explore, people have a strong tendency to go along with the status quo or default option.”
Thinking better, clearly and rationally
The good news is, you can train yourself to question your repeated behaviours and make better decisions.
Pay particular attention to your first decision. Question your assumptions, and decision making factors. For life-changing decisions, think beyond first-order consequences — consider second and even third consequences of the choice you are about to make.
Short-term decisions can influence long-term decisions. Every decision can have large consequences on the next one — your first decision can have a long-lasting effect.
Given this effect, the first decision is crucial, and we should give it an appropriate amount of attention.
Making a rational decision involves an analysis of the inputs (information, assumptions, and biases) that form part of your reasoning.
If you take your inputs seriously, the output (decisions) that result from your reasoning will improve.
Making a rational decision means questioning continuously. It is drilling down to eliminate inaccuracies, wrong assumptions, improve comprehension, and strive for intellectually honest results.
Most people don’t think their decisions are flawed but they are quick to observe irrational behaviour in others.
They think they are being rational in the moment.
In reality, nothing we think about or do fails to be influenced by a multitude of mental shortcuts that our brain has gathered through experience to allow us to get through the day.
In his book, You Are Not So Smart, David McRaney, explains: “You are a confabulatory creature by nature. You are always explaining to yourself the motivations for your actions and the causes to the effects in your life, and you make them up without realizing it when you don’t know the answers. Over time, these explanations become your idea of who you are and your place in the world. They are your self… You are a story you tell yourself.”
You have to be aware of these biases and create systems that mitigate the damage, otherwise, you will never come close to making rational choices.
And sometimes, the smarter you are, the more likely you are to fall victim to biases because you think you know it all.
Beware of intuition. With every decision or judgement you make, there is a battle in your mind — a battle between intuition and logic.
And your intuitive brain is a lot more powerful than you may think.
According to researchers, emotions rule our decision-making so strongly that unhappy moods can affect stock performance.
“In order to have anything like a complete theory of human rationality, we have to understand what role emotion plays in it,” writes Nobel laureate Herbert Simon in his 1983 book Reason In Human Affairs.
Delay decisions when possible. “Give yourself time to make decisions since research shows that emotions are short-lived and humans typically go back to “baseline states” after some time,” says Vivian Giang.
To stop yourself from systematically erring in the same direction every day, think over your thinking, recognise the patterns of your decision-making process, question your perceptions and learn new decision-making models.