A632.9.3.RB - Role of Emotion in Decision Making

Decision overconfidence is a major challenge that confronts decision makers.  Overconfidence in decision making results when you believe you have more accurate information than you actually have; when you think you have a complete picture, but you only have part of it (Riordan, 2013).  Decision overconfidence results from overestimating the accuracy and depth of knowledge about the situation, ignoring disconfirming information, or feeling overly assured from similar situations in the past (Riordon, 2013).  Overconfidence in decision making can result in difficulties such as escalation of commitment bias, in which resources continue to be committed to a decision despite it becoming obvious that it is a failing course of action (Straw & Ross, 1987).

Professor Baba Shiv of Stanford University argues that there are a few positive aspects to decision confidence.  The first is from the perspective of the organization. As organizations develop customer confidence they derive benefits such as loyalty and positive marketing (Stanford, 2011).  The more confidence an organization can develop in its customers, the greater the loyalty. Loyal customers will spread positive word-of-mouth to other potential customers. Another positive aspect of decision confidence for the decision maker is that “confidence gives rise to the passion that is associated with the course of action that is being taken” (Stanford, 2011, 3:37).  The passion that develops from decision confidence is can help motivate a decision maker to pursue a course of action to the end. Leadership decision confidence yields confidence in subordinates. Leaders who do not demonstrate confidence in their decisions are unable to derive passion in their followers. A military commander has to be very convinced that the decision he has made is the right one (Stanford, 2011).  Additionally, decision confidence effects the utility of the experience. When we are more confident in our decisions, we become more engaged and experience greater motivation in the task we have decided to undertake. We tend to get more benefit from activities we choose to do than those we are assigned to do (Stanford, 2011).

My wife and I recently made the decision to relocate our family from Louisiana, where we have lived for the last twelve years, to Arizona.  As my wife and I have considered the decision and how it will affect our lives and the lives of our children, we have felt very confident we are making the right choice.  As we have considered our best option we felt excitement to know that we have the opportunity to move closer to our extended family. Currently our closest relative is about 1200 miles away in Phoenix.  When we move to Pima it will only be about 150 miles. Just this week I began training with my new employer. I believe the confidence I feel in our decision has helped me to feel greater excitement about the opportunity and greater engagement with my new employer.  Greater decision confidence generally leads to greater personal investment in a decision; it makes you feel responsible for the outcome. I am excited about my new job as an EMS helicopter pilot. I believe I will feel greater job satisfaction as I use my piloting skills to help injured and sick patients to receive the medical care they need.  I am excited to fly in a different environment. Our house is currently on the market and we are planning to move at the end of the school year.

A few years ago I made a decision that I did not feel nearly as confident about.  My wife and I had talked about purchasing a 4 wheeler, and we both agreed that it was something we wanted to do.  She had gone out of town for a few weeks during the summer with our children to visit her family. I made the decision, without consulting with her, to go ahead with the purchase of a brand new four wheeler.  I was initially excited about buying the four wheeler and seeing Letty’s face when she got home; I knew she would be excited about it too. I had discovered a Honda dealer about a four hour drive from our house that sold the four wheeler significantly cheaper than the local dealer.  So, on a Friday afternoon after work I jumped in my truck to make the drive to pick up the four wheeler. As I was making the trip I began thinking about my decision. I began to wonder if Letty would be as excited as I thought she would be. I began to worry that I was making the wrong choice.  Looking back I now realize that it was not that I was making a bad choice, it was that I had not made the choice confidently. I did end up making the purchase, and Letty was very excited to see it when she got home from her trip.

I now realize that there is a continuum of decision confidence that ranges from a complete lack of confidence on one end to complete confidence on the other end.  The midpoint would be uncertainty about the decision. Based on this continuum I would say my confidence in the decision to move my family to Arizona is about 8.5, on a scale of one to ten. There are some unknowns that still exist about the move that cause feelings of uncertainty. My confidence at the time I went to pick up the four wheeler was about a five; I wavered at the midpoint, at times feeling confidence, and at other times feeling uncertain about my decision.

When I have had low confidence in my ability to make a good decision I have often felt like Alice in Lewis Carroll’s Alice in Wonderland (Carroll & Kelly, 2000).  When Alice contemplates which road to take, she is confronted by the Cheshire Cat. She asked, “which path shall I follow?” The cat answers, “That depends where you want to go. If you do not know where you want to go, it doesn’t matter which path you take.”  When we lack decision confidence we don’t know which path to take, and so it is hard to say that we have made a good choice. Understanding “where we want to go” is an important of making decisions with confidence.

References

Carroll, L., & Kelly, R. (2000). Alice’s adventures in Wonderland. Peterborough, Ont: Broadview Press.

Riordan, C. M. (2013). Three ways overconfidence can make a fool of you. Retrieved from https://www.forbes.com/sites/forbesleadershipforum/2013/01/08/three-ways-overconfidence-can-make-a-fool-of-you/#38f6137837fb

Stanford. (2011, November 7). Brain research at Stanford: Decision making [Video file]. Retrieved from https://youtu.be/WRKfl4owWKc

Straw, B. M., & Ross, J. (1987). Knowing when to pull the plug. Retrieved from https://hbr.org/1987/03/knowing-when-to-pull-the-plug