There is no such thing as a rational decision – and that’s OK

At the start of most academic terms, I poll my students with the following question: “Are you a rational decision maker? Yes/No”. Given the title of this lesson, you’re probably thinking that this sounds like a crappy trick question. I think so too. The reason I ask, though, is to get an idea of what people mean when they say they’re rational and to understand whether that’s a good thing.

There are a few common results. Almost without fail, more men raise their hands to being ‘rational’ decision makers, while women will generally cop to not always being rational. People are generally proud of their rationality, but embarrassed by their irrationality. When I ask what it means to make a rational decision, the answers usually fall into a few categories. In people’s minds, rational decisions:

1. Are made without emotion
2. Are made systematically (not impulsively)
3. Include all the information and….
4. Have good outcomes

After a long discussion about what constitutes a rational decision, I disappoint everyone by asserting that humans are not capable of purely rational decision making, and we should be happy about that.

Economists had long assumed in their models that people generally followed a rational way of thinking (e.g., unbiased, self-serving, etc.). Of course, these researchers knew that humans are very error prone, but figured their ‘errors’ weren’t systematic enough to worry too much about. Now, research on human decision making is continually taking more and more ‘irrationality’ into account.

I’ll give a few reasons why consumers should not be so focused on rational decisions, and more focused on effective decisions.

1. Decisions without emotions are missing the full picture. Can you imagine trying to make a decision about a future vacation without imagining how you’ll feel about it? Cutting emotions out of that process would probably end up in a lot more staycations (lower cost, more convenient) and less Disney (costly but you get to meet Goofy). Healthy human brains use emotion to guide decisions because emotion is integral to the way we learn. For example, I won’t clean my own gutters because I am afraid of heights; for me, this is a good decision (even if, rationally, the odds of me getting hurt are very low and it saves a lot of money).
2. Systematic decisions take a long time. Sometimes people’s best decisions are made impulsively (e.g., my massage chair). If we made every decision systematically, we’d be mentally exhausted and there’s no way we’d have time for anything else. Our brains are pretty amazing at creating shortcuts so that we don’t have to spend all our mental resources on each decision. Emotion plays a pretty big role in those shortcuts too.
3. Including all pertinent information is impossible. When you decide to purchase a car, you’ve already cut out a bunch of pertinent information (Could you share a car? Walk? Quit your job?) and skipped right to the purchase decision. You also probably consider only a few brands while automatically discarding many others. This is because our cognitive resources (brain power) are limited and our memory has already decided which kinds of information are more or less important. Even when we search for information, we may be getting biased feedback based on the way we asked the question (ahem, confirmation bias).
4. Just because the decision making process was rational or ‘good’, a good outcome is not guaranteed. Think about dating. You might find someone who checks all the boxes, looks good on paper and you spent a ton of time vetting them (i.e., dating them), but they just don’t do it for you. On the other hand, you could accidentally meet someone while you’re doing court ordered community service who turns out to be ‘the one’. (I’m not advocating for this, just saying it could happen). When asked to think about some of the ‘irrational’ decisions they’ve made, most people begin to realize that a lot (OK, at least some) of them ended up in a positive outcome.

The reason I start with this lesson is to help consumers let go of the idea that they could be rational all the time if they were just better. Instead, I want to help you, the consumer, focus on making effective decisions. My definition of effective is a decision that:

1. Aligns with your values
2. Is efficient
3. Considers pertinent information and….
4. Has a good outcome.

So give yourself a break! Make a pros and cons list (or spreadsheet) if you want to….I do. But keep in mind that a purely rational decision is not something humans are designed to do. And we navigate our world better with the brain we already have.