The eight challenges of complex decisions

We are poorly taught how to make decisions. It is not a subject in school, mandatory course at work or a standard feature in your upbringing. This is unfortunate, because you have to make judgments about all kinds of things every day. And especially with complex decisions, it's helpful to know how to make good judgments.

examples of complex decisions

You don't have to learn how to make every decision perfectly. As you now know, you can basically rely on System 1. Using patterns and habits, you often make a sound choice. But with complex decisions it becomes relevant to learn how to do it, because System 1 is not good at making them. Complex decisions require activation of System 2.

Below you can see some examples of difficult decisions. Do you know how to make a good choice in these situations?

Where is the best place to live?

Should I change jobs or studies?

Which partner suits me well?

de acht uitdagingen van complexe besluiten

Complex decisions can be about many different issues. And yet, they often have similar challenges. Steven Johnson identifies in his book "Farsighted" eight primary factors that make complex decisions so difficult. Find out which ones they are and see examples of complex decisions from the argument:

They involve multiple variables

Example from 'The Argument'

How Prime Minister Marsh should respond to the escape depends on many things. These include support within her coalition, facts about the event and opinions of party colleagues.

They require full-spectrum analysis

Example from 'The Argument'

The talk show host tries to get Edible to look at the escape from multiple angles. However, Edible persists in her preconception that Prime Minister Marsh must go.

You are forced to predict the future

Example from 'The Argument'

Garlic shares the news report from abroad and expresses his concerns that such a situation could also happen here. He then disagrees with Prime Minister Marsh on what this means for the future.

They involve varied levels of uncertainty

Example from 'The Argument'

Tree is proposing new legislation to prevent future escapes. In doing so, he is trying to anticipate several things that could happen, but Prime Minister Marsh explains how the proposed legislation could not have prevented the new escape.

There are often conflicting objectives

Example from 'The Argument'

Natterjack must choose between upholding the coalition or remaining trustworthy with his constituents. He cannot get both; a choice must be made between them.

You need to harbor undiscovered options.

Example from 'The Argument'

Chairman Agile must decide how to deal with a wrong voting procedure, for which there is no guidebook. Ultimately, he makes a decision on how to resolve this, although not a correct one.

You are prone to System 1 failings.

Example from 'The Argument'

Each main character suffers from biases. With that, they all suffer from the mistakes System 1 makes.

You are vulnerable to failures of collective intelligence.

Example from 'The Argument'

Each opposition member finds validation in the idea that More should leave through the support of the others. The group just doesn't get smarter from each other, but suffers from the same fallacy.

the eight challenges of complex, long-term decisions

biases and complex decisions

In the previous chapter, you saw how the interaction between System 1 and 2 can lead to biases. The overview above also shows how errors of System 1 make it difficult to make good complex decisions. There are a number of other examples of this:

If you have to make a choice with multiple variables, you tend to take one as the main focus (‘anchor bias’). You base your decision primarily on this variable and attach less value to the others.

System 1 does not work well for rare situations. It either values them too high, especially in striking situations, or forgets them altogether, if they are considered too unlikely. A choice for the true value of rare situations cannot be made by System 1.

We value variables we know more than those we don't. Since complex decisions are also characterized by uncertainty, this is dangerous.

Overestimating your own judgment (‘Dunning-Kruger effect’). There is a high correlation between good decision-making and the willingness to acknowledge and even embrace uncertainty.

An important factor that also influences your decision-making is time pressure. When you are under pressure, you are less inclined to question your mental model of System 1. It feels uncomfortable to slow down and seek help from System 2 because it' s not nice to question your intuition under pressure. So time pressure makes complex decisions extra difficult.

How psychologists Kahneman and Tversky mastered their own biases

In the book 'The Undoing Project' Michael Lewis describes the relationship between psychologists Daniel Kahneman and Amos Tversky. These psychologists have become world famous for their work on (among other things) biases.

One of the interesting things about their successful collaboration is that they had completely different personalities. Kahneman was pessimistic, Tversky optimistic. Kahneman always thought he was wrong, while Tversky thought he was often right. Kahneman was sloppy, Tversky wasn't. Therefore, it was sometimes difficult for observers to understand how these psychologists could work together well.

Lewis shows that there were also similarities. For example, they laughed a lot together and were both looking for simple, powerful truths. For Kahneman and Tversky, a successful working day could mean agreeing on just one full sentence. Thanks to their intense collaboration on a daily basis, challenging each other's impulses and dedication to the scientific method, they eventually managed to produce influential works in psychology.

from theory to application

Now you know better in which situations it is smart to call on System 2 to help out. It's wise not to fully rely on System 1 in making complex decisions.

But how can you best use your System 2? In the next chapter, we look at what steps you can take for making good decisions.