Knowing when to stop

koenfucius

Jun 3

(featured image: Ansgar Koreng/Flickr CC BY SA 2.0

We can evidently not spend an infinite amount of time on making a decision, but stopping too quickly can be no less detrimental

You have just made a decision: you chose to read this piece (and that is much appreciated!). I guess it probably didn't take you all that long to make that decision. Despite the fact that there were, in all likelihood, numerous other things you could have opted to do instead (including carrying on with whatever you were doing just before), you managed to pick this activity, with great skill. But what made you stop considering the alternatives and make up your mind?

When we cannot stop

Decision making inherently involves considering several options, evaluating and comparing them, and ultimately drawing a conclusion as to what we will do. This final step is crucial, of course: without it, the process would never come to an end. That is perhaps a bit extreme, but just imagine your 15-year-old self, trying to decide what you want to do when you grow up, and being overwhelmed, both by the sheer infinite number of possibilities, and by their complexity. You could form a band with your mates, become a laboratory pharmacist, an airline pilot, or an accountant. Or you could open a sandwich bar, make movies, develop mobile apps, or become a behavioural economist.

The more concerned you are about choosing the very best option, the longer the list becomes. For every item, you need to gather evidence. What skills and qualifications would you need, and are these within your reach? What is enjoyable and not so enjoyable about each one? Will it be easy to find work, and how much would you be able to earn? And that is just the start of the trouble: next you need to judge them against each other. How on earth do you compare the upsides and downsides of being a pilot with those of being an app developer? It's not so hard to see how you might just get stuck, reconsidering your earlier judgements, adding new perspectives – perhaps all the way until you reach your retirement age.

Red or white? White or red? What if I choose the wrong one? (photo: Version Française/Pixabay)

The problem may seem the vast number of options, but it isn't: it is the fear of making the wrong decision. Some people, for example a certain member of my household (who shall remain nameless), find it hard to decide between two near-identical items of clothing. When we feel we cannot determine the right choice unequivocally, we may find ourselves unable to stop the process of considering and weighing up alternatives. External time pressure (the shop closes in 10 minutes!) does not help, because it does not (and cannot) give us the confidence we made the right decision. We will just postpone it. If the decision is of less immediate urgency (and perhaps more momentous), self-imposed deadlines (next week, next month, surely before the end of the year) get pushed back, because we really need just a little more time to make sure we have made the best choice. When we're stuck in this kind of infernal loop, we are like gamblers who think their luck will turn with the next spin of the wheel or draw of the cards. We believe that the next insight we gain will ensure there is a clear winner, and that is worth a little bit of extra time and effort.

To break out of this predicament, we need to know when to stop, and that means letting go of the idea of finding the best choice. For all but small-world decisions, that would require so much knowledge we would never be able to acquire and evaluate it. The great polymath and Economics Nobel laureate Herbert Simon offered us not only an alternative to endlessly seeking perfection, but even a word for it: "satisficing" – making a decision that is 'good enough'.

When we stop too early

But while that may help us avoiding stopping too late (or not at all), it throws up a new potential problem: stopping too early. We exhibit many tendencies that might tempt us into stopping earlier than good decision making should. Along with the physically lazy status quo bias ("Why go for a walk? I am perfectly comfortable on the sofa!") and the psychologically lazy confirmation bias ("Why spend more time thinking about it? This fact here confirms that I am right!"), we may be inclined to follow some celebrity's advice (authority bias), or choose to carry on doing what we are doing because we have already spent so much effort at it (sunk cost fallacy).

The flipside of deliberating too long and postponing decisions indefinitely, is that we don't deliberate at all, and make a decision on the basis of a single cue. That is not even always a bad choice: in the circumstances, such a cue may well lead us to a satisficing choice. If we are zonked out on the sofa after a hard day's work, then staying put when someone suggests some effortful activity makes good sense. If, in the distance, we see an old, yellow VW beetle – just like our best friend's – park up, and then spot someone emerge from it who looks just like our best friend, it is perfectly reasonable to take that single fact as sufficient confirmation that it is our best friend.

But it is certainly not always a good choice. A recent study by Patrick Ferguson at the university of Melbourne looked at how (Australian rules) football coaches evaluate their players' performance, and their subsequent decisions. Ideally, they should not reward or punish players on the basis of variation in outcomes that is the result of luck. However, that might be precisely what happens when coaches only look at the most salient aspect of a game – the outcome – and hence stop too early. To investigate this, Ferguson specifically focused on decisions made after narrow victories and defeats, where just one 'what-if' event could have turned a victory into a defeat and vice versa. Such judgement might be subject to outcome bias, and fail to take into account whether a player made a material contribution to the outcome.

Is he sitting there because of his poor performance, or because the team lost because of bad luck last time? (photo: freepik)

And this was exactly what the data showed: managers did not filter out the effect of luck. On average, coaches reduced players' performance ratings by 1/3 of a standard deviation in case of an unlucky loss compared to a lucky win – equivalent to the difference between a median player (at the 50th percentile) and one at the 30th percentile of the performance distribution. Perhaps even more importantly, these judgements had consequences. An unlucky loss tripled the chance that a player would be dropped from the next game, and if he was in the line-up, he'd be on the pitch for less long.

We need to be careful generalizing experimental findings from professional sports to other settings such as organizational management. But the author's argument, that these insights may help explain the decisions of leaders in contexts where performance is not (and perhaps cannot be) evaluated objectively is at least worth bearing in mind. Outcomes can be indicative of performance, but only if the effect of luck on the outcome is small.

When evaluating the work of their team members, managers would be well advised to consider whether the cues they use are indeed representative of their performance. Asking this simple question can prevent them stopping too early.

And the same applies to us all, if we want to make better decisions of any kind: just ask yourself whether other plausible possibilities might exist, that you might be overlooking. To paraphrase an aphorism that is persistently, but incorrectly, ascribed to Albert Einstein, we should make up our mind as early as possible, but no earlier.

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