The "Mystery" of Intuitive Decision Making
A High Stakes Hunch
I had just got the news: the bank I worked for was going to sell the business I was supporting. This was going to be the seventh transition of my 26-year banking career. Should I try to find a new job in the industry or start my own business? Somehow, I just knew the answer right away: I wanted to start a business that could potentially have a huge impact. It was only later that I could come up with reasons (or rationalizations) for taking such a leap.
Was this intuitive decision rational? When is it best to use your gut feelings to decide? How should you use your intuition to best effect? What is intuition anyway? 18 months later, I can tell you my decision was high-quality because it allowed me to move quickly, without wasting lots of time on unhelpful analysis, so I could get to work on designing the next stage of my career and life.
References
[1] Gigerenzer, Gerd. Risk Savvy: How to Make Good Decisions. London: Penguin, 2015. Print.
[2] N.a. “Gut Feelings | Philosophy Talk.” Philosophytalk.org. n.d. Web. 24 May 2017. <https://www.philosophytalk.org/blog/gut-feelings>
[3] Hogarth, Robin M., Deciding Analytically or Trusting your Intuition? The Advantages and Disadvantages of Analytic and Intuitive Thought (October 2002). UPF Economics and Business Working Paper No. 654. Available at SSRN: https://ssrn.com/abstract=394920 or https://dx.doi.org/10.2139/ssrn.394920
[4] Analytics Magazine. “Forum: Intuition-based decision-making: The other side of analytics – Analytics Magazine.” Analytics Magazine. 27 Feb. 2015. Web. 24 May 2017. <https://analytics-magazine.org/forum-intuition-based-decision-making-the-other-sideof-analytics/>
[5] Klein, Gary A. Sources of Power: How People Make Decisions. S.l.: MIT, 2017. Print.
[6] Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2015. Print.
[7] Based on ScienceDaily. “Trust your gut: Intuitive decision-making based on expertise may deliver better results than analytical approach.” ScienceDaily. 12 Dec. 2012. Web. 24 May 2017. <https://www.sciencedaily.com/releases/2012/12/121220144155.htm>
[8] Michael Blumfield. “When making decisions, intuition can be better than a rational, deliberate approach.” The Hub. 29 Dec. 2014. Web. 24 May 2017. <https://hub.jhu.edu/2014/12/29/decision-making-intuition/>
[9] Ibid.
[10] Gigerenzer, 2015.
[11] DeMiguel, Victor, Lorenzo Garlappi, and Raman Uppal. “Optimal Versus Naive
Diversification: How Inefficient Is the 1/N Portfolio Strategy?” By Victor DeMiguel, Lorenzo Garlappi, Raman Uppal :: SSRN. N.p., 13 Apr. 2009. Web. 24 May 2017.
[12] Hogarth, 2002
[13] Psychology Today. “Learn How to Intuitively Make Smart Decisions.” Psychology Today. n.d. Web. 24 May 2017. <https://www.psychologytoday.com/blog/emotionalfreedom/201304/learn-how-intuitively-make-smart-decisions>
[14] Karelaia, Natalia and Reb, Jochen, Improving Decision Making Through Mindfulness (May 30, 2014). Forthcoming in Mindfulness in Organizations, Reb, J., & Atkins, P. (Eds.), Cambridge University Press.; INSEAD Working Paper No. 2014/43/DSC. Available at SSRN: https://ssrn.com/abstract=2443808
[15] Mousavi, Shabnam and Gigerenzer, Gerd, Risk, Uncertainty, and Heuristics (March 19, 2014). Journal of Business Research, Vol. 67, No. 8, 2014.
[16] Tononi, Giulio. Phi: A Voyage from the Brain to the Soul. New York: Pantheon, 2012. Print.
About the Author
Brett Whysel
After a 26-year career as an investment banker, Brett founded Decision Fish in 2016. Decision Fish’s mission is to empower people to make wise financial decisions. in the form of a low-cost, scalable financial wellness benefit for employers to offer employees. Brett also teaches Public Economics and Decision Making at the City College of New York and runs the Behavioral Economics-NYC meetup. He is a top ten authority on behavioral economics on Quora.com and writes about behavioral economics at www.decisionfish.com and www.twitter.com/decisionfish, respectively. Brett earned a BS in managerial economics/French from Carnegie Mellon University and an MA in philosophy from Columbia University.
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