The illusion of dispassionate decision making
We don’t always need to perform a comprehensive cost-benefit analysis to make good decisions.
Earlier this week, I took half a day off and went to see an old friend, whom I had not seen for over twenty years. On the way there (and back) I could not help myself reflecting on the costs and benefits of my decision — and indeed whether I could argue that it was sound. That may seem like a bad case of or professional deformation (and I hold my hand up) — perhaps only a decision making nerd would entertain such thoughts. But it does not detract from the fact that my very choice appears to demonstrate that, to me, the costs must have been outweighed by the benefit. Did that stand up to scrutiny?
The cost aspect was relatively easy to establish: my friend lives about two hours away (by car; it is a lot longer by public transport, even on a day when the rail network is not paralysed by strike action). Time is an appealing measure to use in our evaluation, since the benefit can be expressed in similar terms: the amount of time I got to spend with my friend (we will call him Pete, for that is his actual name). Does it make sense to spend four unproductive hours travelling by car in return for a couple of productive hours? It doesn’t look too promising. And adding in the financial cost of the trip (at current petrol prices, you wouldn’t get much change from £50) makes it worse still.
Taking the cost of a choice as the starting point implicitly puts it in a negative light compared to the status quo — not travelling, in this case — which, by definition, carries no cost. If we are inclined against a particular option, its cost will often figure prominently in our argument against it. The hard work to persuade us of the opposite will then need to be made by the benefit. Is whatever I would gain from this trip going to compensate for the clear, well-defined debit side of the calculation? Unsurprisingly, this approach will make us verge towards staying put. It is difficult to quantify a visit to a friend in such a way that it tips the balance, particularly if the time element works so obviously against it.