Decisions take time. Choosing a new apartment or deciding whether to change jobs are problems with many dimensions that need to be carefully balanced. There are methods to make better decisions, and pitfalls you should avoid (above all: don’t trust your gut for those). However, we also make many small decisions every day. Some we make again and again, as what to have for dinner or which clothes to wear. Others happen less often, but there is always one waiting for you to decide: whether to replace an appliance, which hotel to book for your holidays, and so on.
Small decisions also take time. Paradoxically, however, the small decisions that might eat a larger part of your time might be the ones that matter less. This is because of a fundamental psychological law: when you choose between two options, your brain needs more time (and makes more mistakes) if the options are more similar. This makes sense if you think of decisions as problems where you want to find which option is better. If I ask you which of two computer screens is larger but they are almost identical, you will have to look closer and pay attention, and it will take you some time. But if one is tiny and the other is enormous, you will immediately know, without any effort.
Struggling when it does not matter
The same happens with decisions. Imagine you have to choose between two hotels for your beach holidays. The first costs $50 less per night than the second, but it is 600 meters further away from the beach. Other than that, they are very similar in quality. Unless you really hate walking, you will probably not hesitate much to book the cheaper hotel. You are far away from being indifferent, so the decision is easy and you will make it quickly (if this example does not work for you, think the first hotel is $100 cheaper).
Now, suppose the first hotel costs just $5 less per night, and it is only 200 meters further away from the beach than the second. The differences are small. Is it worth it? Your brain finds this decision harder, and will need more time to make it. This “chronometric effect” has been demonstrated in decision-making. In a study published in the Journal of Risk and Uncertainty in 2022, my coauthor Michele Garagnani and I estimated the attitudes toward risk for a large group of decision-makers in the laboratory. For example, do you prefer five chances out of ten of earning $16, or eight chances out of ten of earning $10?
We then used those risk attitudes (economists speak of “preferences”) to study errors and response times for new decisions. The results were that, the closer people were to being indifferent, the more errors they made, and the longer they took to decide. The same happened in another study on simpler decisions that we published in the Journal of Economic Behavior and Organization the same year.
This is how the human brain works, but it is paradoxical. If you are choosing between two options which are almost exactly as valuable to you, what you choose does not matter much, because the difference between them is small. In decision-theoretic jargon, the “opportunity cost” is low. And yet, people spend more time for decisions that matter less. In a study on decision-making published in the Proceedings of the Royal Academy B, Oud et al. (2016) asked participants to make many decisions but gave them too little time to make them. Whatever decisions they did not make in time were made at random by the computer, which meant a large chance of being stuck with things they did not like. Predictably, people made many mistakes and left many decisions to chance. But, when they were prompted to make a decision whenever they were taking long, they actually made more and better decisions. Why? People were taking longer for decisions that mattered less. Asking them to cut those short saved them valuable time, at little cost.
Struggling with a small decision? Maybe toss a coin.
The moral of the story is that, at least for small decisions, if you find yourself struggling, it might be because it does not matter. So just do something and stop worrying. Again, this is not true for complex decisions like picking your kid’s school. Those decisions take time because you have to carefully balance a large number of different factors (see this post and this post for more help with those). But if you are deciding whether to paint your kitchen ivory white or marble white, or whether to go on holiday the first or second week of August, and you find yourself struggling, you are probably wasting your time.
The key is to recognize when your struggle comes from within yourself, and when it comes from lack of information. If you already know everything about two appliances and find yourself going back and forth between them, you are indifferent. Toss a coin, buy one, and use your time for something more rewarding. If you are choosing between two car models and struggle because you do not know important things as mileage or how expensive repairs will be, you need more information.
You can also try to get rid of some daily decisions. There are well-known anecdotes of scientists and managers who own five identical sets of clothes so that there will be no time wasted deciding what to wear in weekdays. This is extreme, but you could pick a weekly cycle and always wear the same color (or visit the same restaurant) on Tuesdays.
Decision-Making Essential Reads
A word of warning: if you try to avoid all small decisions, you can fall into a trap called decision inertia, which is always doing the same without reacting to changes in your environment. You can avoid that by revising your routines every now and then, for example every few months. But more on that in a future post.
