In the May 5 issue of the New Scientist, Kate Douglas and Dan Jones laid down ten rules on how to make better decisions. Since I am not enthusiastic about taking decisions, most of the hints went past me. But I picked up some nice psychological jargon; and what I found interesting was how often the human mind deviates from rationality. Take a game, for instance, in which one would double one’s money if a coin landed heads up, and nothing if it landed tails up. In a long series of such bets, one would come out neither losing nor gaining anything; one would come out even. In a single spin of the coin, one may come out twice as rich, or may lose whatever one has bet. But apparently, most humans refuse to take this bet. On the average, people refuse to take a 50:50 bet unless the amount they would win is twice as high as the amount they would lose, or higher. Psychologists call this loss aversion.

One would have thought that the more complicated a problem, the more one should think about it. No, say psychologists, just the opposite. People reason out simple problems and come up with solutions fairly quickly. But the more they think about a complex problem, the more confused they become, and the less capable they become of deciding. Psychologists call this information overload. When one is in danger of being overwhelmed by information, the best thing to do, apparently, is to take a quick decision on the basis of partial analysis. In other words, it is better to find solutions in terms of a reasoning mechanism a mind can handle, not in terms of the volume of the reasoning a problem requires.

One illustration of this is to be found in investment decisions. The larger the number of investment choices people are presented with, the less likely they are to invest. The Telegraph gives prices of a thousand shares; financial newspapers give prices of seven times as many shares. How many people make investment decisions after reading these pages? I was an active investor at certain points in my life; but I never read the financial pages of newspapers. Most people who invest follow simple rules or theories to make a choice; the choices open to them hardly matter. Some people exchange hints with friends or follow advisers whom their friends recommend. This is called peer pressure. It can be very dangerous. It is behind most mass atrocities.

However, one must not act on too little information. Suppose you are asked to spin a wheel and, on the basis of the number where it stops, to guess the number of countries in Africa. Suppose the wheel is rigged so as to stop only at 10 and 65. The average number of countries estimated by people whose spin led the wheel to stop at 10 was 25; for people whose spin led the wheel to stop at 65, the average number of countries came to 45. The higher the number at which the wheel stopped after their spin, the higher the number of African countries the participants assumed. This is called the anchoring effect.

But whether you go for a quick and simple solution or prefer to argue things out with yourself in detail, you must not do it if you are feeling cheerful. For people make better decisions when they are sad. Psychologists call this depressive realism.

How often we have an argument with someone who simply refuses to see our point of view, and who instead keeps repeating arguments in favour of his position! We would not admit it, but he thinks precisely the same thing about us. Everyone draws on evidence by preference that supports his case, and tends to underplay evidence that goes against what he believes. This is called confirmation bias. A striking way to prove confirmation bias is to take a statement like “If there is a D on one side, there is a 5 on the other.” Suppose you are given four cards bearing D, A, 2 and 5, which cards would you turn over to test this statement? Most people would turn over the D and the 5, thinking that the statement would be confirmed if the two cards had 5 and D respectively on the obverse. But the card with the 5 is irrelevant, for the statement says nothing about what would be behind it. Only the card with the D provides a test of the proposition, which would be dis,proved if that card did not have a 5 behind it.

Open your wardrobe. How many clothes do you find there that you have not worn in a month, a year, ten years? Some no longer fit you; you do not like the colour of some, and some — well, you just ignore them somehow. If so, why do you not throw away all those clothes you never wear? You may be stuck for an answer; in that case, say it is the sunk cost effect. Just because you have already spent on those clothes, you will hesitate to throw them away. And the more expensive they were, the less likely you are to throw them away. This operates in other spheres as well. If you find you have tickets for two performances on the same evening, you will go to the one that cost you more, not to the one that you think you will enjoy most.

One rule appealed to me. There are many decisions which one does not enjoy making, or where there is no unique or happy choice. According to Douglas and Jones, these are decisions that are best left to others. Choosing wine over a dinner, for instance. Some people study the list of a hundred wines long and seriously, interrogate the waiter, make a tedious show of expertise and wisdom, and finally choose a wine that is hardly distinguishable from another. When I have a fellow-diner who betrays the slightest interest, I leave the choice of wine to him. And if I have to choose, I have a list of good wines in my mind, accumulated over a lifetime; I order from that list.

Finally, a word about two decision rules familiar to economists, called maximizing and satisficing. A maximizer chooses what is best under the prevalent constraints and circumstances; a satisficer chooses what would give a certain minimum level of satisfaction. The more complex a choice, the less satisfied are maximizers with theirs, and the bet- ter off are satisficers. In one study of job seekers, maximizers ended up earning 20 per cent more than satisficers; but they were much less satisfied with their choice.

Who knows what heights of wit I would reach if I went on with this column? Maybe I would, at some point, make my readers swoon with delight; all Calcutta would be littered with swooners. Readers would be so affected by the experience that they would wait for me to send them into swoons every other Tuesday. But I have learnt the wisdom of satisficing; I am perfectly happy to end at this point.