What exactly is a "bad decision"?
A decision that doesn't provide the desired outcome. What can lead to this?
- You didn't consider what the key factors to pay attention to are.
- You didn't get advice (or you did, but it came from someone with your exact outlook).
- You had no way to test out it to see how changing things would affect the outcome.
- You had poor logic.
A bad political decision:
Try to foist a bailout on the US taxpayer without explaining to them what they were paying for. That's a bad decision. Clearly, somebody failed on one of the key points above.
A bad business decision:
JP Morgan purchases Washington Mutual (after being forced to purchase Bear Stearns just a few weeks ago). More of a bad thing doesn't all of the sudden make a good thing.
A bad investment decision:
Run out of the stock market and buy Gold. If you've ever read anything about Gold its a terrible long-term investment, and the best time to buy stocks is when they've been hammered.
A good career decision that turned into a bad career decision:
Anybody working in mortgages.
A bad autocratic decision:
Putin invades Georgia. That one's gonna set Russia back 20 years.
A bad blog decision:
Launching a blog on Good Decisions and Bad Decisions? You'll let us know. More to come.
3 comments:
I actually just finished reading a book on this very topic (bad decisions). I found "Deadly Decisions," written by Chris Burns to be very interesting. The book points out that there is actually something in the brain that causes some people to continuously make bad decisions. I didn't realize that there was an actual, logical excuse for bad decisions :)
Hi Becky,
I absolutely agree that something can be hard-wired in the brain to make bad decisions. There are quite a few examples in history of people that have made monumentally bad decisions, defying logic actually, and I believe the only explanation can be that it is "chemical".
The basis of the Analytic Hierarchy Process (decision theory for setting priorities) is that one has to make relative comparisons, i.e. how much more important one element is than another element, rather than just assigning numbers in an absolute sense, i.e. that should be a "five". What we have found through many cognitive psychosocial sessions is that the brain is very adept at comparing things because that is how we live and what we do every day -- how much brighter is this light than that light, etc. The brain is much less capable of being given a "yardstick" and then being asked to estimate, i.e. from here to that mountain how many yardsticks could you fit. It's very difficult to do. But if you ask how the distance to that mountain compares to the distance to another mountain, you actually come much more close.
Will check out Chris Burns book.
John,
Thank you so much for the explanation! I find this all to be extremely interesting!
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