Archive | April, 2013

Brain vs. heart and guts

29 Apr

The word ‘rationality’ often conveys sense of maturity, responsibility and diligence. Gut feeling, heart or instinct are on the other hand associated with being daring, unreasonable or outright foolish. I would like to argue in this blog post that rationality is a very elusive concept which has many limitations and should not be applied to all problems. Relying on rationality in decision making can at times lead only to formalization of our instinctive errors and an illusion of control which is more dangerous than accepting from the start that the decision we are making is based on our gut feeling and treating it therefore as such; that is with extra alertness.

Limitations of rationality

Rational decision making is basically designing a mental model of what can happen in the future on the basis of which we subsequently make a decision. There are however in my opinion three main flaws of rationality. Firstly it is bounded by our own experiences, secondly we can never fully de-bias ourselves when estimating probabilities of future states of the world and possible consequences (most decision problems are unique and we therefore lack any objective reference point) and thirdly we are limited by our own cognitive abilities to process complex problems.

As for the first limitation, rationality is making the best decision under a certain set of assumptions. And here lies the problem – our assumptions are inherently imperfect because we can never know everything. We are basing them only on what we know yet there is so much more what we do not know and what we are not including in our model. Since everybody is unique, rationality is also individual and thus not universal. All the claim rational decision can therefore really mean is the most sensible thing to do given my very limited conscious knowledge of the problem.

The second problem is that rationality, despite its name, is hardly ever objective. Most decisions we face in life are one-off decisions (either because the decision itself is new or the context has changed). Since we have no objective reference points any probabilities we assign to the possible future scenarios in our model are therefore purely subjective. This means they are likely to be biased in just the same way as our instinctive decision making. Even though the fact we assess every probability individually can make us assess them better by devoting it more time, it is not sure this actually leads to better estimations. What it does lead to however is formalisation of our biases which can lead to wrong decisions looking as the rational ones.

Finally there are limitations given by the ability of our brain to consciously process large amounts of information. When facing messy problems we are likely to omit some important factors in our model which can again lead to a wrong outcome posing as a rational one.

So what should we do?

You might be asking at this point so what is the alternative. I believe that when facing complicated non linear and hard to define problems our brain works better in the sub-conscious mode than in the rational one. This is how animals think and how humans have been thinking for a long time as well.

It is only recently that we have started to formalise our thinking and while this has lead to great developments in our society, most of these developments happened either by chance or in an expert mode. That is by people who were experts in their fields and therefore had an in depth specific knowledge which they could utilise for rational decision making – they had a good set of assumptions. Most decisions are however not restricted only to one or two fields in which we posses expertise and so there is no point in pretending we consciously understand the problem.

We should therefore accept that our assumptions are imperfect, that we are biased when building the model and that we are unable to fully consider even the limited set of assumptions we have and not take the outcome of our rational decision making as the only possible solution. Letting our brain process all the information itself and trusting our gut feeling might be just as effective. I would like to conclude with an excerpt from Steve Job’s commencement speech at Stanford University in 2005:

‘And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.’


Note: There are many problem structuring techniques to help overcome some of these disadvantages, in fact it is what I am doing my masters at LSE in right now, but they are often impractical to use in real life becuase of their complexity hence this post!