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The Science Behind How We Make Decisions

September 30, 2016
Eduardo Mangarelli, Director of Innovation and Technology at Microsoft Latin America, gave a talk during the Student Conference titled “The Anatomy of Decision-Making.”
https://youtu.be/6N2UfNudD2s?si=JiC2dFwEwxlxsYe6

He began his lecture by stating that “we make decisions all the time, but not in the same way or using the same mechanisms. Decisions are not always rational; they have a strong emotional component.”

He also stated that “the way we ask questions shapes our decisions.”

Drawing an analogy with technology, Mangarelli argued that people “have built-in bugs, and that understanding them allows us to control and manage them.”

Among the psychological biases he lists is the concept of loss aversion, which refers to the tendency to always seek to minimize losses—that is, people’s tendency to prefer not losing over winning.

He also spoke about confirmation bias, which refers to the fact that “when we make a decision, we filter information in order to later justify that the decision we made is the right one.”

He pointed out that intuition is one of the factors that influence decision-making. “Once we make a decision, we don’t try to verify that it’s the right one; instead, we come up with a justification to back it up.”

“Making decisions is exhausting and causes us stress,” says Mangarelli, adding, “That’s why it’s important to have a routine—it helps us save time and simplify our decisions. It’s also important to set limits, narrow down our options, and set time limits.”

At the end of the conference, Mangarelli emphasized the importance of understanding bugs “in order to know the rules of the game, and to be able to plan and control every move.”