Irrational Economist_ Making Decisions in a Dangerous World - Erwann Michel-Kerjan [31]
Our aim is to make these teachers partners in providing high school students with the decision skills needed to live happy and productive lives. Each teacher can adopt key elements in his or her curriculum as appropriate. Thus, for instance, algebra or statistics can be taught using expected value/utility or decision tree ideas, and the importance of mental frames or decision biases can easily be woven into English or history courses.
Our belief is that American high schools today do not equip students sufficiently to deal with the challenging world that surrounds them, as evidenced by high dropout rates, violence, teen pregnancy, and drug abuse. Rather than preach to these students to “just say no” to drugs, violence, and other destructive temptations, we encourage them to think through the issues they face for themselves and offer them the tools to do so (see Keelin et al., 2008).
To do this well, we must meet three challenges. First, we need to understand more deeply when, where, and why teenagers go astray in daily life. Clearly, this issue varies according to social class, problem context, presence of adult role models, culture, and individual characteristics such as age, IQ, temperament, and personality. Second, we need to cultivate deep knowledge about developmental psychology, since the adolescent’s brain is still forming. Young people seem not to integrate emotion and reason as effectively as adults. Imaging studies suggest that the brain of older adults shows less evidence of fear, anger, and hatred than that of young adults, who tend to be more impulsive and to dwell on negative feelings. Third, we need to decide what the focus of our efforts is: the person or the environment in which he or she makes a decision. Especially for adolescents, viewing decisions as vehicles to learn more about themselves and the world at large may be more important than optimizing any single decision in isolation, such as what summer job to take, whom to invite to prom, or what car to buy.
Figure 6.1 shows the elements of a good decision as defined by DEF. It represents a broad, well-tested view of what constitutes good decision analysis, including various behavioral components.
FIGURE 6.1 A Basic Decision Analytical Model
Source: Copyright 2008, Decision Education Foundation. All rights reserved.
Figure 6.2 provides a snapshot of the quality of the decision at a given point in time, in order to judge whether more work is needed. The practical challenge is to select decision-making methods that move the cursor in each link to the right efficiently, while periodically taking stock of the overall profile, without overshooting the optimal target. This is essentially a heuristic and iterative process, guided by intuition and decision coaching, in order to find the optimal position for each link. It is important to recognize that in the rational components of the model lie judgments and values that are behaviorally rooted and, thus, that deep biases may never fully surface or be completely eliminated. This is a key challenge for the aggregation assumption alluded to earlier.
The DEF approach, illustrated in Figure 6.3, is a well-founded, proven, and practical way to integrate traditional decision analysis with behavioral insights about the psychology and sociology of choice. The basic approach is “divide and conquer,” since the model breaks a complex decision down into separate components. Its formal part seeks to personalize the analysis by capturing attitudes and values that are specific to the decision maker (such as subjective beliefs, value tradeoffs, and risk aversion). Once the component pieces