Paralysis by Analysis

Conventional wisdom dictates that when making a decision the more options we have, the better.  And I admit immediately that I subscribe to this philosophy.

But I am beginning to question the universality of this idea.

Enter Analysis Paralysis.  The gist is that having too many options actually stifles decision-making. 

But wait.  How can more options be worse?  It does seem to defy logic.  But as we look at some examples, like those included in the Wikipedia article above, it becomes clear.

We see it in the real world all the time.  My old fallback, Gladwell, discusses the example of 401k participation in the workplace.  Everybody wants control over their own retirement investments.  However, as the number of available 401k investment options increases, participation in the program actually decreases.

He also discusses a more everyday example: that of jelly.  Studies were conducted in which free samples of jelly were given to shoppers at a grocery store.  One group was offered 6 types of jelly, the other 24.  The group offered 6 types ended up purchasing statistically more jelly than the 24 group.

So what happens?  We face too many options.  We become paralyzed by the abundance of choices before us and we choose to do nothing. 

Why?

It is not the options themselves that pose a challenge.  It is the fear of choosing the wrong one. 

Think about it: if you have just 1 option, your odds of picking the right one are 100%.  No problem! 

If you have 2 options, now the chances are 50% that you will pick the optimal one.

If you have 24 options (like the jelly), now you only have a 4% chance that you will pick the best one.

This is exactly what causes the paralysis.  It's great to have so many choices, but now you face the problem of how to pick the best one.  As free people we would normally balk at the idea of someone limiting our choices.  But in actuality, a little limiting may be exactly what we need.

Let's go back to our 401k example.  Say you have 100 options for your plan.  Now you have only a 1% chance of choosing the best one.  Paralysis.  So you sit down with your financial planner, and what do you do?  Do you ask him for more options?  Of course not!  You ask him which ones he recommends.  Why?  Because you are trying to get him to limit your options for you.  You want him to pick the best 1 or 2 or 3 to make it easier for you to decide.

Of course, in reality, this is not limiting your options.  You still have the 100.  But you are removing the fear of making the wrong choice by invoking the advice of an expert.  Maybe the expert is wrong.  It doesn't matter.  The fear has been removed, or at least mitigated.

The point?  Fear of making the wrong choice leads to paralysis.  So we need to remove the fear.  As in the above example, this can often be done with information.  But in some cases it may not be possible or practical to accumulate all the needed information about each option.

So, back to our opening statement.  Yes, options are great.  But we have to pare them down to a manageable amount.  How do we do that in the general case?  Where is the balancing point?  These are excellent questions.  And I certainly don't have the answer.

But as I've said before, you can't solve a problem if you don't know what it is.  Now we know what the problem is.  That's a step in the right direction.   

Perception

I wrote a post about Behavorial Context Projection some time ago.  Soon after, I read a quote that summarizes it oh-so eloquently:

We don't see things as they are.  We see things as we are.

Flawless!

If You Only Knew the Power of the Jerk Side

This post is kind of a continuation of some previous posts on this subject.  Let's review some quotations, shall we?

"Man, you really don't care!" - Carlitos (The original one... still one of the best)


"Nobody is gonna hate you as I hate you.  Because they are afraid of you kill them with your ice feelings! :p" - Fernan

"I don't drink warm beer." - Me
"Right, you like beer the same temperature as your heart?" - Dom
"No, it would freeze." - Me

"You have no feelings!" - Noelia

"I can't understand how much you don't care.  It's like trying to understand how Jehovah has always existed." - Chris

Well, that was fun!

The C.A.B.A. English Congregation

Wednesday was the day we have all been waiting for... some of us for years.  Our little English group was approved to become a congregation!  And there was much rejoicing!

March 1st will be our first meeting as a congregation.  Brings a tear to me eye...

The group has worked very hard for this.  We have had a lot of growth, including families moving in, Bethel couples moving in, and a student getting baptized.  It was time to form a congregation. 

There is much more work ahead, but everyone is excited and ready to roll.

The Fall of Keynesianism

Those of you who know me also know that I think the world economy is going to collapse soon.  It will start with the US.  Here's a peek at the current US debt.  Notice the amounts owed by every single taxpayer, especially at the lower right:

http://usdebtclock.org/

It will get the point where the US won't even be able to pay the interest on the money it owes.  And that $14 trillion figure doesn't even take into account private, business, and especially financial sector debt.  All of these total over $100 trillion.  Unsustainable.  And when the camel's back breaks, it will take the liquidity of the world down with it.

It will be, quite literally, insanity.   

This is of course a highly charged idea, and I don't want to get involved in the politics of it... at least not yet.  But I saw this great quote today that I just had to share:

The first lesson of economics is that we live in a world of scarcity. There is never enough of anything to satisfy all those who want it. The first lesson of politics is to ignore the first lesson of economics.

— Thomas Sowell

Enough said.