December 1, 2021 Author: Matthew Renze

Why do good people make bad decisions?

When a stranger makes a bad decision, our initial instinct is to assume that they lacked the necessary intelligence to choose the better of two options.

We often think to ourselves, “how stupid of them to not know any better?”

However, hindsight is 20/20. It’s really easy for us to assume that the correct decision, in hindsight, should have been obvious to a person making the bad decision.

I think most of us would agree that the average person is a good person of average intelligence. So, if it’s not due to malice or lack of intelligence, then what causes good people to make bad decisions?

As a data science consultant, I’ve spent my career learning how to make more effective decisions with data. In doing so, I’ve identified several common patterns that seem to repeat themselves in bad decision-making practices.

So, to help you make better decisions (and empathize with the bad decisions of others) here are my top reasons why good people make bad decisions.

Bad Data

The first step in any decision is to gather data. This can range from gathering sensory data through our eyes, ears, nose, etc. to collecting data from a clinical trial. Regardless of the type of data, having reliable data is very important in making good decisions.

Sometimes good people make bad decisions because they are lacking the necessary data. Other times, it’s because they don’t understand how to interpret the data they are seeing. In the worst case, it’s because the data are actually incorrect and thus lying to them about the true state of the world.

To avoid making bad decisions due to bad data, you need to learn what data are trustworthy and what data should not be trusted. This involves learning how to make good observations, identify reliable sources of information, and evaluate different types of data based on their level of trustworthiness.

Limited Perspectives

Our perspective in the world is our unique vantage point of reality. It is limited by what we can see, hear, feel, etc. at any given point in time. Our perception mediates our experience of the world and limits our ability to perceive objective reality by forcing us to see it through a very narrow window.

It’s like the parable of The Blind Men and the Elephant. Each blind observer can only feel a small portion of the elephant’s body, so they each interpret what they feel as a different animal based on their unique and limited perspective. Our perspective of reality is very much the same as that of the blind men.

Sometimes good people make bad decisions because they have a limited perspective of a situation. They only consider their unique perspective and not the perspectives of others. So, they are unable to see the big picture and thus make bad decisions based on limited information.

To prevent this, you should seek out multiple perspectives to give you a better understanding of the situation. Surround yourself with people who are different from you, ask them questions, and actually listen to their thoughts. When you evaluate multiple perspectives, it’s easy to find the areas of common agreement.

Human Biases

Biases distort the information we perceive. As humans, have a lot of them. We have cognitive biases, emotional biases, prejudices, logical fallacies, and many more. In fact, there are so many types of human biases that it would easily take an entire book to describe them all.

Sometimes good people make bad decisions because they are unaware of how their biases are affecting their rational decision-making processes. Our biases distort information in ways that create a skewed view of reality. This leads us to make sub-optimal decisions based on that skewed reality.

To combat your biases, first, you need to learn about the various biases we are subject to as human beings. Next, you need to learn how to minimize the effects of each kind of bias. Finally, you need to continuously practice identifying and mitigating your biases until it becomes habitual.

Bad Models

Models are abstract representations of reality that allow us to understand complex information about the world. They are a cognitive shortcut to help us quickly process new information by recognizing common patterns from previous examples. We each have access to a wide variety of models of various types.

For example, we have mental models like Occam’s Razor which tells us to prefer simpler explanations over complex ones. We have mathematical models, like risk-vs-reward calculations that show us how to assess risk. We also have visual models, physical models, statistical models, and computational models.

Sometimes good people make bad decisions because they are lacking the right model for a specific task. Other times, it’s because they are applying the wrong model for a specific situation. Still, other times, it’s simply because they don’t know how to use the model correctly to make an effective decision.

To prevent these types of errors, you should first develop a large toolbox of mental, mathematical, and computational models. Next, you need to learn how to apply these models effectively given the data and the context. Finally, you need to learn how to choose the best model for each situation.

Incorrect Beliefs

Our belief systems are composed of a series of narratives that we tell ourselves about the nature of the world. For example, “the scientific method leads me to objective truth”, “my years of experience provide me with common sense”, “my religion tells me right from wrong”, etc.

The value of our beliefs is largely determined by how effective they are at helping us make good decisions. If our beliefs lead us to make good decisions, then they are deemed to be a good set of beliefs. However, many of our good beliefs are just accidental. They coincidently lead us to good decisions but they are not actually based on objective reality.

Sometimes good people make bad decisions because their beliefs are incongruent with reality. Often, people can go their entire lives believing things that have never actually been challenged by reality. When this happens, they often try to deny reality rather than update their beliefs to mirror reality.

To avoid belief-based errors in judgment, you should regularly question your beliefs to see if they are consistent, coherent, and agree with evidence from reality. Then, if/when you find problems with your belief system, you need to be prepared to update your beliefs based on new evidence.

Our Desires

All humans experience cravings and aversions. We desire the things that make us feel good and we avoid the things that cause us suffering. The more we feed our cravings and aversions, the larger they tend to grow. If left unchecked, all of our decisions will eventually be the result of either a craving or an aversion.

Some people make bad decisions because of cravings or aversions. They choose to eat junk food because it tastes good. They avoid exercising because they don’t want to exert the effort. They are essentially letting their desires and fears make the decisions for them rather than their rational decision-making faculties.

To avoid making decisions based on cravings or aversions, you need to minimize their impact on your decision-making process. I recommend practicing mindfulness to learn how to maintain equanimity in the face of cravings and aversions. Also, be sure not to feed your cravings or aversions too much, or else they will continue to grow stronger.

Our Ego

Our ego is the part of our mind that gives us the experience of “self”. It’s the part of our mind that drives us to achieve great things. It observes, evaluates, plans, and responds to the world around it. However, it is often very fragile and will go to extraordinary lengths to protect itself from certain kinds of attack.

Sometimes good people make bad decisions because their ego is interfering with their judgment. We often are risk-averse to avoid the possibility of being wrong. We often paint ourselves into corners and can’t back ourselves out without bruising our ego. We can also just be plain stubborn in our convictions.

To prevent errors caused by ego, you need to recognize when your ego is your friend and when it’s your enemy. I recommend using mindfulness practices to become more familiar with your ego and how it behaves. Armed with this knowledge, you can learn how to minimize its effect on your decisions.

Ignoring Side Effects

For every decision, there will be some consequences of that decision. Often, the effects of a decision will include some negative side effects. These secondary effects can also cause other higher-order effects, and so on. This can make it difficult for us to predict the final outcome of any decision.

Sometimes good people make bad decisions because they ignore the side effects. Other times, they can’t see the long-term consequences of a short-term decision. Often, they don’t think about the higher-order effects and thus cannot see the unintended negative consequences of their decision.

To avoid errors caused by ignoring side effects, you need to consider the immediate effects of your decision. Think through the second-order effects and see how those effects might impact others. Try to rule out any unintended consequences of your decision by thinking outside the periphery of the immediate effects.

Ignoring Feedback

Feedback is a special type of data that we receive as the result of an action that we have taken. As a result, it’s an extremely valuable form of data because it helps us to understand the consequences of our actions. Feedback is fundamental to improving any kind of decision-making process over time.

Sometimes good people make bad decisions because they ignore or outright reject feedback. Other times, it’s because the delay between cause and effect is too long to effectively use feedback as a guide. Still, other times, the quality of the feedback isn’t high enough to make informed decisions based on it.

To avoid these types of mistakes, embrace learning from feedback to continuously improve your decision-making processes. Ask for honest feedback, critically evaluate it, and incorporate it into future decisions. Then, improve the quality, quantity, and speed of your feedback loops to improve learning.


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