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Evolutionary theory of human decision-making.
(The meta- and post-evaluation of decisions as the basic element of decision-making)
Abstract: This article seeks answers to the following questions – insufficiently resolved by research thus far – regarding the evolution of human decision-making: (1) what type of decision-making processes do humans employ; (2) why did these specific processes emerge; (3) how does the entire hierarchical decision-making system work. As a framework, this analysis employs the so-called “Matryoshka model”, which describes the human as a composite of behavioural programmes built on top of one another. The author explores the changes in the evolutionary environment and identifies the decision-making processes that emerged as successive layers in the course of evolution. He analyses how programme-controlled ethologically-based behaviour is broken down into individual decisions based on specific analyses. He further shows how a human, based on her impressions of the circumstances at hand – the meta-level analysis –, chooses whether to apply a decision-making model based on human ethology, or one using mental modules, symbols, cultural “rules of thumb” or rationality. It finally shows how certain situations can simultaneously render several decision-making models operative, and that in such situations our decision emerges from their complex interaction.
Economics and to some extent other social sciences, too, have up until the last decade
based their theories on the model of a rational, selfish and profit-maximising Homo
Oeconomicus (Friedman, M., 1953). Everyday experience and research suggests, however,
that humans employ diverse, often contradictory decision-making methods, such as for
example satisficing, i.e. selecting the first option that satisfies a particular need or selecting an
option that appears to address most needs rather than the “optimal” solution (Simon, H.,
1955); the expectation of reciprocity (Camerer, C. and Fehr, E., 2006); altruism (Harbaugh,
W. et al., 2007); the weighing of moral principles (Zaki, J. et. al., 2011; Gintis H. et al., 2005:
3-39); following symbols (Vohs, K. et. al., 2006) and prejudices (Bernhard, H. et al., 2006);
obeying emotions (Akerlof, G. and Shiller, R., 2009: 24-37); acquiescing to pressure from
peer group or authority (Sutter, M., 2009: 2247-2257); obeying gut-reactions (Gigerenzer, G.,
2004); and the use of non-rational rules (Kahneman, D. and Tversky, A., 1979; Rabin, M.,
2000). This wide spectrum of decision-making processes raises the following question: What
is the reason for this diversity and how is the choice of the dominant factor in a given
decision-making situation determined?
Several scholars have based their interpretation of human behaviour on hierarchically
ordered programmes of behaviour. MacLean was the first to develop a model of the brain that
employs three decision-making levels (MacLean, 1990). Donald identified three major
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transitions on the evolutionary road leading from primates to humans, each of which he
associated with a “complex of new cognitive modules” (Donald, M. 1991: 29). Jablonka and
Lamb argued for a three-level structure of a genetically based behavioural programme
(Jablonka, E. and Lamb, M., 2005: 341-344). Frans de Waal employed a three-tiered model of
morality – moral sentiments, the community’s moral expectations and moral judgment (Waal,
F., 2006). Differently from the three-tier system, the so-called dual process model has
proposed a two-level model of decision-making – a quick and automatic first level and a
slower secondary system that applies rational consideration as well (Evans, J., 2003 and
Kahneman, D., 2011: 21). E. Ostrom refers to the instinct of equity, then to social norms, to
heuristic rules and finally to the model of bounded rationality as decision-making levels built
on top of one another (Ostrom, E., 2010: 659-660).
Research has thus far failed to sufficiently clarify three basic questions: 1) why does a
given number of levels exist; 2) why did these particular levels emerge; and 3) how the entire
system of hierarchically structured decision-making works. We seek the answers to these
questions based on the so-called “Matryoshka” model, which describes the human being by
relying behavioural programmes that she developed in response to the challenges she
encountered in the course of biological and subsequently social evolution (Marosan, Gy.,
2011: 472). In this study, the Matryoshka model is adapted to human decision-making as we
trace historical changes in the evolutionary environment and then identify the decision-
making processes that were formed in the course of evolution and built on top of one another.
This provides the foundation for the general model of human decision-making (see Graph 1).
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1. Graph 1: The „Matryoshka” model of human decision-making
The (human) ethological level of decision-making
On her way towards becoming human, the Hominid species was basically composed of
pro-social individuals that lived in communities (Ladeveze, S. et. al., 2011: 83). Her
behaviour can be best understood based on MacLean’s model of three “decision-making
centres” built on top of one another. (LeDoux, J., 2000: 160) At the lowest level is the
“wired” “reptile-brain”, which operates a so-called “click-whirr” mechanism. (Cialdini, R.
2001. 3.) The so-called “mammalian brain” is built on top of the lowest level; it has grown as
compared to the earlier, reptilian version, primarily in response to challenges emanating from
life in a society, and it is capable – through individual learning – of pattern recognition
(Rowe, T. et. al., 2011: 955). The “primate brain”, which occupies the highest level, can
identify patterns of social experience as well, and that in turn serves as the basis of emotional
responses that generate decisions (Flack, J. et al., 2007: 1581).
As a result of continuously emerging new problems, beings instinctively “choose” at
which “decision-making” level they will “handle” a problem, and then apply the model of the
given level and select the appropriate response. Since identifying threats and survival are the
fundamental problems of existence, even highly evolved beings – including humans – react to
such challenges with pre-determined behavioural patterns that match the given trigger. The
animal brain that “occupies” our modern skull induces a reflexive response to situations of
3
danger even before we can analyse the given situation rationally (Panksepp, J., 2004). Thus
whenever the modern human encounters – fortunately rarely – the combination of life-
threatening circumstances and pressing time constraints (e.g. a ship accident), “animalistic”
behaviour overwrites the “human” factor in her decision-making (Frey, B. S. et. al., 2010).
At the same time, even before the emergence of the modern human, the optimisation of
time expended the search for food, the recurring problems of one’s status within the
community and mutual assistance become ever more important. It is the ethological
“programmes” at the higher levels of the MacLean model that offer adaptive solutions to
problems. This is the point at which emotions begin to play a role in controlling behaviour,
predominantly in response to the challenges posed by the management of social relations.
Emotions are “instinctively” developed attitudes that prompt the given being’s adaptive
action – which is appropriate for the reigning situation – when facing a particular problem
(Scherer, K., 2005: 699-702.) Life experience progressively activates emotion-generating
programmes, fills them with information and then turns them on. Unless it requires an
immediate reflexive response, a problem triggers the emotion-generating programme, which
alerts the entire body for a response, and then proceeds to guide the individual through the
behaviour that is appropriate to the given situation. Though as compared to predetermined
behavioural patterns that are engaged in response to triggers, behaviour based on emotional
responses is slower, it also allows for a more flexible reaction (Nesse, R. et. al., 2009: 129).
Emotions are especially crucial for regulating social behaviour. That is what makes the
decisions of primates – as revealed in experiments –, which bear a striking resemblance to the
reactions of humans – and which are also influenced by emotions – intelligible to us (Gomes,
C. et. al., 2011: 2183). The impact of these emotion-generating programmes manifests itself
in the modern human – insofar as the given conditions recall the general conditions that
prevailed at the time the programmes developed – in terms risk assessment, sexual stimuli,
family bonds, status within the group (dominance or submission) or the keen awareness of
strict reciprocity. Research has shown that loss aversion – i.e. when the fear of expected
losses outweighs the hope of potential benefits – tends to prevail in human behaviour
(Kahneman, D., 2003: 164). The same behavioural patterns have also been identified in apes,
however, which suggests that the roots of this attitude are found in evolutionary biology
(Chen, K. M. and Santos, L., 2009). Other research has established a clear link between the
activity of the “amygdala” and the so-called framing effect – that is when we apply
experience gathered from previous direct encounters rather than assessing the facts
4
objectively –, which also suggests that emotional assessment plays a key role in decision-
making (Martino, B. et al., 2010: 3788).
As the above show, even the innermost core of the Matryoshka doll is complex. The
effect of each of these “radiates out” to the later levels and may influence human behaviour in
complex ways. Nevertheless, in the following analysis we will refer to them as a single level
– this will obviously be a simplification – in the context of human decision-making, that is as
the level that serves as the basis for the ethological programme that we share with primates.
The decision-making level of mental “modules”
The fundamentally new phase on the road towards the emergence of the human began
with the change that brought about the anatomically modern human (AMH) in the period
between roughly 1.5 million BCE to 200,000 BCE. With regard to decision-making, the most
important event in this period was the substantial growth in brain-size from 850cm³ to some
1350cm³, in parallel with major changes in the brain structure. For the most part, these
changes occurred some 800,000-200,000 years ago (Potts, R., 2011: 43). From here on
behaviour is controlled by turning on the suddenly massively enlarged portions of the brain.
The increase in brain size comes at a price: it encumbers the process of birth, makes growing
up more risky and requires greater energy and time commitments. Hence a larger brain is only
“worth it” if it significantly enhances fitness. And the most recent research clearly shows that
the larger brain has indeed been efficient at improving fitness (Navarrate, et al., 2011: 91).
The impact that this level with its unique features has on human behaviour has been
revealed by evolutionary psychology (EP). To describe circumstances that embody particular
challenges, EP introduced the concept of the environment of evolutionary adaptedness (EEA).
(Incidentally, the Matryoshka model posits that this is not the only period which is an
environment of evolutionary adaptedness, but so is in fact every period of evolutionary
history that gave rise to challenges that were “unmanageable” with the hitherto existing
instruments and thus elicited the “crafting” of new instruments). At the same time EP
suggested that such an environment leaves an imprint in the brain, whose effect is that
problem resolution units are formed that work as modules. These modules specialise in
identifying and solving certain types of problems (Cosmides, L. and Tooby J., 1997). The
mental modules are stable components of the brain and play a functional role influencing
behaviour (Barrett, J., 2004: 5). The problems that humans encounter – mating, identifying
threats, testing reliability, exchange “services”, identifying status – render the appropriate
module “operational”, and those in turn develop particular attitudes, preferences that push
5
behaviour in direction of an adapted response. Modules are slower than the ethological
programmes from earlier periods, but they shape behaviour with a finer and more accurate
attunement to an increasingly complex environment.
At first, modules were triggered by ethological signs, but in later periods they were
“turned on” by the social experiences gathered in the course of a life spent within a
community. Still later, symbols created during subsequent stages of development were also
capable of setting modules off. The phenomenon of priming, which is manifested in
experiments, points to humans’ persisting sensitivity to symbols. When a module - serving the
solution of a specific problem - is “activated” by the associated symbol, human behaviour,
even without conscious deliberation, changes appreciably (Tulring, E. et al., 1990: 301). The
effect of priming can be demonstrated in the context of a whole series of human behaviours,
be it rule-abiding, cheating, generous or selfish. Thus for example economic behaviour is
“instinctively” influenced if either symbols of money or the concept of money crop up in a
given situation (Vohs, K. et al., 2006: 1154). Money exerts a motivating effect even if
experimental subjects are only subliminally aware of its presence (Pessiglione, M. et al.,
2007: 904). Prosocial behaviour also influences decision-making when the environment in
which a given decision is made manifests symbols that invoke children (Gino, F., 2011).
With regard to economic decisions, mental modules are especially important on
account of their role in shaping preferences (Behrens, T., et al., 2009: 1161). Preferences are
criteria of evaluation that control our choices in life without conscious deliberation. Due to
her circumstances, the creature that gradually morphs into a human has tended to value small
but immediate profits and significantly “discounts” greater but more remote benefits. The
instinctive and large-scale discounting of the future is therefore a consequence of this epoch.
Research has shown that the “closer” historically speaking an individual is to the period when
humans emerged, or the closer she feels to that period, the less she tends to value the future.
(Jones, D., 2009: 782-783 and Kirby, K. et al., 2002: 303). Similarly, the influence of the
workings of modules can be made out when a human living in a modern environment makes
decisions concerning support for the needy in society (Petersen, M., 2012).
One of the still effective and instinctually manifested “imprints” stemming from the
persistent privation humans endured in the course of evolution is that we tend to take more
than we need of things that we have little of or which are available for free. We tend to see
things that we sense are or might become scarce as more valuable, and we are willing to
spend more on these. A similar logic applies to things that we have to compete for and which
we may lose; we tend to value these things more – and are willing to pay more for them –
6
than we would in a situation in which we would not have to compete for them. In the context
of modern market economies, those in the business of selling items regularly exploit these
instinctive preferences by creating situations that trigger the application of these preferences
(Cialdini, R., 2001).
Beginning with this period, considerations regarding status in a group of increasing
size – in which we need to be more flexible and more refined as compared to earlier periods –
are also governed by mental modules. One of the “side effects” of the operation of the status
module is the setting that we not only assess what we have in terms of how it satisfies our
needs but also in comparison to what others have. We begin to weigh whether and to what
degree we should sacrifice resources to maintain our position and to improve our reputation
(Fliessbach, K. et. al., 2007: 1307). Because of their ability to improve group fitness, mental
modules simultaneously generate altruism that transcends blood ties, as well as ethnocentric
behaviour vis-à-vis foreign groups.
The decision-making level governed by symbols
Another turning point en route to becoming human occurred roughly 200,000 years
ago. That was when after growing continuously for millions of years, the increase in brain
size stopped and stabilised around 1350 cm³. This fact points to an evolutionary challenge.
There are two possibilities that might have had an impact on increasing fitness: the emergence
of the cultural sphere or the “development” of a more resistant body structure (Navarrate, et
al., 2011: 92). Research shows that the evolution of humans – some 100,000 years later –
clearly took a turn towards culture and symbolic behaviour (Hare, B., 2011: 293). The use of
symbolic objects (decorations, jewellery) becomes more frequent, as do symbolic activities
(funerals, celebrations), symbolic creations (paintings, sculptures, drawings), and symbolic
communication (speech) (Rossano, M., 2010: S 89). That is why this turn may be aptly
characterised as the “symbolic revolution” (Knight et al., 1995: 78-80).
Two new important developments appear that affect decision-making. For one, this is
when the – still ongoing – process begins wherein humans start to use instruments of culture
to establish a sphere between themselves and the natural environment. Though this sphere
enhances fitness, it also raises some particular challenges of its own (Henshilwood, C. et al.,
2011). At the same time a new behaviour-generating level is “built” in the human brain above
the level of mental modules. This is the level of mental constructs, consisting of symbolic
signs, that is language and symbolic thought (Rossano, M., 2010). The responsibility of
collecting, recording, testing and then transmitting or passing on individual and community
7
experiences by the way of language or with the help of the elements of material culture
increasingly falls to this level. Speech is of fundamental importance because it can help to
significantly bolster the efficacy of common decisions (Koriat, A., 2012: 360). These two
factors together have led to a significant growth in fitness, which is demonstrated by the
growth in size and complexity of groups of humans living in communities.
The increase in group size played an important role in the spread of modern human
behaviour (Powel, A. et al. 2009: 1298). Growing group size, migration between groups, and
the exchange of knowledge are fundamental features of the survival and innovation of
cultures. Research amply demonstrates that populations grew by leaps and bounds in the
period indicated (Mellars, P. et. al., 2011: 623.) The increase in the number of individuals also
makes encounters with members of outsider groups more likely. The development of symbols
was in fact necessitated by the desire to accurately and quickly establish group identity as well
as the individual’s status within one’s own community (Efferson, Ch. et. al., 2008: 1844).
Ultimately these were the processes that led to the spread of modern humans across the entire
planet.
From the vantage point of decision-making this phase of evolution marked a
fundamentally new situation. First, with the development of the sphere of material culture a
gradually expanding protective layer emerges that shields the human from her natural
environment. As a result, the situation of the average human becomes more standardised and
predictable. A growing proportion of decisions pertains to routine situations that do not
involve pressing matters, and there is also more time to make these decisions. At the same
time, however, decisions require longer-term commitment and the weighing of forward-
looking considerations. Hence the importance of deliberation increases.
Second, the environment becomes suffused with symbols and these substantially
reorder the ranking of preferences as “prescribed” initially by instincts, and subsequently by
mental modules. Individual and communal experience can henceforth be laid down and
transmitted in the form of a set of rules made up of symbols – mental models. One segment of
these rules refers to the “management” of the natural and material environment (i.e. crafting
and using instruments). Another portion is made up of the social rules – norms – guiding
social behaviour. Norms are rules regarding the generally accepted understanding of desirable
behaviour within the community. They are socially – mostly by the way of language –
transmitted rules that everyone is required to abide by and to enforce (Bendor, J. et al., 2001:
1494-1495). The decisions of social creatures – e.g. offering or refusing support – are
8
increasingly supplanted by symbolic signs, and they are increasingly controlled by symbolic
rules (Bernhard, H. et al., 2006: 912).
Third, this is the time when the human’s ability to create – based on mental models –
so-called counterfactual constructions emerges. Counterfactuals are things that do not exist in
reality but are artefacts created by our minds, and they offer the possibility of conducting
thought experiments with them as if they were real (Kray, L. J. et al.: 2010). A “world model” created out of concepts allows for the possibility of thinking through “what if…” type of questions. That is how the human becomes capable of forming a clear image of the outcomes of potential actions, an image that is suitable for informing her decisions.
Based on the aforementioned, this is when human decision-making as we understand it
today emerges. The decision “breaks away” and becomes distinct from previous “programme
controlled” behaviour; it is now a singular act, a choice rendered on the basis of analysing the
specific problems of a particular situation, wherein the methods are selected to match the
given problem. Experiments shows that unlike animals, whose behaviour is marked by a
continuous search for nourishment, the human is capable of choosing between two different
modes of searching, one based on a continuous and the other on a discrete decision (Kolling,
N. et. al., 2012: 95). From here on out therefore humans can identify decision-making
situations (indeed, with the help of language they can even write it down), can think through
the potential courses of action, predict the outcomes associated with each of them and can
also pair the respective outcomes with evaluative information.
The surviving legacy of this period – which appears when the right conditions apply –
is the widespread application of symbols in situations that require quick decisions and/or
situations involving uncertainty. That is why corporations turn their products into brands: they
label their wares and incessantly emphasise the benefits of the latter; they associate pleasant
images with the labels. Hence when quick decisions need to be made while shopping in a
supermarket, we choose a product from the mass of options whose symbol evokes a pleasant
memory that is instinctively recalled from our mind. And this is also how politicians use
ideological/national symbols (flags and insignia) so that they can “push” voters’ judgment in
the desired direction (Hassin, R. et. al., 2007: 19.757).
Indicators of social status constitute a distinct class among those symbols that
influence decision-making. Humans tend to rely to a greater degree on the opinion of persons
who wield symbols expressing authority – power and/or knowledge. That is no different
today: the opinion of high status individuals is more likely to be accepted in the course of
9
shopping by consumers who are “on alert” to follow status, and they will also more likely be
followed by citizens during elections. The characteristic feature of this period is that exchange
– which is growing in importance – both within and between communities still predominantly
occurs in the form of gifts. A gift is a symbolic act that serves to bolster the co-operation and
coexistence of individuals and communities. This explains a rule that persists to this day: it is
improper to reject gifts and it is obligatory to reciprocate them. Reciprocal gift-giving reaches
beyond the family and extends to networks that encompass the community at large. (Ziegler,
R., 2008: 108). This culturally fixed reaction is exploited by the “covert persuaders” of the
modern age when they want to entice us into buying by offering food samples in shopping
malls, when they send product samples by mail, or when they seek to influence our opinions
with small gifts (Cialdini, R.: 2001).
The decision-making level that is influenced by cultural rules
The new stage in the process of social evolution, which occurred 12,000-8,000 BCE and is
called the Neolithic revolution, also raised novel adaptive problems. The community
gradually become separated from the natural environment by a socially crafted “shell”
furnished with cultural creations. That was when the basic common structure – called cultural
universal by anthropologists – of all societies known today emerged (Brown, D. E.: 1991).
The macro structure of the communities’ cultural universal is almost identical due to the
similarities in their lifestyle. Yet their micro-structure – the specific symbols, signs, terms,
myths, decorations, songs and rites – differ significantly. This makes it possible to easily and
quickly identify whether someone belongs to the group or not, and to decide on that basis how
to relate to her. Group identity becomes a fundamental element of group fitness (Efferson, C.,
et. al.: 2008).
With the emergence of settlements and production, the things necessary for life
become “commodities”, that is they are culturally produced needs that are acquired through
exchange and satisfied through a cultural act. One result is that circumstances become
predictable, threats decline and for the most part decisions tend not to be pressing. At the
same time, however, the complexity of decision-making situations increases along with the
number of options. Two distinct classes of decisions can be distinguished: the handling of
continuously recurring issues and decisions concerning the long-term survival of the
community or the individual. To handle this duality, the meta-level analysis of the decision-
making situation and the decision narrowly understood (i.e. determining potential outcomes,
clarifying evaluation criteria, weighing outcomes and finally choice based on the
10
aforementioned) are “separated” during the decision-making. Before rendering a decision, the
decision-maker uses her subjective impressions of the circumstances at hand to “select” the
level at which she will handle the given decision, and then proceeds to apply the methods
associated with the given level.
At the same time, in order to facilitate orientation in increasingly complex situations,
decision-making (behavioural) rules are created based on collective experience. This is when
rules of thumbs (RoTs) emerge, which are rooted in tradition and are culturally transmitted.
They represent collectively tried and tested solutions for problems of everyday life. These
rules – which for the most part are considered not to be in need of any justification (“that’s
just the way it’s done”) and are often referred to as heuristics - are derived from everyday
behaviour that has mostly proven successful. RoTs are therefore decision-making models
applicable to a wide array of situations and they lay down the collective experience and
transmit it with the help of language. They may provide the basis for technological processes
(e.g. how to produce clothing or food), just as they can provide guidance for handling social
situations, even in the form of prejudices (stereotypes).
From here on the “programming” of the younger generation increasingly takes places
through socialisation. RoT-s are gradually transmitted between generations through everyday
situations. Their application, however, requires careful consideration, unlike the preferences
of mental modules or behaviour controlled by symbols. Though rules themselves are never
questioned, what is a subject of analysis is whether the given circumstances mandate that a
particular rule be followed, and if so to what degree it must be followed. A characteristic
“imprint” of this age are aphorisms – which are now also established through mental culture –
that persist even today through traditions of word of mouth. Once it was an ethological
programme that made the individual prefer immediate small benefits, then it was the mental
module and then, finally, it was the symbol. But from this age on it is verbally transmitted
rules – e.g. “better an egg today than a hen tomorrow” – that steer the individual towards
selecting the quicker, albeit seemingly less beneficial option. This is also how the so-called
“golden rules” – e.g. “One should not treat others in ways that one would not like to be
treated” – are created and transmitted as rules establishing behavioural principles deemed
desirable by the community. During the next stage, the institutional epoch, these rules are
transformed into divine commandments by the civilisations and religions of the period.
The level of decisions determined by “social institutions”
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During the “institutional revolution” that occurred 5,000-3,000 BCE – when the social
institutions, e.g. the state, market, politics, laws, morals, religion and ideology, that still play a
key role today were born – conditions of decision-making were once against significantly
altered. Institutions are structures built on rules, roles and relations, and they are operated
based on a system of rewards and penalties. They steer human behaviour by creating
regulated and intelligible frameworks (Knight, J. and Sened, I., 2001: Chapter 1). Their
function is to ensure the integration of hierarchically ordered societies that become
progressively larger in size and are heterogeneous in terms of the division of labour, power
and culture.
Institutions standardise situations, problems and behaviour, and thus everyday life – in
spite of the growing complexity of society – becomes more manageable and also more stable
in the long-run. Decision-making situations become standardised and recurring, though at the
same time a growing proportion of them – the organisation of production and community,
collective action and investments – require long-term planning and the exploration of the
chain of consequences. For the most part, there is enough time for thoughtful deliberation.
The information necessary for a controlled decision-making process and the tried and tested
decision-making methods (RoT) are available, and there are even experts who may be
consulted. The experience accumulated and systematically transmitted over a long line of
generations helps to orient the decision-maker. In light of the aforementioned, the expectation
of rational decision-making is applied to an ever larger spectrum of decisions.
From here on out rational decision means: create options, quantify (with a “cost-
benefit” analysis) the outcomes, collect the values that enter into the thought process,
construct a model of comparison based on the aforementioned, and then “calculate” the best
version based on the information collected. With the spread of bourgeois societies the “cost-
benefit” analysis gains ground in all walks of life. The individual learns to think in
alternatives and to consider benefits forfeited, i.e. opportunity costs. Economic agents realise
the value of time invested and acquire the ability to discount – with due consideration – the
future. (This makes it possible to calculate to what degree it is worthwhile to follow the old
maxim of “Better an egg today than a hen tomorrow!”) Mathematical models of decisions are
gradually developed, and they extend to methods for mathematically capturing uncertainty
and probabilities (Bernstein, P.: 1996).
The space for rational decisions widens until the middle of the 20th century.
Enterprises specialise in the collection of information necessary for making decisions, in the
creation of precise decision-making rules and methods for enabling conscious deliberation.
12
The number and influence of these companies grows continuously. The number of
institutions and individuals that deal with the issue of decision-making – in both economic
and public life – increases substantially. At the same time the emergence of market exchanges
as universal phenomena, and the vast spread of social interactions gradually lead to the
emergence of a completely new type of problem. Individuals have to make an increasing
number of rather complex and often not very important decisions very quickly. These days a
person decides anywhere from 2,500-10,000 issues a day! (Douglas, K., 2012: 39). As a
result, a requirement of total rationality would practically render an individual or a group
totally incapable of making a decision. Consequently, the space for rational decisions – which
had previously been expanding for centuries – gradually begins to narrow.
One of the first signs is that the model of bounded rationality makes its appearance in
economic decision-making theory (Simon, H.: 1955). Scholars recognise that the subjects of
economic transactions, decision-makers, acquiesce to rendering “satisficing” choices rather
than making the “best” – read “absolutely” rational – decisions. Rather than weighing all
options, information and considerations, they base their decision on readily accessible and
inexpensively identifiable alternatives, information and models. This is also reflected in the
dual-process theory of decision-making, which distinguishes intuitive (quick and emotional)
and rational (slower and controlled) decision-making (Wen-Jui Kuo et al., 2009: 519). But the
approach offered by the so-called search theory also points in this direction (Caplin, A. et al.,
2011: 2899).
The other important insight that leads to a re-evaluation of the role of perfect
rationality is that on account of the great number of decisions and the inevitable uncertainty of
many situations, subjective satisfaction with the decision is fundamentally determined by the
decision-maker’s assessment of her now non-retractable choice. The importance of this
problem was recognised half a century ago when the phenomenon of cognitive dissonance
was discovered (Festinger, L.: 1957). Cognitive dissonance explains the odd behavioural
pattern wherein following her decision, the decision-maker picks and chooses among the
available information to select those that appear to justify her choice. Experiments show that
even if her choice cannot be regarded as the best, the decision-maker only “accepts”
information that verifies the correctness of her earlier decision. The decisive role of the post-
decision – re-rationalisation – stage is also supported by the fact that in certain cases the
individual – regardless of her actual decision – is capable of making every decision seem
acceptable to her (Hall, L., and Johnsson, P., 2009: 26.).
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In an overwhelming majority of societies, the consumer of the 21st century is
confronted with a vast and confusing selection, the spectrum of considerations is boundless,
the totality of information that is needed for a decision is impossible to collect. As a result of
the aforementioned a comparison is unattainable and, consequently, it is (nigh) impossible to
make a rational decision. The decision might be accelerated and become partially instinctual
if the choices are based on models established during earlier stages of evolution –
“animalistic” instincts, mental modules, symbols or heuristic rules (of thumb). Research has
shown that decision-makers consciously tend to avoid decisions that are tiresome and require
attention and analysis (McGuire, J. et al., 2010: 7922). It was further demonstrated that a
reduction in the number of options that may be selected does not necessarily make the
decision-maker more frustrated, and in fact may have the effect of raising levels of
satisfaction. The decline of rational analysis is also supported by the fact that experiments
have shown – precisely in the case of complex decisions with substantial impact on costs –
that decision-makers tend to resort to a peculiar rule of deliberation-without-attention
(Dijksterhuis, A. et al., 2006: 1005).
The burden of rational deliberation – and also its scope – may be further reduced by
moulding the choices available to the decision-maker – often covertly – and hence nudging
her in certain directions without making her aware of this influence. This method is described
by the term choice architecture (Thaler, R. and Sunstein, C., 2008: 5). Essentially, this
concept revolves around framing a proper decision-making situation – generally in a subtle
and imperceptible manner, but occasionally in a shrill and overt way – that pressures the
decision-makers in a previously designated direction. The authors referenced above call this
“solution” nudge, that is exerting an influence with subliminal messages and subtle signs.
Research discovered a characteristic and striking example of this when evaluating a campaign
that sought to stimulate organ donations (Johnson, E. et al., 2003).
How does the decision-making system work?
This article has reviewed the multi-level hierarchical decision making “programme” of
humans, which was created in the course of evolution. Before making a decision, the
individual selects – based on her impressions of the given situation – at what evolutionary
level she will “deal” with the given problem. Depending on the risks involved and the degree
of confusion in the situation at hand, the importance of the decision and its pressing nature,
the unique nature of the choice to be made and the degree of personal involvement, she will
proceed “backwards” on the evolutionary “ladder”, and employ decision-making models from
14
increasingly earlier stages of evolution. Even though we would like to arrive at a simple
decision-making model – for example a two-level system that employs a quick and emotional
method on the one hand, and a slow and rational model on the other –, in reality the multi-
level system can never be turned off.
An understanding of the multilevel system is further encumbered by the fact that a
problem that emerges may simultaneously activate the operation of several decision-making
models, and the decision-making models of earlier periods will radiate out to the higher level
and thereby contribute to the decision. Thus in our developed world the emotional level and
the level of mental modules are almost always “turned on”, and in a decision-making situation
the modern human, too, will automatically seek the assistance of guiding symbols. And
ultimately any and all of these may contribute to a decision; the final choice will be
influenced by their mutual interaction – or their competition with one another, if you prefer
(Sanfey, A. et. al., 2003). One consequence of the aforementioned is that a decision-maker
who is generally considered rational is not necessarily governed by the rules of rational
decision-making.
On account of her biological and social “programming”, a human being may be either
coolly calculating, led by emotions, governed by symbols, altruistic, likely to succumb to
momentary impressions or plain “irrational”. Which of her “selves” will predominate in any
given decision will depend on her subjective impressions of the situation at hand. She will
“relate” differently to the decision if she perceives the situation as pressing, full of threats or
unusual, as compared to a situation seen as the polar opposite of the aforementioned.
Similarly, her attitude will be different if she senses that the decision will have a fundamental
impact on her life or that it leads to a long-term commitment, and vice versa. She will choose
decision-making models based on her impressions, and if her opinion of a given decision-
making situation is altered then she will adjust her preferred model of decision-making
accordingly. This insight has been applied in the economy and politics for a while now:
decision-makers are lured into a previously designed decision trap and thereby their decisions
are substantially preordained regardless of their will.
15
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