Going with your gut
Recent studies from psychologists and neuroscientists are beginning to unravel how we use our intuition to make the right decisions.
Compared with careful analysis, intuition has always been viewed as a less effective approach to decision making. Whereas going with your first best feeling might seem efficient for snap decisions that are mostly routine and insignificant, for bigger decisions we usually favor a rational approach, for example by weighing written lists of pros and cons.
The importance of the rational approach to successful decision-making is being challenged by a growing body of research on intuition. German psychologist Gerd Gigerenzer, whose book “Gut Feelings: The Intelligence of the Unconscious” gained a lot of attention, maintains that rational decisions are slow and in some situations demand too much information. His research has shown that a decision procedure based on simple heuristics – unconscious mental processes – often yields better results than one based on logical reasoning. For example, as a result of the effect of the “recognition heuristic” on investment decisions, which basically means to go with what you know, portfolios unskilled investors made up of the most frequently recognized companies (“high-recognition portfolios”) did better on the stock market than professional ones. Or, as Prof. Gigerenzer puts it, “the intuitive wisdom of the semi-ignorant outperformed the calculations of the experts.”
As Prof. Gigerenzer sees it, a more detailed analysis does not necessarily improve a decision, but can often make it worse. In other words, the common belief that more information is always better might not apply to all situations because it can also distract us from focusing on the few simple aspects of a problem that matter: “The more options one has, the more possibilities for experiencing conflict arise, and the more difficult it becomes to compare the options.”
Does this mean that there might be a beneficial degree of ignorance when it comes to making decisions? Daniel Kahneman and Amos Tversky (1982) have famously shown that our decision-making procedures often consist of simple heuristics that guide us through an increasingly complex world teeming with information (see our blogpost on behavioral economics). And as society and businesses place greater emphasis on the speed and efficiency of decision-making, the intuitive approach might have its clear merits. However, as various psychologists have pointed out, heuristics are often prone to mistakes and biases. In terms of information, our gut feeling can be influenced by the “availability bias” -- the implicit assumption that the most easily available information is also the most relevant.
Comparing intuition directly with analytical reasoning, researchers from Boston College, George Mason University and Rice University identified conditions in which intuition is truly an effective way to make the right decisions. Their findings show that people can rely on intuition when making a broad evaluation that does not include a subset of additional decisions and when they have in-depth knowledge in the area of the subject, also referred to as domain expertise. So should you only trust your gut when you’re an expert? Organizational psychologist and co-author Michael Pratt’s conclusion is yes: “If you're working in an industry where you've risen through the ranks, your domain expertise will likely better serve an intuitive approach. If you gained your expertise in a different field, you may not have the background to rely as strongly on your intuition."
An area where effective fast decision making plays an important role is healthcare. Here studies have suggested that intuition should be seen as a highly important diagnostic procedure in its own right. In fact, a clinician's intuitive feeling that something is wrong appears to have even greater diagnostic value than most symptoms and signs, according to a study by researchers from Oxford and Belgium. On the other hand, for a gut feeling to arise in the first place, some sort of expertise or previous experience must already be there, perhaps hidden in the deep levels of our subconscious minds and memories. Intuition has been explained as the feeling that arises when your brain makes an instant connection between what's happening in the present and a similar circumstance from somewhere in your past. So if there is no experience to draw from within a domain, we most probably also will not be experiencing gut feelings about it.
Yet if intuition is more efficient than careful analysis, why go through the effort of a slow, deliberate reasoning process when we can make better decisions by using our intuition? One possible interpretation is that intuition could still qualify as reasoning, albeit in its most simple and unconscious form: one that makes the more effortful form possible in the first place.