We like to think we make good choices throughout the day, but the fact that the largest fast-food restaurant in the country sold over $20 billion in fried food last year suggests we don’t always make decisions that are best for us. Is it because we have too many choices? Do we lack willpower? Or do we just apply flawed logic? It’s all of the above, and while we, One Item are specifically focused on helping people make the best choice for achieving a specific goal today, a new report from Dr. Mina Mahmoudi shows that sometimes we use the wrong logic in making certain decisions. Mahmoudi says that when people are faced with saving $5 on a $20 item vs. saving $5 on a $100 item, they apply ratio thinking and choose the $20 item because the ratio of savings (so-called ratio difference theory) is greater than on the $100 item. The reality is that saving $5 is saving $5, so in this case, applying the absolute difference, instead of the ratio is probably the better logic to apply in this situation.
This article https://neurosciencenews.com/decision-making-theory-20775/?unapproved=56182&moderation-hash=cdd83365bf06af8a4bd069761d674194#comment-56182 New Theory of Decision-Making Seeks to Explain Why Humans Don’t Make Optimal Choices offers some interesting insight into this theory.
The underlying takeaway here should be that we are fallible and sometimes some coaching on our decision-making would help us all. Dr. Mahmoudi’s economic theory seems to apply to several different economic situations and having the reminder that we should think about ratios and absolutes and assess which is best for a given situation is a helpful insight. Sometimes people face a different problem – too many choices. You might be standing in line at a juice bar and see that you have 50 options (which might be stressful in a line where you are expected to place an order in a minute) or you might get a list of things from a doctor or a diet plan about the 10, 20, or 30 things you need to work on to achieve a specific goal.
What many of us really need is a coach to help us make our best one, two or three choices, or items clear and simple. Instead of 50 or 30 items to prioritize, it would be so much easier if someone we trusted gave us a list of the most important thing for today, plus a couple more, so it’s less about making a choice than just doing the one thing that’s most important for you, for your goal, today. Presenting people with that best item to work on, that’s exactly what we do at One Item, or more specifically the various modules of our platform. While coach is a great and applicable word, many people are familiar with the compass Captain Jack Sparrow (Pirates of the Caribbean) carries – the compass doesn’t point North like most compasses. Instead, this magical compass points in the direction of where the one thing the person holding the compass wants most – incredibly personalized. That’s really what we do – once you have picked the part of your life you want to improve, you go through a simple list of things we have derived in working with a global expert, whether it’s a heart condition, living a longer life, or something else, indicating how important it is and how you are doing on it today. For each of our modules, that can result in over 1,000 unique combinations of responses, captured for each user and from there we apply a patent-pending algorithm, every day, to determine what is the one item that is most important for you to do today toward achieving that goal.
Again – no one is perfect. Thanks to Dr. Mahmoudi for this insightful research on the ratio difference theory in reminding us that we need all the help we can get.