Beware of tunnel vision when making important choices, prof warns

Most people wouldn’t likely see any great similarity between buying a house, speed dating and hiring an employee.

But University of Alberta business professor Gerald Häubl says that all three typically involve sequential searches that require the decision-maker to discover and explore alternatives before making a definitive choice. However, Häubl notes that these decision-makers need to be aware of biases that may hamper making the best choice.

He says decisions on things such as cars, homes or even dates are often made by viewing and comparing multiple options. Sometimes, he says, people may develop tunnel vision in the search. That leads to making a choice based on overfocus on or overreaction to a current alternative.

“A given house, camera, cellphone or restaurant can appear more or less attractive depending on where it is encountered in the search,” said Häubl. “If you see it following something much less attractive, that will boost the attractiveness of the current alternative. If you see it after something that was quite attractive, that will pull it down.”

Häubl also notes that choice-selection process also causes people to rule out other strong options that may have been seen earlier on in the search. He says this notion of “out of sight, out of mind” really works against consumers in the search process since the first-round comparisons don’t make a difference in the selection process.

“We should really have better memory for everything that we’ve looked at previously and give equal weight to the alternatives,” he said.
Though the eager job seeker or wannabe partner may now be hoping to be the last one on the list and for their predecessor to crash and burn, Häubl says it is not so much the end of the line that gets chosen; the final outcome is determined by where you are in the search pattern.

“It is advantageous to be in a position where there is an improvement, where you are better than the alternative that preceded you,” he said.

“It’s not only obvious that you’re better than that weak candidate, but also that weak candidate changes the subject’s perception of you. It elevates how attractive you’re perceived to be.”

Häubl cites an experiment he ran wherein participants were motivated by financial incentives. He notes that despite participants knowing their choices had monetary rewards, they still displayed a form of tunnel vision when making their choices.

“Even when we paid people to do well, they still didn’t do well,” he said. “They’re still biased in line with these local contrasts and focalism effects."

In order to avoid falling into the tunnel-vision trap when making decisions, he notes that consumers should be aware of these inherent biases and develop smarter search strategies. He says that among options for making better decisions, buyers should make notes of attractive options that appear early in the search so that they will have something to compare to other attractive options that they may encounter later in the search. By being aware of potential for bias during the search and eliminating comparative biases related to less-attractive options that may appear, Häubl notes that consumers can restrict comparisons to the top alternatives.

“Always evaluate the current alternative to the best one you’ve seen so far. We’re not very good at remembering that,” said Häubl. ”It’s hard for us to make global decisions, but making local decisions leads to these biases.”

Provided by University of Alberta (news : web)