Rational, analytical thinking is often seen as the gold standard when it comes to decision-making. Yet according to Professor Baba Shiv, cool, level-headed intellect isn’t the only game in town. “Is a good decision based on reason?” he asks. “Or is it based on emotion?”
Shiv is the Sanwa Bank, Limited, Professor of Marketing at Stanford Graduate School of Business. Throughout his career, he’s researched how brain structures related to emotion and motivation affect the choices we make. In exploring the complex neurology that leads people to choose one course of action over another, he has uncovered insights that challenge our prevailing ideas about reason and rationality. In this episode of If/Then: Business, Leadership, Society, Shiv explores how we can use our emotions and instincts to make meaningful decisions instead of relying on our rational brains alone.
Is Rational Always Right?
Post-Enlightenment Western thought is infused with the assumption that rationality is at the core of properly functioning individuals and, by extension, properly functioning societies. “We have this embedded in our minds from childhood,” Shiv says. “If you’re making consequential decisions, be as rational as possible.” It’s an idea that Shiv traces from Aristotle to Descartes to the present, but one that “forgets that we have evolved with emotion. If emotion were irrelevant, we would have evolved very differently.”
According to Shiv, the rational brain is only responsible for about 5 to 10% of our decision-making. “Emotions… have a profound influence on our decisions and we aren’t aware of it,” he says.
Shiv demonstrated this in a study involving wine drinkers and the neural processes used to distinguish different vintages. Subjects were told that they would be trying five different cabernet sauvignons, each identified by price. In fact, only three wines were used — two were poured twice, and each was marked with a fake price ranging from $5 to $90. As the participants tasted each wine, Shiv monitored their brain activity.
“What intrigued me was that people swore that the more expensive the wine is, the better it tastes,” Shiv says. “And the question I had was: Is this just a figment of our imagination? Or is the brain extracting more pleasure when the wine is more expensive?” That is exactly what his results found: “The area of the brain that codes for pleasure shows greater activation when the brain thinks it is tasting a higher-priced wine than when it’s tasting a lower-priced wine, even though subjects tasted the same wine.”
Making the Decision Right
In addition to helping us make decisions, emotions play a critical role in helping us commit to the choices that we make. To move forward with a decision, we need what Shiv calls “decision confidence,” the conviction that our choice is the correct one.
“If you emerge from the decision with doubts, you’re more likely to give up too early and not persist in the course of action that you adopted,” he says. “You need to emerge from the decision feeling absolutely confident. It’s not making the ‘right decision’ but making the decision right.”
Much of society, especially business, places a premium on rational thinking, but Shiv encourages us to embrace our instincts and intuitions. As this episode of If/Then explores, if we want to make better decisions, then we need to think more like an artist.
“Stanford University, officially Leland Stanford Junior University, is a private research university in Stanford, California. The campus occupies 8,180 acres, among the largest in the United States, and enrols over 17,000 students.”
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