The Psychology of Decision-Making

Mediations are difficult. They are difficult because of the emotion involved. They are difficult because of the money involved. And they are difficult because of the psychology at work among the decision-makers and the influencers.

Practitioners who understand the mental components at work are in a better position to achieve a more satisfying result for their clients.

In his book, “Thinking, Fast and Slow,” Daniel Kahneman describes the two cognitive systems at work, sometimes working together, and other times working at cross-purposes.

The first system, known as “System 1,” is the mental processing that reads emotions and handles your more automatic skills. System 1 supplies associated meanings (including stereotypes) rapidly and involuntarily.

By contrast, you use “System 2” when you’re focusing on specific details, like counting or figuring out how to complete your income tax forms. It applies effort consciously. System 2 thinking is slower, but you need it for methodical thinking processes such as formal logic.

These mental processes engage in a “division of labor” when it comes to thinking, and they constantly interact. Which system you use and how you think depends a lot on the effort you are expending. System 1 likes to jump on a straightforward answer, so if a seemingly correct solution quickly appears when you face a challenge, System 1 will default to that answer and cling to it.

With this in mind, here are some tips to leverage your opponent’s psychology and understand your own:

1. Keep It Simple. If you want to persuade people, appeal to their System 1 preference for simple, memorable information. Use a bold font on your exhibits, use vivid images, and try rhyming themes in your arguments. These tendencies are markers of System 1’s larger function, which is to assemble and maintain a simple view of the world.
2. But Not Too Simple. In your own thinking, however, be mindful of the mind’s inclination toward the plain, tangible and cohesive, instead of the theoretical, contradictory and vague. Keep it simple for others if you want to persuade them, but don’t get locked into simple-minded thinking yourself. Encourage your client to recognize that not every fact or every motivation has a plain and cohesive explanation.
3. Link Cause and Effect. System 1 prefers the world to be linked and meaningful, so if you are dealing with two discreet facts, your opponent’s System 1 thinking will assume they are connected. It seeks to promote cause-and-effect explanations, so be sure to provide one.
4. Fight the Urge to Make Snap Judgments. When you observe a bit of data, your System 1 presumes you’ve got the whole story. The “what you see is all there is” tendency is powerful in coloring your judgments. Don’t let your client assume that they know all there is to know about a situation.
5. Avoid Anchors. System 1 is also responsible for “anchoring,” in which you unconsciously tie your thinking on a topic to information you’ve recently encountered, even if the two have nothing to do with one another. Be wary, System 2 can magnify your mistakes by finding reasons for you to continue believing in the answers and solutions you generate.

How we process information and make logical conclusions is greatly affected by our own psychology. We cannot avoid the cognitive systems constantly at work in our decision-making processes, but we can understand them. If attorneys understand the mental components at work, they are in a better position to achieve a more satisfying result for their clients.