Decision making is an important part of our lives and the good news is that decision making is a skill that can be learned and improved. Usually, every decision involves a degree of uncertainty, so there is no guarantee in advance that the decision will lead to a clearly defined outcome. Thus, a good decision can also lead to a bad result and vice versa. When individuals are asked to evaluate their own or others’ decisions, they often consider the outcome resulting from the decision, and the question thus arises whether a good outcome is capable of justifying a bad decision. This post will consider why poor outcomes often lead to (unjustified) changes in behavior, what factors influence the ability to make good decisions, and why decisions should not usually be judged by their outcome.
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Since the exact outcome of a decision is usually uncertain, individuals form various expectations regarding the possible outcomes in order to deal with the uncertainty of a decision in this way. However, when the formed expectations are not met, this often leads to negative emotions. When individuals evaluate their decisions in retrospect, they are either disappointed or regret the decision they made. While disappointment usually results from external influences, regret arises when the unfulfilled expectation is attributed to the individual’s own decision. The negative emotions associated with an outcome can affect (future) behavior in a number of ways. On the one hand, they repeatedly cause individuals to delay (important) decisions – consciously or unconsciously – or even to avoid them altogether. On the other hand, disappointment can also lead to increased effort. If it is recognizable that one could have reached the expected result on one’s own and that external influences were not the reason for the undesired result, disappointment can have a motivating character.¹ Even the best decisions can lead to unintended outcomes. However, especially when decisions are repetitive, they can carry implications for behavior. Individuals are most likely to make the same decision if it has led to the desired outcome in the past. If this is not the case and the decision maker must make a similar decision again, behavior is often adjusted – regardless of whether the alternative first chosen was better. The feeling of regret is quite helpful in many domains, as individuals can learn from their mistakes in this way. In the context of decision making, however, regretting a decision can be problematic. If a good decision leads to a bad outcome, the decision may be avoided in future scenarios and a worse decision will be made. If this also leads to an undesirable outcome, decision makers may find themselves in a negative spiral as the alternatives chosen successively get worse.²
A good decision-making process alone is no guarantee for good results. Moreover, it is difficult to judge whether an outcome is good or bad since the interpretation is often subjective and thus variable. Even though good decision making is a skill that can be learned, not all people exhibit comparable decision-making competence. Parker, Bruine de Bruin & Fischhoff (2015) illustrate in their work that socio-economic status has an impact on individual decision outcomes. In particular, poor as well as young people are at a disadvantage. While in the case of financially disadvantaged individuals it is primarily their circumstances that can have a negative influence on decision outcomes, in the case of young people it is primarily their lack of experience due to their age.³ However, a distinction should always be made between a decision and an outcome. Evaluating a decision based on the outcome is merely a heuristic that is only useful in some exceptional cases. Nevertheless, this is exactly what can often be observed in practice. Especially in the case of bad decisions, individuals try to justify their behavior through the outcome. When the decision outcome is known, the perception of the information that was actually available at the time of the decision changes and decisions are evaluated incorrectly. Many individuals fall victim to this phenomenon, known as the “outcome bias.”⁴
A decision maker and an observer do not necessarily have the same information at their disposal. It is therefore hardly surprising that perspective has a significant influence in the evaluation of a decision. When evaluating decisions, it is important to avoid placing too much weight on the outcome, as external factors can cause the desired outcome not to occur, even when it is the most likely. Thus, if an undesirable outcome is produced, it may not be the fault of the acting person. For this reason, it is important to look not only at the outcome, but also at the underlying decision-making process. Good decision making can be learned and individuals are able to continuously improve their decision making skills. If negative emotions resulting from a faulty assessment of the situation cause decisions to be avoided, this can potentially undermine the learning process. Both individuals who want to improve their own decision making and those who want to help others make better decisions should keep in mind the difference between a good outcome and a good decision. The fact that the outcome of most decisions cannot be guaranteed means that there can always be a deviation from the most likely alternative. Improving decision-making skills seems possible only if the decision-making process is considered independently of the outcome achieved. Someone who tries to justify a bad decision with a good outcome will most likely continue to make bad decisions in the future and at some point – sooner rather than later – this is guaranteed to lead to a bad outcome. Conversely, no one should be easily discouraged by a bad result, but should instead analyze whether their own decision was in fact the decisive reason for such failure. It can be assumed that individuals who focus on the decision-making process and not on the outcome will improve their decision-making competence and benefit from this in the long term.
Evaluating a visible and measurable outcome is always easier than assessing the underlying decision process. Nevertheless, decision makers and observers alike should accept the extra effort in order to gain insightful knowledge. In practice, there are clearly too many scenarios in which only an outcome is assessed. With this behavior, one harms oneself and/or other decision makers. To improve one’s decision-making skills over the long term, decisions should be evaluated based on the information that was available at the time the decision was made. In retrospect, however, this can be difficult, as people often try to justify a decision with the outcome achieved. In individual situations, a bad decision may lead to a good result, but maintaining this over a longer period of time is almost impossible.
¹ Zeelenberg, M., Van Dijk, W. W., Manstead, A. S., & vanr de Pligt, J. (2000). On bad decisions and disconfirmed expectancies: The psychology of regret and disappointment. Cognition & Emotion, 14(4), 521-541.
² Ratner, R. K., & Herbst, K. C. (2005). When good decisions have bad outcomes: The impact of affect on switching behavior. Organizational Behavior and Human Decision Processes, 96(1), 23-37.
³ Parker, A. M., Bruine de Bruin, W., & Fischhoff, B. (2015). Negative decision outcomes are more common among people with lower decision-making competence: an item-level analysis of the Decision Outcome Inventory (DOI). Frontiers in psychology, Vol. 6, Article 363.
⁴ Baron, J., & Hershey, J. C. (1988). Outcome bias in decision evaluation. Journal of personality and social psychology, 54(4), 569-579.