How do you make good decisions? – with Give Yourself a Nudge author Dr Ralph L. Keeney

How do you make good decisions? – with Give Yourself a Nudge author Dr Ralph L. Keeney

by Suswati Basu
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I’ve been procrastinating tackling the subject ‘making decisions’ ironically, so it was only natural we made it here. I would always make excuses saying “it’s not my turn to decide what to watch”, or “I don’t sweat about the small stuff”, just so I could avoid being seen as the bad guy or just procrastinating into oblivion.

So how can we be decisive?

Thanks to the following guest for participating:

Dr. Ralph L. Keeney, Research Professor Emeritus at the Fuqua School of Business, Duke University, and Professor Emeritus of Industrial and Systems Engineering, University of Southern California, and author of Give Yourself a Nudge: Helping Smart People Make Smarter Personal and Business Decisions.

Here are some of the resources from the show:

Bestselling author and behavioural economics professor Dan Ariely delves into the essence of human motivation:

Chip Heath, Thrive Foundation for Youth Professor of Organizational Behavior, Stanford Graduate School of Business, speaks at the Rotman Decision Making Experts Speaker Series:

Books looked at this week:

Dr. Ralph L. Keeney: Give Yourself a Nudge: Helping Smart People Make Smarter Personal and Business Decisions

Dr Dan Ariely: Predictably Irrational: The Hidden Forces That Shape Our Decisions

Chip and Dan Heath: Decisive: How to Make Better Decisions

PS. I do not receive commission for reviewing books and talks.


Exploring how we can master ourselves by looking at how experts say it is possible with your host Suswati Basu.

Intro music

Welcome to episode 20 of How To Be…with me Suswati as your timid presenter, guiding you through life’s tricky skills by taking this learning journey with you.

I’m not sure about you but my god I’m indecisive. I would always make excuses saying “it’s not my turn to decide what to watch”, or “I don’t sweat about the small stuff”, just so I could avoid being seen as the bad guy or just procrastinating to oblivion. So it is only natural that we look at decision making finally.

So how can we be decisive?

This week, I talked to one of the masters of decision making. Professor Ralph L. Keeney received a Ph. D. from the Massachusetts Institute of Technology. He is Research Professor Emeritus at the Fuqua School of Business, Duke University, and Professor Emeritus of Industrial and Systems Engineering, University of Southern California.

He was also the co-author of one of the seminal books on decision-making called Smart Choices: A Practical Guide to Making Better Decisions in 1998. And now with his new book Give Yourself a Nudge: Helping Smart People Make Smarter Personal and Business Decisions, Professor Keeney has kindly spoken to me this week about how to make decisions effectively using nudges. Here is earlier this week, and find the full interview on


Professor Keeney says most things happen beyond your control so the only way that you can improve your life or anything else that you care about is to make better decisions.

Hence a nudge is a presentation of the available alternatives or choices to the person making the decision, designed to improve the chances that they select the alternative that best achieves their interests. This essentially improves and clarifies an aspect of your decision that nudges you to make a better choice which is more consistent with your values and interests. By doing this, it can apparently help contribute significantly to the quality of your life.

Knowing your values for a decision strongly nudges you to choose an alternative more consistent with your interests.

Using this method, it can reportedly remove two serious flaws in the decision process. One, it provides actual choices in the process that you can get behind, and two it can help create a decision opportunity and not a problem to just solve so you go back to the status quo. The good news is that apparently learning to be more proactive about decision-making can be learned through regular practice.

It starts with:

Defining the decision that you want to face, so you have to figure out what you want to achieve by facing this decision;

Clarifying why you care about a decision by identifying your values, which are the basis for describing what you want to achieve by addressing it;

Creating innovative alternatives better than those that initially come to mind, as long as it achieves your values and objective.

Identifying your own decisions—meaning decision opportunities—to raise your quality of life above where it currently is. So this requires recognising something, tangible or intangible, that you would like to occur then defining your decision as how to make it happen.

Obtaining the authorization of others, when they control whether alternatives that you desire can be implemented;

And providing a consistent guide for all of your decisions by describing how to identify, organize, and use your strategic life values.

Professor Keeney also says only in rare circumstances should you choose the first alternative that comes to mind before you have identified at least a few good alternatives. And that your decision shouldn’t be stated as an objective, so no an objective such as “enjoying my holiday” but as a decision “decide where to go on holiday”.

Flexibility provides you with options to adapt an alternative if circumstances relevant to the decision change or if the consequences appear to be less desirable than expected.

In negotiations with other parties, he says it is important to thoroughly understand their values. Knowing their values, you can create an alternative or choices that provides what you desire and also is beneficial and acceptable to them.

A fellow Duke University professor wrote the our next book, Predictably Irrational: The Hidden Forces That Shape Our Decisions. Dr Dan Ariely, professor of psychology and behavioral economics explains the fundamental irrational ways we behave everyday. The book targets anyone who wants to learn how to counter their innate irrationality and make better decisions and decision-making behaviour in general. Here is Dr Ariely at a TED Talk in 2012.


Dr Ariely says our minds are fundamentally wired to look for comparisons. What’s more, we tend to do this in the laziest way possible: by using the easiest comparisons around.

Though comparing helps us make decisions, he says it can also make us miserable. Constantly comparing your salary, clothes or car to others’ will leave you envious and in a state of perpetual displeasure with what you have.

He also suggests when we’re offered something for free, our rational thinking goes out the window. Free is not just a price, but a powerful, almost irresistible emotional trigger.

Why this irrationality? Basically, whenever we pay for an item, we take a risk: if the item is not worth the price, we lose money. And humans really hate losing things. Hence, when an item has no potential downside (it’s free), we perceive it as far more valuable than it really is. This is known as the zero price effect. Thus making irrational decisions.

Dr Ariely says the way in which we decide what we’re willing to pay for products is far more irrational than most of us realize. Research has indicated that, instead of making a rational analysis of supply and demand, we in fact tend to rely on a phenomenon called arbitrary coherence: we expect prices to be coherent, so we take whatever price is first quoted to us, no matter how arbitrarily derived, and use it as an anchor to determine a reasonable price in our future purchases.

Apparently we also overvalue what we own. when we own something, we fall in love with it. We think warmly of all the things we have done with it or could do with it, so we value it more highly.

The second reason is that people disproportionately focus on what they are losing. Finally, we expect people to appreciate the same things as we do. Interestingly, this same effect applies to opinions too. If you have invested a lot of time and effort into advocating an opinion, you become stubborn because you feel more strongly that you “own” the opinion, and refuse to part with it.

Our expectations and previous experiences radically influence how we perceive things. For example, if we know a movie has received great reviews, we will tend to enjoy it more than otherwise.

Expectations can also affect us in more subtle ways: if certain stereotypes are evoked in our mind, we start to emulate the behavior we would expect from the stereotype.

People’s responses to your requests also depend on whether they fall under social or market norms. Social norms dictate how we deal with friendly requests and favors, where immediate repayment of the favor is not expected.

Market norms, on the other hand, are more cold and calculating: resources are exchanged; work is performed for a salary. Of these two set of norms, it is entirely possible to inadvertently invoke the wrong ones in the wrong situation. Dr Ariely says in general, market norms tend to make people more selfish.

In terms of decision making, studies apparently have shown that people keep their options open even if this hurts them in the long run: in our education, our careers and our choice of romantic partner.

Some might say that in an uncertain world, it makes sense to leave open as many avenues as possible, but studies have actually shown that this tendency is so powerful it can even be harmful.

Not making a decision also carries consequences. A person indecisive between two career paths, say architecture and IT engineering, may not wholeheartedly pursue either, hence end up a mediocre architect or programmer.

Sometimes closing options is beneficial, because it forces us to focus. Rather than kidding ourselves that we can keep all options open indefinitely, we need to make difficult choices about what is truly important to us.

And to make it a hattrick, our third book is also from Senior fellow at Duke University Dan Heath and brother Chip Heath, professor in the graduate school of business at Stanford University. Decisive: How to Make Better Decisions identifies the main issues that typically stand in the way of decision making. Here is Chip Heath speaking at the Rotman School of Management Speaker series.


In Decisive, the Heath brothers explain how in many situations our decision-making isn’t ideal: we think too narrowly; we’re biased by previous choices, personal values and short-term emotions; and we’re overconfident about our decisions.

They say we often think of our decisions as involving a choice between two options. Indeed, we get stuck much of the time trying to settle on whether or not to do a particular thing. But by thinking about decisions as a simple, binary choice, we usually fail to consider other alternatives. 

The Heaths say not to pursue one idea when solving a problem, but multitracking many options to find the best solution. Trying out just a couple more options apparently can yield much better results and it can improve the decision-making process dramatically.

One reason for this is that by having more alternatives, you’re less invested in any single one, and therefore allow yourself to be more flexible in your opinion.

Another is that, when weighing multiple options, you always have a Plan B at hand. If Plan A fails, you have a fallback candidate. However, you should beware of choice overload, as too many options may paralyze your decision-making so limit it down to one or two extra options.

When you find yourself wondering how to proceed with a certain problem, you should explore what other people are doing because your problem may have been already been solved by someone else. This also goes for people in similar situations as you can see how they fared.

They also suggest to play devil’s advocate and try build a case against your decision to shake off any bias. First, make it easy for someone to disagree with you. Consider what would have to be true to make your least favorite option, or just the other options, the best choice.

By doing this, you’re not arguing for or against personal preferences, but instead analyzing the logical constraints of the options and allowing for disagreement without generating antagonism.

Second, ask disconfirming questions to surface opposing information.

They also recommend something called ooching which is the process of testing ideas on a small scale. It’s essentially a small experiment to see if it could work.

It’s also important to shift our brains to think about long term consequences rather than in the moment. The way to do this is to first find emotional distance by imagining the outcomes from a future perspective.

This is because present emotions are often very clear and precise, while future emotions are not yet well-defined. One simple, effective method to equalize their influence is called 10/10/10: Actively consider future emotions by asking yourself how you would feel about your decision 10 minutes, 10 months, and 10 years from now.

The second technique is to take the observer’s perspective. By looking at your decision from an observer’s perspective – from a distance –  the most important aspects will seem obvious to you. So ask yourself what would I recommend my best friend should do?

And sometimes our decisions aren’t distracted by short-term emotions, but by an unclear order of priorities in our lives. The solution here is to find your core priorities. They say to ask yourself: “Which long-term emotional values, goals or aspirations are most important to me?”

Once you’ve found your core priorities, you must commit yourself to acting on them. We only have a limited time in our lives, so spending more time on core priorities cannot be achieved without limiting the time we spend on other things.

Another thing is when we do a certain thing every day we often don’t notice the gradual changes that, over time, can amount to a drastic situation. Hence, we need a figurative “tripwire”: a signal that makes us aware of our behavior, and, if necessary, prompts us to correct it.

And another method is to set deadlines and partitions to keep yourself from falling into bad habits. Deadlines help us enforce a decision that we’d otherwise procrastinate on.

So to sum up:

Professor Keeney says in Give Yourself A Nudge, by understanding your values you can take control of the decision making process. Hence first of all, you need to know your values by exploring these through a wish list. Your feelings and emotions are important to incorporate in your decisions. Understanding these can often guide you to identifying relevant values. Then state these as an objective.

In every decision you make, there is the opportunity to learn something specific that is relevant to similar decisions in the future and something general that is relevant to your decision-making process. Practice using these concepts and techniques on familiar, less important decisions by yourself, with others, or as an advisor to others.

In Predictably Irrational, Dr Airely says we humans are deeply irrational in most of the daily decisions we make. From deciding what price to pay for a television to struggling to eat healthier foods, our choices and behavior are guided by irrationality. But the good news is that we need not be helpless victims: through vigilance and caution we can try to avoid irrationality and act in our best, long-term interests.

In the Heath brothers book Decisive, they say when you make a decision, follow the WRAP-process: Widen your Options, Reality-test your assumptions, Attain distance before deciding, and Prepare to be wrong.

So if you are wondering whether you should go to a party or not, come up with at least two alternatives, e.g., not go to the party and watch a movie, or go to bed early and go running the next morning. This way you can estimate more truthfully what other options you have. 

I’ve started being more mindful of making decisions after reading Professor Keeney’s book. For one, I’m not running away from them like usual. What about you, how will you decide? If you enjoyed this please hit subscribe.

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