How do you avoid decision fatigue? Strategies used by George Baxter, JD, CFA include limiting his decisions outside of his professional life as a hedge fund manager, thereby fighting the chances of becoming fatigued. For example, you can follow others leads in ordering food. Make use of automated strategies and use default rules to make decisions. This will help you to reduce decision fatigue. Humans make multiple decisions in a day, excessive numbers of options can also result in anticipated regret from not picking one choice over the other and can result in exhaustion. More choices can lead to the best investing outcomes...or so it would seem. Making too many decisions is not a positive strategy and can cause mental exhaustion. Listen in at Mental Models Podcast | Decision Fatigue | Strategies for Success
Chipotle's business model provides an example in parsimony. They offer few options and these can be assembled easily by the consumer. This stands in stark contrast to traditional sit-down restaurants with dozens of items on the menu. One drains your mental energy leaving you feeling exhausted and the other does not. At Chipotle, minimum options, simplify the decision making process.
Recovery Strategies from Decision Fatigue
You can spot a clear analogy to the body. We cannot run all day long. We have to pace ourselves. Our brains are also biological systems that consume fuel in the form of glucose and oxygen. We can wear ourselves out when we make too many decisions throughout the day.
Scientific studies of decision fatigue link the phenomenon to our glucose levels in our bodies. Roy Baumeister called this type of mental fatigue “ego depletion”, a nod to Sigmund Freud's "ego" concept. Studies have shown that providing someone with a sugary drink can replenish their resolve. In essence we need to provide the brain with more resources to keep functioning at an optimal level. Eating a meal or even caffeine can boost your brain, if at all possible take a nap!
Negative Side of Decision Fatigue
Research studies of parole boards indicate that people who receive a hearing earlier in the day are more likely to be paroled. After a certain point, judges just seem to lose motivation and succumb to decision fatigue.
Dr. Daniel Krawczyk once experienced decision fatigue at an office furniture show room. The repeated decisions added up to an overwhelming point. After more than an hour of choosing between color variations and with the caffeine gone from his brain. He found himself completely mentally checked out on the process.
Counter Decision Fatigue - Successful Strategies
Limit your options: In a memorable act of decisiveness – Cortez burned his boats. This gave him no option but to proceed with his mission.
Try the memory technique of chunking, supported by memory research: Forging new habits is mentally exhausting, especially when you take on multiple habits at the same time. It can be difficult to anticipate how much effort this takes. In memory research there is a magic number "4 plus or minus one". This refers to the capacity of working memory, the ability to hold a number of things in mind simultaneously. This capacity can be enhanced by chunking, which is grouping items. Chunking helps to minimize the amount of processing needed by the brain to complete a task.
Tips to Avoid Decision Fatigue
Structure your day to make your important decisions earlier in the day before you reach a depleted state.
Limit the amount of options available by narrowing down to fewer choices whenever possible. This will have the cumulative effect of limiting the sheer number of decisions you make in a day.
Limit the number of decisions you can make in one day; make those decisions during the time of day (usually in the morning) when you are feeling energized.
Dealing with the many distractions in life – email: take care of it in afternoon. Often the decisions are not as intense in the later part of the day. We often get by later in the day with less arousal and effort. Maximize your brain power for more difficult decisions early in the day. Also, disable alerts from your inbox.
Be a Cognitive Miser – We need to minimize effort at least some portion of the day. Don’t attend fully to your email if you are simply clearing out spam and set a time limit to how long you will spend on it.
Text messages – We sometimes get a little dopamine surge when we get messages – These deplete cognitive reserves over the course of the day. Like dealing with emails, texting feels good, but it is frequently not productive.
Replenish resources by eating a meal. Also, drink water, keep hydrated, exercise!
Your Brain and Body Needs SLEEP
Sleep is active restorative process for our mind. Quality sleep is strongly linked to building strong memories – the hippocampus linked to high fidelity memory building and it is very active during sleep. This will ultimately help you find the information the next day. Both the brain and the body need a rest.
Visit Mental Models Podcast for more Behavior Finance insights from Dr. Daniel Krawczyk and George Baxter, JD, CFA
Co-Author Dr. Daniel Krawczyk, Professor at the University of Texas at Dallas, Deputy Director of the Center for Brainhealth, Co-host of Mental Models Podcast, and author: Reasoning: The Neuroscience of How We Think 1st Edition and soon to be released book with George Baxter, JD, CFA "Understanding Behavioral Bia$: A Guide to Improving Financial Decision Making"
Co-Author George Baxter, JD, CFA, CEO and Hedge Fund Manager at Saber Point Capital, Dallas, TX, & author: Baxter on Magic: A Guide to Proper Playing Techniques for Magic : The Gathering, Pro Magic: The Art of Professional Deck Construction, Mastering Magic Cards: An Introduction to the Art of Masterful Deck Construction, The Tables of Magic, Magic Cards Simplified: For Player Parents and Beginners of Magic - The Gathering, Deep Magic: Advanced Strategies for Experienced Players of Magic : The Gathering
Editor: Dr. Linda M. Drew, Producer of Mental Models Podcast, Author, Research Scientist & Instructor at the University of Texas at Dallas
Take away message: Make fewer decisions throughout the day and prioritize and make decisions earlier in the day.Listen in at Mental Models Podcast | Decision Fatigue | Strategies for Success
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