Caption: Woman behind bars (image credit)

 

 

Entering that backyard was like going into a lush grove. Shady trees spread their branches around us and protected us from the summer’s heat. Oh, and how beautiful the leaves would get in the fall. Can you imagine the full range of colors that would emerge – red, yellow, and orange in all the kaleidoscopic ecstasy of autumn’s revel? How could this magical vision fail to deliver our heart’s desire?

 

Walking into this backyard was the single most vivid experience of the house search undertaken by myself and my wife, Agnes Vishnevkin. I imagined myself lounging in the hammock in the peaceful shade of trees, experiencing the calm of a majestic forest. Exhausted after a long, grueling day of house hunting, this yard was the clincher for me and my wife. We excitedly told our realtor to put a bid in for the house; we couldn’t wait to move in.

 

Little did we know, the backyard was a trap!

 

 

Why was it a trap? To put it into context, here’s an example of similar trap, see if you can spot it.

 

 

Doesn’t that Toyota FJ Cruiser look great going into the rugged peaks of the San Juan mountains? Yeah, it’s perfect there. Indeed, Toyota promoted it as the ideal car for that purpose. So, if you live in the mountains, it’s the car for you! The problem is that the vast majority of their customers do not live in the mountains! They generally drive in the city or on highways, and the car had serious problems with urban driving! Toyota’s marketing appealed to people who wanted to feel like they could go to the mountains, but how often did that feeling become reality?

 

Can you see the similarity between the car and the house? What would you guess?

 

Neither could deliver on the emotional promises it made! Just like taking the car on off-road trips would be an occasional experience, lounging around in that backyard would be rare. In reality, on my days off, I’m much more likely to go visit my friends or go out with my wife.

 

I was so motivated by my emotional attachment to one aspect of the house that I disregarded everything else. It was a classic thinking error, called attentional bias. This term refers to our brain’s tendency to focus on whatever things in our environment that happen to push our emotional buttons, as opposed to the things that are actually important. Such emotional traps could cost us our long-term happiness when they influence our big decisions, such as getting a new car or, especially, a new home!

 

Fortunately, Agnes and I avoided this trap. The day after we told our agent to make the offer, we decided to re-evaluate our decision by applying the tools of probabilistic thinking and multi-attribute utility theory to our purchase.

 

Below is a photo of our calculations. We compared our first-choice house, labeled 170, to our second choice, 450. To avoid excessive emotional attachment to any part of the house, we wrote out the various parts of the house (first column). We then gave each a quality rating on a scale from one to three, one being the lowest and three being the highest. Then, to account for the actual usage of each part of the house, we gave a similar rating for expected usage. Next, we multiplied the quality and usage figures to give an overall weighted rating (only the overall rating is included in the chart). We separately wrote how much we thought each part of the house was worth, and how much we would use it, marked A and G, for Agnes and Gleb. Finally, we added them all up at the bottom, as you can see from this photo of my notebook.

 

 

Both of us were really surprised by the result. Our second-choice house beat out our first-choice house, and by a lot, 95 to 67.5. For instance, we realized that besides the yard, the original first choice house had a dining room that was too small for us. Also, the living room had a poor setup for the furniture we’d be bringing with us. Our original first-choice house had much worse bathroom options, and also a much poorer space for the two of us to hang out (h. o. in the photo above). While Agnes liked the kitchen in our original first choice more, it was not a factor for me, as I don’t really engage with the kitchen much.

 

We were way off base in our initial decision-making process due to our attentional bias on the backyard and after we’d thought about it, we felt much more comfortable with our new choice. I shared my experience with others and found out that many had similar stories. We quickly called our realtor and asked her to make the bid on the second house. And we were so excited when it was finally accepted! We moved in on November 9, and haven’t looked back since.

 

We’re really happy with our new house, and I shudder to imagine what would have happened if we bought the other one. We’d have spent the long cold winter looking out the windows at the leafless, snow-covered trees in our backyard, longing for the warm weather to arrive. By contrast, this house has a lovely heated screened-in porch that we can sit in all year round, and I enjoy a view of a pine tree from my home office window.

 

Caption: Tree outside of author’s window (Courtesy of Gleb Tsipursky)

 

 

From that episode, I learned that this type of cost-benefit analysis is really valuable when making significant decisions that impact your long-term happiness. In fact, Benjamin Franklin used a similar method when making important decisions! So, how can you use this method to avoid the emotional trap of giving in to in-the-moment feelings for the sake of your long-term happiness?

 

Let’s go back to the car as an example. Before making a decision, sit down and assign numbers to various components of the car. First, consider how you plan to use the car – city driving, highway driving, road trips, driving in the mountains, driving by yourself, driving with family and friends, driving your date, and other uses. How much of your time will you use the car for each activity and how important is each activity to you? Assign a numerical value to each activity based on a combination of usage and importance. For instance, you might not be taking family road trips often, but it might be important for the car to be really well suited for those times, so give a higher number for that variable.

 

Second, based on your usage ratings, consider what aspects of the car are important to you – safety, gas mileage, comfort for the driver and passengers, trunk space, off-road capacity, coolness factor, and so on. For example, it might be important to you to impress your dates and friends with your car, so give a higher rating to the coolness factor. Or it might be very valuable to have comfort for yourself and good trunk space if you are taking long car trips. Assign a numerical value to each aspect based on your personal evaluation. Now you know what aspects are most important to you and are much less likely to be led astray by attentional bias!

 

Note that this does not mean you are trying to eliminate all emotion from your decisions. After all, your ratings are informed by how you feel about what you are evaluating. However, numerical ratings can help give those feelings proper scope in relation to other considerations, and prevent attentional bias from hijacking your decisions

 

Apply this method to any significant financial decision – buying a car, some furniture, vacation, a computer, a house. A smart time investment of less than half an hour could lead to a much happier future for you. Moreover, with a little imagination, this method can be applied to all important decisions, not only financial ones. In future posts, I will discuss how to quantify less tangible values to make wise decisions for your long-term happiness.

 

Questions to consider
• What are your strategies for making big decisions wisely?
• Has attentional bias ever led you astray when making big decisions? If so, how could you have applied the method from this article to your previous decisions in order to make better choices?
• What kind of significant financial decisions may you make soon? What kind of factors might cause attentional bias in these decisions? What specific steps can you take to avoid these problems?

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Co-Founder, President. Gleb is passionate about two things: helping people think more clearly and advancing global flourishing. These passions combined into one when he and his wife, Agnes Vishnevkin, co-founded Intentional Insights in the Winter of 2014.