Why and when people make less than the best decisions

 

The dangers of decision fatigue

(Economist) “Have a break” is a slogan associated with the popular chocolate snack, KitKat. But it may be pretty good advice for any manager or worker, minus the calories. The longer the shift, the less effective the employee may become. In a new paper for Royal Society Open Finance, “Quantifying the cost of decision fatigue: suboptimal risk decisions in finance”, Tobias Baer and Simone Schnall examine the credit decisions of loan officers at a leading bank over the course of their working day. The academics write that decision fatigue “typically involves a tendency to revert to the ‘default’ option, namely whatever choice involves relatively little mental effort”. In other words, as you become tired, you get mentally lazy.
     The study authors calculated that decision fatigue, by causing more [loan restructuring] rejections, actually cost the bank around $500,000 over the course of a single month. Similar patterns have been seen in other situations. A much-cited study of Israeli judges found they were less likely to grant parole as lunch approached, but became more lenient once their stomachs were full again. Other research found that doctors grew steadily more likely to prescribe antibiotics, even when these might not be necessary, over the course of their shift. Mental activity can result in physical exhaustion, as anyone who has spent a day in successive meetings can attest. Breaks can also boost creativity. It is easy for the brain to develop tunnel vision when it is working hard. There are times when the mind needs to roam free. Kevin Cashman of Korn Ferry, a consultancy, and author of a book, “The Pause Principle”, reports that executives say their best ideas often come when exercising, taking a shower or commuting.