Decision Making Basics

Psychological uncertainty is an uncomfortable condition that human beings try to acquiesce when experienced. The manifestations of psychological uncertainty in decision making have been explored (Neace, 2011). This paper will address the foundation of psychological uncertainty. It as a state that arises prior to the acknowledgement of loss. Loss aversion has been shown to be a basic motivation of human beings (Kahnemann and Tversky, 1979). Uncertainty then is an anticipatory response; it operates as signal anxiety. Thus, uncertainty when roused needs to be modulated. If uncertainty is moderate, an individual can employ coping mechanisms to minimize the discomfort. As one can make uncertainty manageable, one is able to return to the task. As uncertainty increases, an individual needs to use more elaborated strategies. Heuristics are used when discomfort is moderate; more intensity demands defense mechanisms for protection. Defenses create distortions. People need to distort information to be able to distract themselves from threat of loss. Until they can restore their psychological equilibrium, individuals cannot focus on the decision. With extreme uncertainty, the amount of information they must distort is considerable. While this allows an individual to feel less vulnerable, the amount of accurate information the individual has about the situation is decreased. Unfortunately as defense mechanisms are unconscious, individuals are unaware of their distortions. So unquestioning of their perceptions, an individual acts unhesitatingly on what he/she believes they know. This actually increases one’s risk. People’s first reaction to uncertainty is to decrease attention from the decision and focus on their personal sense of discomfort. Once they calm themselves, attention can be returned to the decision. But if they had to deny or distort major elements of the situation to calm themselves, they are much more prone to errors in decision making.