3 strange but real factors that might be impacting how you make decisions
You’re usually not your best self when you’re hungry, drunk or tired. That’s why when you’re faced with a decision like whether to pull the trigger on that late-night email, it’s rarely a bad idea to sleep on it.
But not all of the factors that weigh on our decision making are as intuitive as needing a snack. If it’s your job to take calculated risks, for example, you’re probably not paying much attention to whether or not it’s sunny out.
Luminance, the amount of sun that hitting the earth’s surface, influences our willingness to tolerate ambiguity and risk, and not in a good way. Essentially, when it’s bright out, we’re less likely to make a bet — whether our odds of success are 1% or 25%.
The fact that you’re better off weighing pros and cons in a thunderstorm than when it’s sunny out is only one of the strange factors that affects our ability to make smart decisions about our money, relationships and careers. Here are three other factors that may be subconsciously weighing on your mind during everyday decisions.
1. What floor of a building you’re on
If you’re feeling particularly bold today, it might have to do with your elevation: A recent paper in the Society for Consumer Psychology found that hedge fund managers who were housed in higher floors were more likely to take bigger financial risks.
The reasoning is fairly intuitive: When we’re high up in the air, we tend to feel more powerful, which makes us more likely to take bigger risks. It’s not just financial risks, either. The authors think doctors, lawyers and other experts may be susceptible to the effect as well.
So does that mean you should only hire advisors with ground floor offices? Not necessarily: Simply being aware of this effect seems to mute it, the authors reported. But if you’re thinking of buying bitcoin from the top of your office building, it maybe worth taking a lunch break before you hit the buy button and seeing if you still feel that way after mulling it over closer to sea level.
2. How full your bladder is
One of the main reasons it’s so hard to save money, even when we have cash to spare, is the phenomenon known as temporal discounting. Basically, the brain is wired to prioritize shorter term rewards over longer term ones, even when we’re better off waiting. It’s why we go for the stale doughnuts even if fresh ones are on their way, but also why we make impulse purchases.
Incidentally, having to pee weakens the effect of temporal discounting, according to one 2011 paper. In that paper, the authors put two sets of subjects through a classic temporal discounting evaluation by asking them if they’d rather have $16 tomorrow or $30 in a week.
Groups that had taken a “water taste test” first were more likely to go for the $30, suggesting they were more willing to sacrifice short-term gratification in the name of a better reward. In this case, the reason has to do with the aptly named “spillover effect,” where our impulse to suppress one urge spills over, and leads us to suppress other urges as well.
3. How lonely you are
If you’ve recently found yourself unsuccessfully scrolling through Tinder, you may want to stay away from the slots. That’s according to one 2016 study in Psychological Science, which found that people with fewer romantic prospects made riskier investments.
In that study, the authors took about 100 heterosexual subjects and showed them images of men and women and were told they lived in the local community.
Then they gave them a choice: Would you rather have one lottery ticket for a chance to win $10,000 or ten lottery tickets, each for a chance to win $1,000. Those who were shown an unfavorable sex ratio — i.e., heterosexual men who were shown more images of men — were more likely to go for the $10,000. Notably, the authors found an effect even after controlling for factors like investing experience or relationship status.
That suggests that when our sense of sexual competition is heightened, we’re more likely to be swayed by the bigger prize than we are by the smarter bet.
What to actually keep in mind before you make a decision
While there’s not much we can do about the number of prospective mates in the immediate vicinity or how sunny it’s going to be when you rebalance your 401(k), research suggests that there are a number of ways to encourage our brains to think in the long term, or make more careful and deliberate decisions. Mindfulness mediation, for example, has been found to promote better decision making in some studies.
And if you find yourself in the unenviable position of having to make a big decision with an empty bladder, atop a tall building, surrounded by people you aren’t attracted to? Try taking a walk first, particularly if it’s outside. Neuroscientists believe this is one of the best, simple ways to clear your head and focus on what really matters.
Sign up for the Payoff — your weekly crash course on how to live your best financial life.