Why people buy the wrong house

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Earlier this year researchers from the Radboud University in Nijmegen published a paper that explored why people make wrong decisions when choices are complex, for example when buying a house or choosing a vacation. According to the authors, we over-think things. For instance, when we buy a house, we might attach a higher weight to a large room (“grandmother can sleep there when she stays over”) than to a long commute. The longer we think about this, the more scenarios we think up of what we might use the room for, adding more weight to that choice.

But the real-life importance of the room does not increase with all the uses we can imagine—it’s still going to be used a few days on average each year—whereas the long commute will become a royal drag after a while.

Another problem of over-thinking is that it tends to exaggerate framing effects. Framing is what you do when you look at choices from a certain angle. The choice for a large house can be viewed in terms of space, but also in terms of energy costs. It turns out that different frames lead to different choices, and that more framing leads to wrong choices.

The scientists suggest that if you want to make a complex decision, you still weigh all the factors, but then sleep on it for a while, until the decision just—poof—pops into your head.

(Via The Frontal Cortex. Photo by Doratagold, distributed under a Creative Commons Attribution-Share Alike 2.0 Generic license)

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