A Choice Apart: With Guests Max Bazerman & Vivienne Wagner

April 27, 2020
Making a decision in isolation—versus in a comparison—relies on different processes and tends to produce different results.

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After you listen

One of the most fundamental decisions that investors make is choosing between different account types.

One of the most fundamental decisions that investors make is choosing between different account types.

Have you ever purchased a car or a motorcycle or a boat, based on some particular quality it had that made you fall in love? Maybe it was candy apple red. Maybe it had sleek lines. Maybe the engine made a pleasing purr. Hopefully that decision was a happy one. But what happens when the red sports car spends most of its time in the shop? Or the sleek motorbike is hard on your back? Or the purring boat engine is a gas-guzzler?

In this episode of Choiceology with Katy Milkman, we look at how our preferences tend to shift when we evaluate a choice on its own versus side-by-side with other possible options.

The episode begins with Vivienne Wagner and her family's decision to adopt an adorable puppy after seeing a popular movie that featured the breed. (You know, the spotty dogs—over a hundred of them.) It's a cautionary tale about a lovable but incredibly difficult pooch named Barkley and the perils of selecting a family pet in a vacuum.

Max Bazerman is an authority on the phenomenon of shifting preferences when decisions are made separately or jointly. He joins Katy to discuss the ways in which our evaluation tendencies can impact activities ranging from hiring an employee to communicating with a spouse. He also discusses strategies to be more deliberative while making important decisions.

Max Bazerman is the Jesse Isidor Straus Professor of Business at the Harvard Business School and the Harvard Kennedy School and the author of many books, including, most recently, The Power of Experiments: Decision-Making in a Data-Driven World with Mike Luca.

Choiceology is an original podcast from Charles Schwab.

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