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Financial stress and decision-making have more in common than you think

Financial stress and decision-making have more in common than you think | Decision Intelligence News | Scoop.it

"But the challenge of making good decisions gets even worse when we are stressed. A very informative study on this topic was carried out in India. In that study, researchers looked at farmers, who harvest sugar cane. Sugar cane is a seasonal crop, and these farmers generally have low and unsteady incomes. They make their money during harvest season, when they can sell the sugar cane. But, six weeks before the harvest, they are invariably broke. In this particular study, the researchers administered an IQ test to a sample of farmers six weeks before their harvest, and then again just after the harvest... the findings of that study suggest that the farmers had about one-third lower IQ scores when they were under financial distress before the harvest, compared to after the harvest.

 

The term for this phenomenon is called 'scarcity mindset'."

Decision Intelligence's insight:

An interesting article about how stressful situations decrease the ability to make rational decisions.  I think we all knew this a bit already, but it's good to see it validated.  I think that stress arises when we hit a "complexity ceiling": when the situation and data that impinges on us is too much to understand.  DI addresses this stress directly. by providing a structured way to work through decisions in complex environments through formal processes that walk you through the decision in a structured way that helps you focus on the outcomes you want, see your available actions, and understand how your actions lead to your outcomes. 

BurtPeterson's comment, July 25, 2022 6:17 AM
nice
vps's comment, July 30, 2022 9:52 AM
good
intergirisi's comment, February 26, 2023 3:04 PM
vaovv, interbahis https://footbeauvechain.com
Decision Intelligence News
Decision Intelligence (DI) is the discipline concerned with how organizations and individuals design, support, and improve decision making at scale. It connects actions to outcomes in context by integrating human judgment, data, models, text, and AI into coherent decision systems. Decision Intelligence News curates developments across DI and related fields, including AI, machine learning, governance, enterprise architecture, orchestration, measurement, and decision modeling. Learn more at www.opendi.org and www.learn-di.com.
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