Answer to Question #188217 in Microeconomics for theraja

Question

'Attempting to learn how to make decisions is an exercise in futility. All the most important decisions are made by people with little time and even less information , acting on instinct' Discuss.

Answer 1

Solution:

The ability to make correct, accurate, and vital decisions is one of the toughest things for most people to undertake. Most people tend to think that spending more time analyzing and gathering various facts about making a correct decision is the right way to go, but actually, it is not. In fact, the problem is that the more time you take and the more choices you have can lead to information overload. It makes greater demands on your information processing skills, and the entire process can be time-consuming, confusing, and at worst can result in paralysis. You will spend too much time weighing up the alternatives that you end up actually doing nothing. Furthermore, more choices also increase the chances of you making mistakes, since you may feel dissatisfied with your choice because of a niggling fear that you may have missed a better opportunity.

 

Therefore, having a natural ability to decide what to do or how to act without much thinking and taking too much time is an effective way to make important decisions. It will save you from having information overload and making accurate and appropriate decisions based on pure instinct.