Decision-Making Fatigue, Scarcity and Development

Every morning, Barack Obama chooses between a gray and a blue suit, nothing more. Prisoners who get an early morning parole hearing are more likely to be freed than those that appear just before lunch or late in the day.  Decision fatigue is pretty intuitive. You make a lot of decisions and it tires you out, erodes your judgment. Basically, your willpower is like a muscle and it gets tired.

In his new book Scarcity: Why Having Too Little Means So Much, Harvard Behavioral Economist Sendhil Mullainathan explores how the extreme focus on a scarce resource causes us to neglect a lot of important things. When you are on a deadline, you are able to work a lot quicker. When you are hungry, that is all you can think about. This is probably a good evolutionary development. After all, if you are starving, it is better not to forget it. But Mullainathan, who recently spoke to CGD, says that it causes us to focus on what is urgent, not what is important.

So what the hell does this have to do with development? Mullainathan refers to our willpower as bandwidth and he emphasizes that we all have a limited amount of bandwidth. Our problem is that in designing programs, we don’t treat it like a scarce resource (can you tell he’s an economist?). In a paper he wrote with CGD in 2012, he uses as an example a conditional cash transfer program that requires people to attend a meeting each week in addition to the training sessions. But rather than see it as a valid requirement, he says we need to think about the cost/benefit of these requirements. Because according to the bandwidth theory, that person attends that meeting to the detriment of something else. Maybe that means he is spending less time with his children, or in planning his harvest. Whatever it is, it needs to be understood that these decisions don’t occur in a vacuum.

He also uses his theory to understand a conundrum that has come up in studies about fertilizer use in Kenya. Farmers know that fertilizer is good. Nearly 100% of farmers tell researchers after their harvest that they plan on using fertilizer the following year. It is sold in amounts that the farmers can afford. Basically, fertilizer is available, understood and affordable but it is still not used. Economics and their rational choice models have trouble explaining this. But that is why economists and their models fail to explain a lot of things that are we understand intuitively. Poor people, believe it or not, are similar to rich people in a lot of respects. They procrastinate and they lack self-control. Tomorrow I will start a diet. And tomorrow I will also mow the lawn. Farmers buying fertilizer react much the same way. Tomorrow becomes today and they need to plant. They focus on the urgent, not the important.

Mullainathan’s suggestion is that we need to think about it.

Other studies have shown that poor farmers awaiting their harvests, short of food and stretching what little cash they have until the crops come in, experience about 3/4 of that effect. “So it’s as if the poor are pulling an all-nighter every day. This is a huge effect,“ Sendhil explains.

Obviously we have no problem thinking about scarce resources. We just need to consider that cognitive decision making is also a scarce resource. Simply considering that there is a cost is a huge improvement, he says. And I agree.

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