Much of the process of sound decision making rests on our ability to perform appropriate comparisons. Which is a better investment: Google or Yahoo? Which is safer: flying or driving? Which business school is best? Our answers to all of these questions hinge crucially on the basis we use for comparison. Which features are really salient, and which are just noise? Are we looking at a large, objective collection of evidence, or just the recent evidence we have at hand? Are we using our instincts, and predictions of the future, or looking at statistical data from the past? Are we focusing on the ways in which competing alternatives are similar, or the ways in which they differ? What is the relevant timeframe we’re analyzing? Do we care about absolute performance, or relative performance?

Our answers to each of these questions can radically change the outcome of a decision making process, for better or for worse. In his latest Mauboussin on Strategy article, Michael Mauboussin surveys the many behavioral factors that go into forming comparisons, and offers some advice for making comparisons which are appropriate to the situation.

Read more: Mauboussin on Strategy: How Do You Compare?

Previously:

• More Than You Know
• Mauboussin on Discounted Cash Flow Models
• Mauboussin on Strategy: Size Matters
• All posts tagged Michael Mauboussin

New research from the Stanford Graduate School of Business suggests that the physical location of a poll can significantly influence voter behavior. Analyzing data from Arizona’s 2000 general election, researchers found that those who had to go to a school to place their vote were significantly more likely to support a proposition to raise taxes to provide more education funding. The effect was visible even after controlling for political, demographic, and geographic factors. In follow-up laboratory studies, people were randomly shown images before being asked to vote on a mock ballot proposal. Those who were shown images of well-maintained schools were more likely to support increases in education funding, while those who were shown images of churches were more likely to vote against allowing stem cell research.

Why might something like polling location influence voting behavior? “Environmental cues, such as objects or places, can activate related constructs within individuals and influence the way they behave,” says Berger. “Voting in a school, for example, could activate the part of a person’s identity that cares about kids, or norms about taking care of the community. Similarly, voting in a church could activate norms of following church doctrine. Such effects may even occur outside an individual’s awareness.”

What is the significance of these findings?

“We want factors like political views—whether someone thinks a candidate is going to make our country a better place—to sway elections,” said [Jonah] Berger. “But in forming election policy, we also want to make sure that arbitrary factors such as polling location don’t ultimately influence voting behaviors.”

Read more: Can Polling Location Influence How Voters Vote?

Via Mahalanobis

Individual decisions can be badly thought through, and yet be successful, or exceedingly well thought through, but be unsuccessful, because the recognized possibility of failure in fact occurs. But over time, more thoughtful decision-making will lead to better overall results, and more thoughtful decision-making can be encouraged by evaluating decisions on how well they were made rather than on outcome.

– Robert Rubin, Harvard Commencement Address, 2001

Excerpted from More Than You Know, by Michael Mauboussin.