I re-watched Ruth Chang’s interesting talk about reframing difficult decisions yesterday morning. I agree with both her insight and suggested applications. However, it reminded me of another cause of difficult decisions: our assumption benefits are linear.
The payout of many benefits isn’t actually a smooth progression. The ratio twice the benefit gives twice the value holds for many normal situations, but at high or low (or both) ends of the spectrum the ratio can be vastly different.
Staying with Chang’s two jobs decision: imagine a job you aren’t really certain about choosing for one million pounds per year; now imagine it paid two million pounds per year. Does it actually now feel attractive? Probably not.
Or imagine a job that requires you to work 30 hours a week, divided however you like between 8am and 6pm Monday to Friday, but you have to work at least one hour each day. Now imagine instead of working at least one hour a day, you have to work at least 5 minutes every day. Does that extra 55 minutes flexibility seem valuable? Probably not.
If the choice is between having enough to meet our bills or not, a salary increase is attractive; the choice between all right and comfortable is still attractive but less so; but once making do is a distant memory, extra money becomes less and less able to buy extra pleasure.
If the choice is between having to work fixed hours and flexing around other commitments then the flexibility is attractive; the choice between a working equal hours and taking half-days on Fridays is still attractive; but once you get significantly below a half-day, the inconvenience of having to go into work at all becomes large enough you know you won’t take proper advantage of it.
So, not only are options potentially not directly comparable, even the addition of objectively the same benefit can have a different effect on the attractiveness of different options.
Do you have any special methods of comparing options? Do you think decisions can be reduced to a straight comparison?