How do we decide?

Students will meet with a behavioural expert such as the school guidance counsellor to learn about decision-making strategies. They will discuss the factors that influence our choices, and find out what kind of a decision-maker they are using the Decision-Making Strategies worksheet (see resources).

Students will then watch a video lecture by Yossi Yassour, Passive and Active Decisions, which looks at the differences between the way in which decisions should be made, and the way that they actually are. Professor Yassour makes us reconsider the question: do we really make our own decisions?

Students will then interview each other about decision-making experiences in the format of 'speed dating'. Students should sit in two circles - one inner and one outer. Every 2 minutes the outer circle moves one chair to the right, and students ask the person sitting across from them one question (see resources for list of questions).

Next, students will investigate why we make irrational decisions. They will begin by playing the Ultimatum Game (see Resources for videos to show students how to play). Students play in pre-determined pairs: 

• Player A offers a way to divide $100 between the two players - they can choose any way they want (50-50, 100-0, etc.).
• They send the offer to Player B in a private chat message.  Now, Player B has to choose either to accept the offer, or to decline in which case neither player gets any money (there is no negotiation). Player A has one option in his/her choice of an offer, and Player B has one option in his/her choice of answer, which is either 'Yes' or 'No'.
• After the game, select a number of pairs: ask Player A what they offered, and Player B if they agreed, to get a general picture of what is happening in the group.
• Discuss the 'rational' option for each player to maximise their profit. Player A will maximise their profits if they offer to take the $100 for themselves and leave nothing to player B, but player B has no reason to agree to such an offer. However, if player A offers a division of 1-99, player B is faced with a choice: to earn one dollar, or not earn anything. In this case, it is better to earn a dollar than not to earn anything, so it is better for player B to accept the offer. Therefore, the most 'rational' offer is 1-99. Did any of the students make this offer?
• Discuss the problems with this rationale, what factors it fails to take into account (e.g. spite, fairness, the notion of value, predicting others motivations). Professor Israel Oman (winner of the Nobel Prize in Economics) used to say that even behind behaviour that is perceived as irrational, there are ultimately very rational 'rules'. This is a good example of that. In this case, the underlying rational rule is 'don’t be a sucker' - it may be funny but it's an important rule of life not to be someone easily taken advantage of. There are social notions of value as well as monetary ones.

Students will play the Prisoner's Dilemma. Explain that they have committed a crime together with a partner. The police suspect both of them, but do not have enough evidence for a conviction. They are separated into two different rooms, and each offered a deal: if you incriminate your partner, you will receive a more lenient sentence.

• If A and B each betray the other, each of them serves 2 years in prison.
• If A betrays B but B remains silent, A will be set free and B will serve 3 years in prison, and vice versa.
• If A and B both remain silent, both of them will serve only 1 year in prison.

• Put students into pairs and ask students to privately disclose whether they choose to be silent or talk in the Prisoner's Dilemma model. Once they have all answered, go through the results with the students to see who will go to jail and for how long!
• Watch the Prisoner's Dilemma video, which explains the probability of a favourable or unfavourable outcome dependent on cooperation and knowing how the other party will behave. If each party does not know what the other party will choose, they cannot coordinate with each other beforehand. This model relies on 'rational' i.e. selfish, behaviour.

Discuss playing a single round compared to several rounds - how can you get out of this situation in the best way possible, ensuring you end up with the shorter sentence? After several rounds, even though Party A and Party B do not communicate, they begin to cooperate and work in a way that is mutually beneficial. In short, they start to feel that they can trust each other. They give up the hope of getting the ideal reward, and compromise on a 'good enough' solution to avoid the risk of the worst outcome. Read more: Robert Axelrod's Prisoner's Dilemma Tournament

Optional reading a scientific article, Decision-Making in Teens, which interrogates the stereotype of whether teenagers really make bad decisions.