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Decision-making: how your thinking process decides how you act

Yinghui Liang
11 min readSep 24, 2023


This is the first story in a series on decision-making, from psychological, economic and organisational perspectives. You may also be interested in my next story on motivational process on decision-making.

Summary: in this story, I discuss the cognitive process that decides how we act. Based on these, I ponder about how digital communities shape and reshape our schemas, how to tell misinformation (e.g. how wrong is Google?) if possible, why our emotion is aroused by posts and how digital marketing shapes our attitudes.

We make decisions every single second. From as trivial as meal choices (many will disagree) to as critical as life partners (some claim a major finance investment), we expend a good amount of mental energy just making decisions, sometimes causing decision fatigue, i.e., worsen decision-making ability after making too many decisions.

Think online shopping. You search for a pair of perfect jogging shoes for hours and end up buying the pair that you may not like the best, just to end the task of searching.

Oftentimes, we do not know why we make certain decisions. It all seems natural at the time of the event. Later, when you distance yourself and look back, you would smack on your head, yelling it all does not make any sense.

Researchers from various disciplines (psychology, economy, management, biology, neuroscience, just to name a few) reveal remarkable insights about human decision-making process. I have been surveying the landscape of the decision-making field, particularly from perspectives of psychology, economy and organisation. Thus, I hope to write a series of stories dissecting the field to the best of my understanding, interpreting and explaining theories in my own words and examples. Due to the extend of content that I wish to cover, it means that this series is not meant for complete or thorough. It serves as my literature review notes and a general discussion.

I have already felt overambitious in this attempt. Nonetheless, I would try my best to accomplish. For now, here is my plan. This first story will cover cognitive process in psychological influences on individual decision-making.

Psychological influences come in two directions: internal and external. Internally, we are subject to our own cognitive process and motivational drives. Externally, we are often swayed by other individuals, our own groups and other groups.

Overview of Psychological Influences on Individual Decision-making

Cognitive Process

Structure of cognitive influences

Cognitive process is thinking process in our head that drives our beliefs, emotion and behaviours towards the outside world. Cognitive influences on decision-making include schema, heuristics, attribution, affect and attitude.

Schema is basically our mental architecture of organising information.

This kind of structure often operates beyond consciousness and is formulated and maybe updated via our living experiences.

While you are browsing this story, you brain has quickly categorised it into some related concepts or past experiences, such as "oh I've seen these" category, thus leading to a decision to quit reading.

Schema helps our brain allocate our (limited and increasingly so) attention to things that matter to us. There are four types of schemas. Self-schema is what you think about yourself; person-schema is what you think about others; event-schema is what you think about events happening in your world; and group-schema is what you think about different groups of people, e.g. scientists, actresses or Asians. Group-schema is also known as stereotypes. Schema helps us navigate the changing world with some sort of simplified models, allowing quick decisions to be made.

Heuristics is defined as experience-based strategy to make decisions.

In other words, heuristics is a sort of mental shortcut that allows us to estimate what is happening and make an immediate action.

Think you are shopping breakfast cereal in the supermarket, where the discount tags are often red. An expensive cereal brand, not your usual choice but you fancy it, is in red tag. You quickly make a glimpse and see the price goes down from $10.99 to $9.99. You decide to get it instead of your usual $4.99 standard priced cereal.

The mental shortcut of "it is cheaper so I should get it" happens. If you take time to think about it, it is not that much cheaper. Professor Daniel Kahneman's book Thinking, Fast and Slow is a great read about heuristics.

There are three common kinds of heuristics. Availability heuristic is the mental shortcut to decisions based on what is most available in our head.

What share of the world’s population don’t have enough food to meet their daily needs? This question comes from gapminder. Test for yourself.

Your answer would depend on what information is most available in your head. You may give a high percentage if you have recently watched a documentary about poverty situation in the world.

Representativeness heuristic is the mental shortcut to decisions based on how similar something or someone matches our beliefs about the typical characteristics of them.

What if I told you that I was an alcoholic? Would you see me as a drunkhead that makes trouble? Would you still wish to read and trust the content of my stories? What if I told you that I graduated top of class with a psychology degree?

When we apply representativeness heuristic to people, it is easy to see that we are applying stereotypes. Representativeness heuristic is useful for daily mundane tasks, e.g. deciding toilet papers based on how soft it looks. However, we should always remind ourselves to not generalise people.

I love simulation heuristic, which is mental shortcut to decision based on how easily we can imagine or visualise outcomes in our head. I can now see myself using this when I plan my daily tasks. If I could not easily foresee myself completing a specific task, despite the fact that I desperately need it to be done, I often end up giving it up.

Bias can also serve as heuristics, although it typically entails a wrong impression thus leading to bad decisions. Confirmation bias is our tendency to search for evidence that support our existing beliefs, often via overemphasising supporting evidence while ignoring opposing facts. Confirmation bias is something I constantly warn myself to stay away from because it is so deep rooted in human nature. It is especially dangerous for researchers. Deep down, we all wish our research work turns out as expected, thus, exposing us to our weakest point. Base rate neglect is a bias so common that it plagues our decision-making process. Base rate refers to verifiable data about the probability of an event happening in our world. However, we often make decisions neglecting such data, even if it is given to us.

One of the typical base rate neglect example is lottery optimism. Your friend Katy won $2000 last month with lottery ticket bought at the store down Lucky Street and then your friend Gary won $500 with ticket bought at the same store. You decide to buy a ticket at that store, figuring that chances of winning are higher there, neglecting the fact that the chance of winning a lottery is miniscule.

Attribution is the explanation that we produce to make sense of our own and others' decisions.

As humans, we always try to provide explanation to anything. It is in our gene. If something is unexplainable, it is dangerous and could cost our survival. My favourite writer Yuval Noah Harari depicts this point brilliantly in his book Sapien. Attribution comes only natural to us.

Think about a bad day. In the morning, you check out weather forecast - sunny, but there is a downpour in the afternoon. You have no umbrella. You stuck in traffic, making you very late for an important interview. You didn't get the offer. You have to stuck at this job. You friend cancels dinner. You have no food at home.

All these miseries could be just bad luck but we always try to attribute such bad luck to some reasons: should have brought umbrella no matter what. Should not have taken taxi. Should have prepared better for the interview. blah blah. Without causes, our brain cannot settle. We make an internal attribution when we suppose that decision is made due to an individual's characteristic, such as their personality and mood; whereas an external attribution happens when we suppose that decision is made due to situations. Doesn't this sound familiar.

John is promoted to director position in the third year after he joined this big company. He couldn't be more proud of his achievement and attributes his success to his hard work, excellent client service and great communication skills. He works very hard to get clients' requests fulfilled even at the expense of being complained by internal departments of being too pushy. John thinks he deserves the promotion more than anyone. What John does not acknowledge is that the company has assigned him a portfolio of stable clients based on his background and the three years while he is with the company, the overall economy is good so clients are willing to spend. Even internal departments complain about his work styles all the time, they still get all his extra requests done.

We tend to overestimate internal factors and underestimate external situations. This fundamental attribution error is prevalent.

Affect is our feeling and emotion.

Emotion is what clearly distinguish human from artificial intelligence. At least for now, I do not believe inorganic machines could possess emotion, though machines (or algorithms) certainly operates on a high level of intelligence.

Emotions are evolutionary products. LeDoux (2000) argues that our brains tend to allocate more attention to negative feelings such as fear, which often indicates a threat to survival. This makes perfect sense. Don't feel bad if you are a pessimist. It only means that your brain is more alert to survival.

Not surprisingly, our mood is a key influencer on how we decide. The mood-as-information approach basically says that our current mood is our primary source of information on how we should act right now.

Should I buy this dress? This question often subconsciously works as 'How I feel about this dress? "

This is probably why researchers now use sentiment analysis to understand consumers' buying intention. You feel positive about a certain product, you are more likely to purchase it and vice versa.

You could make a bad decision in a bad mood, yet you could certainly make a very bad decision in a good mood. What I am trying to say is that we need to be vigilant about the fact that our moods direct our attention. Negative moods tend to narrow our attention to the tiny little details of an issue, while positive moods tend to make us see an overall picture of what is happening. Emotions are vital for survival but they could be harmful when we allow our emotions to be the master of ourself. Emotions are hard to manage but not unmanageable. It requires our constant self-awareness and self-interrogation. All could be practiced via meditation.

Attitude is our generalised and long-lasting evaluation of the outside world.

We have attitudes toward every single person and objects in the world. Social psychologists use ABC model — Affect, Behaviour, Cognition, to explain attitude. We evaluate the world based on how we feel about it (affect), what we know about it (cognition), and how we dealt with it in the past (behaviour). Once we form an attitude, it is not easy to change but can be changed with enough time and new information. Research has demonstrated that strong attitudes towards a person or object, predict our decisions towards them.

Strong attitudes are often cultivated from our own direct experiences. We internalise these experiences and could retrieve them quickly from our brain when necessary. When events match our existing attitudes, they are reinforced and thus, become a persistent belief in us. Understanding one's attitudes could have strong predictive power over one's decisions.

John hates reformists. He thinks they are lurking for political power under the cover of liberalism and representation of grassroots.

We already know John will not vote for reformists and probably could guess his preferences in other aspects, such as choices of news outlets, political affiliations and maybe movie tastes. Humans are amazingly consistent in some sense.

Our cognitive processes are products of millions of years' evolution. What we are probably still unclear about is how the rapid transformation of our informational and social landscape brought by technological changes impact our cognitive process. I couldn't help but wonder the following questions:

How do digital communities shape and reshape our schemas?

How much do I care about others’ posted lives on social media?

As an Asian, should I care about the beauty trends of western girls? (self-schema) Should I plump up my lips? (decision) Should I dye my hair to follow the beach hair trend? (decision) What if my friends are doing this? (group-schema)

How can we tell misinformation when it is in disguise?

How wrong is Google search?

"Can dogs eat…?" is probably my top Google search query. It often happens when I want to feed that exact thing to my dog; therefore, I am merely looking for a confirming statement from the crowd wisdom of the internet. (confirmation bias) If the recommended answer from Google said "yes", I am happy and would not look any other results below. Is the recommended answer 100% correct? Should I spend a few more minutes to check two more page of search results by reading their titles? Are two more pages of confirming results enough to trust Google or the algorithm merely lists out similar answers? How many pages should I check before I can trust?

The truth is that it is incredibly hard to tell misinformation. It requires our constant mental effort. The further questions are who would do that? and how many of us are willing to do so?

How does the internet arouse our emotion?

Why do I get angry over a post someone did across the ocean?

Nothing is official until they are Instagram official. Without a picture telling your followers that you are in love, you are not serious enough. If some John2008 attacks your comments, you are ready to engage comment wars and bitch John2008 with your friend JaneD.

The internet has become our digital space to show and prove affection, unleash anger and vent about unfavourable events. Sometimes, we feel better; oftentimes, our emotion is exaggerated, leading to real-world unwise decision.

How does digital marketing shape our attitudes?

why do I end up buying from Amazon?

The ABC model — Affect, Behaviour, Cognition, is very much in play here. Though as much as I try to avoid and skip through advertisements and promotion videos, they are ubiquitous and constantly creeping in our browsing experience. On one hand, we need ads as they provide us with new information about new products that enlarge our selection as consumers; on the other hand, we also hate ads because we regard them ingenuine. Regardless, the constant presence of ads poses immense impact on our belief towards products (luxury? inferior?), stimulate our emotion towards them (love it ? hate it? ) and eventually direct our purchase decisions (buy from stores? Amazon?).

We live in an age of information overload. It is increasingly difficult to make a decision. Once we long for informed decision, now we are being "informed" too much. We are being fed with information by a recommendation algorithm that picks up every single browsing footprint of ours and combines that information with a collection of trending topics and sponsored ads. We are scrolling through something familiar and something novel. Our brain indulges in the comfort of familiar content and loves the surprise from new content. There are a lot of criticism and concerns over content regulation on social media. These concerns are desperately needed. Only with opposing forces can we manoeuvre artificial intelligence towards human good.


Daniel Kahneman: Thinking, Fast and Slow

Yuval Noah Harari: Sapiens

American Psychological Association PsycLearn:

LeDoux, J. E. (2000). Emotion Circuits in the Brain. Annual Review of Neuroscience, 23(1), 155–184.



Yinghui Liang

Aspiring management researcher. Previously auction and wine industry veteran. Programming language: Python, R, SQL, C