Tough Choices

How making decisions tires your brain:

The human mind is a remarkable device. Nevertheless, it is not without limits. Recently, a growing body of research has focused on a particular mental limitation, which has to do with our ability to use a mental trait known as executive function. When you focus on a specific task for an extended period of time or choose to eat a salad instead of a piece of cake, you are flexing your executive function muscles. Both thought processes require conscious effort-you have to resist the temptation to let your mind wander or to indulge in the sweet dessert. It turns out, however, that use of executive function—a talent we all rely on throughout the day—draws upon a single resource of limited capacity in the brain. When this resource is exhausted by one activity, our mental capacity may be severely hindered in another, seemingly unrelated activity. (See here and here.)

Imagine, for a moment, that you are facing a very difficult decision about which of two job offers to accept. One position offers good pay and job security, but is pretty mundane, whereas the other job is really interesting and offers reasonable pay, but has questionable job security. Clearly you can go about resolving this dilemma in many ways. Few people, however, would say that your decision should be affected or influenced by whether or not you resisted the urge to eat cookies prior to contemplating the job offers. A decade of psychology research suggests otherwise. Unrelated activities that tax the executive function have important lingering effects, and may disrupt your ability to make such an important decision. In other words, you might choose the wrong job because you didn't eat a cookie.

More after the link.

It seems like this phenomenon can help explain quite a few observations seen in empirical research -- both in psychology and economics -- things such as status quo bias, prospect theory, and why depressed people have such trouble making simple decisions. It also introduces the concept of "decision making costs" as an aspect of understanding the complexity of human behavior. If each of us has limited cognitive resources and the way we use these resources affects the quality of our decisions, it could help to explain much of the irrationality we see in the world that is not predicted by traditional economic models.