I was reading an article this week about a Federal Government investigation into cars on autopilot. It stuck me how far behind the human brain the autonomous car manufacturers still are. Those of us that have driven for some time, will already have experienced driving by autopilot. We arrive at our destination but have no recollection of the journey and how we got there. This is especially the case for frequently travelled journeys. It happened to me the other day. I arrived in London without remembering exactly how I got there. Sometimes we find ourselves starting our journey to work even though we were on our way to the shops on a Saturday! So automatic is the process that our autopilot takes over at a familiar junction.

Sometimes during such a journey, we are suddenly aware that we are braking and then look around to see why. When these things first happen, we worry that somehow our concentration has lapsed. Over time we come to realize that it is our brain operating on autopilot, perfectly safely. It has already perfected the “technology” being developed by autonomous car makers.

Daniel Kahneman is a Nobel Laureate in Economics. He is famous for being one of the founders of behavioural economics. His 2011 bestselling book, Thinking Fast and Slow introduces the idea of two stereotypical kinds of thinking process. System 1 thinking is autopilot thinking - effortless and automatic. It is instinctive and happens intuitively and without us consciously using our brain. He points out that we are perfectly capable of having a conversation whilst driving. If however we must cross the flow of traffic, we stop talking. There are times when we trust the autopilot and times when we do not!

Brian Wansink works on obesity at Cornell university. He conducted a fiendish experiment, which illustrates the power of System 1 thinking. He asked people to eat a bowl of Campbells Tomato soup. Unbeknown to the poor respondents the bowls were doctored. He could fill them from the bottom. However much the people ate, the level of the soup did not go down. People kept eating, on autopilot. They did not notice that they were eating vast amounts of soup. On average they ate 75% more soup than those respondents without a self-filling bowl.

Kahneman argues that our associative memory drives System 1 thinking. There we hold large networks of information which allow us to abstract, categorize and explain causes. An event triggers our associative memory. We then try to make the event coherent with what we already know. If we can fit the event into an existing pattern or script, we will continue to operate in autopilot mode. Only if we cannot do this do we trigger System 2 thinking.

System 2 decision making is much more deliberate, it is slower, and it is logical rather than intuitive. According to Kahneman, we can even know whether someone is System 2 thinking from their eyes. The effort causes them to dilate their pupils by half. We need System 2 thinking to process “surprises”. We need to rebuild the coherence in our associative memory. Once we have processed the surprise, we can recognize it in the future. Things such as driving start in System 2 when we are first learning, but as they become more routine, we can drive using System 1.

The study of consumer decision making started in economics. As a result, the deliberative kind of decision making is implicitly assumed to be "better”. But older people have much more knowledge of the world stored in their associative memories. In many more situations than younger people, they can rely on their Systems 1 thinking. They have higher levels of “expertise”.

In healthcare decisions and more routine consumer decisions, the evidence is that the Third Agers seem to do as well as the young. In consumer financial decisions there is some evidence that they do worse. This is consistent with the loss of numerical ability that seems to come with age. The classic example of expertise dominating pure deliberative reasoning are crossword competitions. There is an almost linear relationship between “number of words completed” and age. The only exception is a slight flattening out of the relationship at above age 70.

Expertise Makes Decision Making Smarter

Expertise comes from the wealth of knowledge about a specific area stored in memory. Evolution means that our memory needs to abstract and categorize. We seek cognitive efficiency. Our memory systems remove clutter. A neuro-scientist called Levitin captures this perfectly:

“Our memory is not a videotape but a jigsaw”.

We abstract and categorize memories. When we need them we reconstruct them from the pieces. Scripts are a way of storing the pieces and we can fill in the gaps. Individuals over their lifetimes build up scripts for familiar consumer events and decisions. This enables us to make decisions without much conscious effort at all, to use our “autopilot”. Research has shown that our ability to use such scripts remains constant with age. Older adults enjoy the sheer number and complexity of the consumer scripts they hold.

Even if we do not use full autopilot, expertise helps. We do not need to resort to full deliberative System 2 decision making. Instead we can use our past experiences of the same decision to “short circuit” the processing. We can reduce the number of brands we consider and the information we collect on each. We can assess how satisfied we are with a service from a few key “tests”.

We can still use our Systems 2 deliberative process if want to. The importance and relevance of the decision can prompt a change to System 2 thinking. In one study respondents memorized grocery prices. The list contained both realistic prices and prices that were not realistic. Older people did better at remembering realistic item prices rather than unrealistic ones. For them the task seemed more relevant. Younger people scored the same on the realistic prices as the older group. They remembered more unrealistic ones. Tasks that we see as irrelevant we downgrade in the priority for System 2 deliberative decision making.

It is relatively easy to lead older people to use System 2 thinking. Something as simple as changing the instructions for the task can do it. Asking them to focus on the decision or to “consider the reasons for their decision” will trigger System 2 processes. So too will telling them that they will have to prove they made the correct decision afterwards. All these instructions move the decision out of the sub-conscious mode.

Is efficiency of decision-making wrong? Does a “non-rational” decision imply a bad decision? Third Age consumers are smarter decision makers because they have the expertise. The decision may not always be perfect. But perhaps perfection is not needed when choosing where to have a snack lunch?