Why People Make Bad Decisions & How To Change It

Bad Decision - Decision-making skills

Decision-making is an essential aspect of daily life, influencing the quality of our lives, the direction of our careers, and the relationships we build. It involves evaluating alternatives and choosing the best course of action. However, not all decisions are good, and bad decisions can have significant consequences, leading to undesirable outcomes and setbacks.

For example, in 1962, after listening to their audition tape, Decca Records decided to pass on signing The Beatles because the executives thought guitar groups were falling out of favour with the public. Later, The Beatles chose to sign on to EMI  and by the summer of 1967 the band earned $38.5 million.

Bad decisions occur for various reasons, including emotional triggers such as fear, anger, or stress, cognitive biases, a lack of information, overconfidence, and external influences such as peer pressure or societal norms.

It is crucial to understand these reasons to improve decision-making and avoid the negative consequences of bad decisions. Self-awareness and critical thinking can enhance decision-making skills and make better choices that lead to positive outcomes.

Emotional Triggers

Emotional triggers can significantly impact decision-making by clouding judgment and leading to bad decisions. Emotions such as fear, anger, stress, and anxiety can overwhelm rational thinking and lead to hasty, impulsive decisions. For instance, fear of missing out (FOMO) can cause people to make poor financial choices or invest in risky ventures. Anger can lead to poor communication, damaging relationships, and decision-making in retaliation instead of logic.

Stress can cause individuals to choose options that offer immediate relief instead of long-term benefits. To manage emotions during decision-making, techniques such as mindfulness, deep breathing, or taking a break can help calm the mind and promote rational thinking. Emotions can provide valuable insights, but it is essential to manage them to avoid making decisions based solely on impulsive feelings.

The sinking of the RMS Titanic may be one of the most infamous disasters of our time because of the overwhelming bad decisions that were made. From a lack of adequate safety equipment to not having binoculars or proper lighting for the look-out crew to only putting 16 lifeboats (which is one-third of what was required) to not filling the lifeboats to capacity when the ship was sinking made the Titanic a disaster waiting to happen… and it did, killing more than 1,500 passengers and crew.

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Cognitive Biases

Cognitive biases refer to systematic errors in thinking that lead to inaccurate judgments and decisions. These biases can affect decision-making by influencing the way we process information, interpret data, and evaluate options.

Examples of cognitive biases include confirmation bias, where individuals seek information that confirms their existing beliefs, and the halo effect, where one’s overall impression of a person, product, or company influences their evaluation of specific attributes. These biases can lead to poor decision-making, such as ignoring contrary evidence or overestimating the potential of a product.

To identify and overcome cognitive biases, individuals can practice self-awareness, seek diverse perspectives, and challenge assumptions. Critical thinking and a willingness to question one’s thinking can help mitigate cognitive biases’ impact on decision-making.

Lack of Information

A lack of information can lead to bad decisions by creating uncertainty and increasing the risk of negative consequences. Insufficient information can lead to overlooking essential details, relying on assumptions, and failing to consider all available options.

To make informed decisions, gathering relevant and accurate information is crucial before deciding. This includes identifying relevant sources of information, evaluating the credibility of the sources, and seeking different perspectives.

Methods for acquiring information can vary, including online research, expert advice, surveys, or data analysis. It is essential to consider the quality of the information obtained, the potential biases or limitations, and the relevance to the decision at hand. Gathering relevant information can improve the quality of decision-making and increase the likelihood of positive outcomes.

While Netflix was still a fledgeling company they approached Blockbuster with a proposal to deal with the digital side of their company while Blockbuster focused on their physical locations. Failing to anticipate the future of home entertainment, Blockbuster declined and well, the rest is history. Rumour has it that there is still one Blockbuster store left somewhere out in the world (in a town called, Bend, Oregon).


Overconfidence can lead to bad decisions by causing individuals to overestimate their abilities, ignore potential risks, and overlook important information. For instance, overconfidence can lead to underestimating the competition, overvaluing investments, or neglecting to plan for contingencies.

Self-awareness plays a critical role in preventing overconfidence by encouraging individuals to assess their capabilities realistically and acknowledge the limitations of their knowledge. Strategies for avoiding overconfidence and promoting critical thinking include seeking feedback from others, testing assumptions, and considering alternative viewpoints.

It is also helpful to focus on the process of decision-making rather than the outcome, acknowledging that even the best decisions can have unfavourable outcomes. By embracing a mindset of continuous learning and improvement, individuals can avoid overconfidence and make better decisions.

External Influences

External influences can significantly impact decision-making, as individuals are often influenced by social pressures, cultural norms, or other external factors beyond their control. Examples of external influences include peer pressure, where individuals may make decisions based on the desire to fit in or gain acceptance from a particular group. Societal norms may also shape decision-making, as individuals may conform to expected behaviours or values.

Techniques for resisting external influences and making autonomous decisions include developing a clear sense of personal values, seeking diverse perspectives, and challenging assumptions. It is also helpful to consider the potential consequences of decisions and the long-term implications of different choices. By developing self-awareness and the ability to resist external pressures, individuals can make decisions that align with their values and priorities.


People can make bad decisions for a variety of reasons, including emotional triggers, cognitive biases, a lack of information, overconfidence, and external influences. Emotions such as fear, anger, and stress can cloud judgment, while biases can lead to inaccurate thinking and evaluations.

A lack of information can increase the risk of making poor decisions, and overconfidence can lead to underestimating risks and overestimating abilities. External influences, such as social pressures or cultural norms, can also affect decision-making. To avoid making bad decisions, it is crucial to practice self-awareness and critical thinking, challenging assumptions, seeking diverse perspectives, and evaluating options carefully.

By making conscious and informed decisions, individuals can increase the likelihood of positive outcomes and avoid regrets. Making good decisions is essential for achieving personal and professional goals, building healthy relationships, and creating a fulfilling life.

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