Narrative Thinking and Decision Making

by Lee Roy Beach

Narrative Thinking and Decision Making

This monograph is available for free download as a PDF file.

Abstract

Cognitive narratives are the stories we tell ourselves to make sense of our experience. They provide continuity between the past and present and allow us to make plausible forecasts about what the future will be if we do not intervene to change it. Decision making is the act of evaluating the desirability of the forecasted future and, when it falls short of our values and preferences, choosing appropriate interventions to ensure that the actual future is more desirable than the forecasted future. In short, decision making is the process through which we manage the development of our narratives and, in doing so, manage the progress of our lives.
This view of decision making is in sharp contrast to the view that shaped the psychological study of decision making since its inception. In the 1960’s, psychologists adopted economics’ rational choice theory as their “gold standard”—Economic Man was the model for how decisions should be made. Almost immediately, research showed that unaided decision makers bear little resemblance to Economic Man, whereupon researchers turned to cataloguing human failures and tweaking rational choice theory to make it more descriptive. Through it all, either explicitly or implicitly, they retained Economic Man as the gold standard—failures were defined in reference to what he would do and the tweaked models preserved the basic form of rational choice theory while adding various psychological features.
Rational choice theory is fundamentally about the best way to make bets, but by assuming that all risky decisions are essentially bets—the gamble analogy—the theory can be extended to all risky decisions, which is most decisions. This permits rational choice to be broadly incorporated into economic theory as the model of what consumers and other economic actors do when making risky decisions. The problem is, decision makers aren’t economists (or psychologists) and they don’t frame their decisions as bets; they frame them as choices about plans of action to which they expect to devote time, energy, and good judgment in an effort to make sure they turn out the way they want them to. In short, they view decisions as tools for actively managing the future so it conforms to their values and preferences; they simply aren’t trying to do what rational choice theory does.
Note the difference between active management of the future and the primary requirement for gamblers must make their bets and then wait passively to see if they won or lost—intervention is cheating. In contrast, decision makers seldom are passive and almost always intervene to make sure things come out they way they want them to. The fact is, the gamble analogy is largely irrelevant to real-life decision making. And, if the gamble analogy is irrelevant to a psychology of decision making, the theory of rational choice is irrelevant, leaving psychology without a theory.
This monograph describes an alternative to rational choice theory and its psychological variants. The proposed theory—called narrative-based decision theory (NBDT) is based on the work of Jerome Bruner, a major figure in cognitive psychology for more than half a century. Bruner distinguished between two forms of cognition, narrative thought and paradigmatic thought. Roughly speaking, narrative thought is discursive and paradigmatic thought is procedural. Theories based on an analogy between human cognitive processes and any codified procedure (such as calculation of probabilities or choices among bets) implicitly assume that paradigmatic thought is the “natural” way for people to approach problems. From there it is just a short jump to assuming that people always are trying to think paradigmatically, but they aren’t very good at it. Bruner challenged this assumption, arguing instead that paradigmatic thought grew out of—and is supplemental to—narrative thought, which is the primary mode of thinking. Paradigmatic thinking is not an end in itself; it always plays a supporting role and it usually requires both instructions and tools. Narratives are where the action is.
The first goal of this monograph is to describe the logic underlying NBDT. The second goal is to suggest some useful paradigmatic procedures that can help us keep our narratives straight when things get complicated.
The first part of the monograph (Chapters 2 through 5) examines four
· Cognitive narratives provide meaning and continuity by linking the past with the present and allowing us to make educated guesses about the future (called forecasts).
· Based on our past experience and our values, we create rules, some of which are used to make forecasts and some of which are used to evaluate the desirability of the future offered by those forecasts
. When the forecasted future is undesirable, we construct plans that guide actions designed to pr...

236 pages, ebook

First published January 1, 2009

About the author

Academic Biography

I am the McClelland Centennial Professor Emeritus of Management at the Eller College of Business, University of Arizona, where I also was a Professor of Public Administration and of Psychology. I received my Ph.D. in Psychology from the University of Colorado, under Ken Hammond, and then served in the U.S. Navy at the Aviation Psychology Laboratory in Pensacola and the Office of Naval Research in Washington. This was followed by two years of post-doctoral work in decision research, under Ward Edwards, at the University of Michigan.
I began my academic career in the Cognitive and the Organizational Studies programs at the University of Washington, where I served as Chair of the Psychology Department, received the Alumni Award for Distinguished Teaching, was named Professor of the Year for the State of Washington and Bronze Medalist for National Professor of the Year, received the Feldman Award for research and was named to the University Teaching Academy. I have been a Visiting Professor at Cambridge (U.K.) and Leiden (Netherlands) Universities and at the University of Chicago.After joining the business faculty at Arizona, I was named Professor of the Year, served for three years as Vice Dean, taught graduate and executive education courses, and was active in research and consulting.
Before I retired, I was a Fellow of both the American Psychological Association and the American Psychological Society and a member of the Society for Organizational Behavior, the Society for Judgment and Decision Making and a regular contributor to the European Conferences on Decision Making. I was on the editorial boards of Organization Behavior and Human Decision Making, The Journal of Behavioral Decision Making, and The Journal of Forecasting and have published over 120 scholarly articles and 7 books on decision making and organizational behavior. Among the more recent of the latter are:

The Psychology of Decision Making: People in Organizations (2nd Ed.) (With Terry Connolly). Thousand Oaks, CA: Sage (2005).
Leadership and the Art of Change. Thousand Oaks, CA: Sage (2006).
The Human Element: Understanding and Managing Employee Behavior. Armonk, NY: Sharpe (2007).
Narrative Thinking and Decision Making: How the Stories We Tell Ourselves Shape Our Decisions, and Vice Versa.