In a world where snap judgments often guide our decisions, a new study by researchers at Duke University offers a compelling case for pausing before making critical choices. According to the research recently published in the Journal of Experimental Psychology, delaying decision-making can reduce the chances of making rash judgments based on first impressions. This is particularly relevant for members of TEXPERS, as the stakes in managing public pensions demand careful deliberation, not hasty conclusions.

The study, published Sept. 9, 2024, in the Journal of Experimental Psychology: General, explored how people assess value when presented with different sequences of information. Participants were asked to evaluate virtual boxes of items in an imaginary online garage sale. Some boxes presented valuable items upfront, while others had treasures hidden in the middle or bottom. The twist? All the boxes had the same total value.

When participants had to make their decisions right away, they overwhelmingly preferred the boxes that showed the valuable items first, falling prey to a bias known as primacy bias. However, when participants were given more time and made decisions after an overnight delay, they made more rational choices, weighing boxes with valuable items in the middle or at the end, equally with those with a solid first impression.

The Power of Deliberation

Lead author Dr. Allie Sinclair explained that those who made quick decisions often overestimated the value of the boxes they judged first and had a more challenging time recalling specific details about why they preferred them. She said that this demonstrates how initial impressions can cloud judgments and prevent people from objectively evaluating situations objectively.

However, when participants took time to reflect, they became more thoughtful, focusing on the overall value of the items rather than the order in which they were revealed. As Dr. Alison Adcock, a Duke professor of psychiatry and behavioral sciences, put it: "When it's over, our brain knits it all together in memory to help us make better choices -- and that neat trick happens overnight."

Implications for TEXPERS Members

For TEXPERS members, these findings are particularly relevant. Whether evaluating new investment opportunities or deciding on governance matters, the stakes are high, and the decisions made will impact the financial future of public employees across Texas. Here's how the lessons from the Duke study can be applied in practice:

1. Avoid Snap Judgments in Investment Decisions: It's easy to be impressed by the initial presentation of a potential investment. However, consider taking a step back before making a decision. Sleeping on it—or even simply delaying the decision to gather more information—can help ensure that you are not overly influenced by the initial appeal and that all factors are considered.
2. Encourage Deliberation in Board Discussions: When making decisions as part of a board, the loudest or most persuasive voices can sometimes sway the conversation early on. Encouraging a process that allows time for reflection can help ensure that the board's decision is based on all available information rather than being unduly influenced by the first proposal.
3. Enhance Communication with Stakeholders: Whether you're communicating complex pension policies or the rationale behind a particular investment choice, giving yourself time to thoroughly process the information before relaying it to stakeholders can lead to more transparent, more accurate communication. This could help ensure that stakeholders feel confident in the decisions being made on their behalf.
4. Better Vendor Selection and Contract Negotiations: Like the participants in the Duke study who gravitated toward the boxes with valuable items on top, TEXPERS members might be tempted to choose vendors or negotiate contracts based on flashy presentations or initial impressions. However, just as the study participants made better decisions after a delay, trustees can make more informed choices by thoroughly evaluating all the options on the table.

The Wisdom of "Sleeping on It"

Sinclair said, "Judging from first impressions may actually be a good thing for choices at the moment." She explained that snap judgments might save time and energy in low-stakes situations, such as quickly deciding whether to continue watching a movie. 

However, in cases where long-term outcomes are at stake—such as managing public employee pension funds—the Duke study suggests there is wisdom in the old adage of "sleeping on it." For TEXPERS members, this means recognizing the value of deliberation. Decisions regarding pensions and investments have long-term consequences, and taking the time to reflect can lead to more balanced, rational outcomes that will benefit all involved.

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