In this episode of the Cognitive Engineering Podcast, the team responds to a listener’s question about how to buy a car, using it as a springboard into wider ideas about decision-making. They explore the tension between analytical approaches—spreadsheets, cost breakdowns and rational comparisons—and more instinctive, emotionally driven choices. Drawing on their own contrasting experiences, from careful, criteria-based selection to impulsive, passion-led purchases, they highlight how factors like price, depreciation, usage and even the buying experience itself can influence both decisions and long-term satisfaction. The discussion also touches on how identity, politics and personal values can shape preferences, as well as the role of emotional responses in supposedly rational decisions.

Broadening out beyond cars, the conversation examines how people make big, infrequent decisions more generally, from buying houses to choosing careers. The hosts discuss psychological concepts such as “maximisers” versus “satisfiers”, the role of subconscious decision-making and the tendency to rationalise choices after the fact. They note that more analysis doesn’t necessarily lead to greater satisfaction, and may even increase regret. Practical takeaways include reframing big purchases as ongoing costs versus ongoing value, being honest about what you actually care about and recognising that people quickly adapt to new possessions. Ultimately, they suggest that while structured thinking can help, overthinking can be counterproductive—and sometimes the better question isn’t which option to choose, but whether you’re asking the right question in the first place.

Hello and welcome to the Cognitive Engineering Podcast brought to you by Aleph Insights and produced by me, Fraser McGruer. I'm here with Peter Coghill and Nick Hare of Aleph Insights. On this podcast we look at a wide range of topics from an analytical viewpoint.

And today we're asking how to buy a car. Nick, how'd you buy a car?

Well, this question actually comes from loyal listener Helge.

Hello, Helga.

And he is looking into buying a car and he wants to know a number of things, actually. What. What metrics and parameters and statistics should we look at?

Should you go with spreadsheets and analysis or should you go with your heart the right colour? Which part of your body should you use? We've got a number of those. Should you think about politics? What if you bought a Russian car?

Would you be supporting the Ukraine war? You know, so that's the question, really. A whole bunch of things.

But I think in general, the question of how should you go about making these quite big, fairly one off purchases? Because it is something that comes along every so often and when it does, actually it could make quite a big difference.

Okay, so these are important decisions, Right. For the reasons that you've said.

They come along relatively infrequently, but they're with big stuff because we don't particularly care about, you know, do we go for this cookie or that one?

Right, yeah.

Downsides of getting it wrong are very slight.

Yeah. And remind me what this podcast is about that we're doing. I mean, in general.

Well, it's about analysis and decision making. Boom. So, Helga, it's absolutely core cognitive engineering topic.

It is, isn't it?

Yeah.

So.

And weirdly, it's not something we actually really cover. It is actually analysis and decision making.

Yeah, yeah, yeah, yeah.

We're going to get discovered now.

Exactly.

Yeah.

I should. To set expectations. We're not actually going to give a recommendation as to which car to buy. Oh, no. Okay.

Spoiler. Yeah.

Well, no, that's a shame. How to think about the problem. Okay, to the problem. Oh, dear.

Because I was about to say. Oh, don't worry, Helga, strap in.

Well, no, what we don't know is utility function, for one thing.

Right. I don't know.

I can't remember what.

So look, we'll start off with you, Nick, because we know what I think about this. We'll come to that later. Go for it, Nick. I guess. How are you going to frame this sort of set the.

So I thought I'd. Okay, so here's my approach. Yeah, look at what people actually choose Carl.

Based on what does the evidence suggest that people actually that that affects their decision? Then look at what seems to affect their actual satisfaction with their purchase. Now is there a difference?

So that would be interesting for a start off, you know, is, is do people report liking a car for different reasons than why they buy. Buy the car?

Because that's something we should take into account then actually the question of well, how should you go about structuring the decision problem? How, how, how should you, you know, what should Helga's spreadsheet look like?

And then are there some common biases and pitfalls that we want to avoid? So that's what I've tried to look at.

Although I have to say, as usual with things that seem like they should be common problems, there is not very much good data out there. Nearly all of the data is survey data. So you know, they're asking people what do you look for in a car?

And I would suspect people don't really know what influenced their decisions. So there's that. But also when you ask people about their satisfaction that has a whole bunch of other problems to do with them.

Same issue as when you ask them, you know, how happy are you now versus how satisfied are you with your life? How you phrase that question makes quite a big difference in the answer.

Well, I mean, good news, we've got some, a crack team of researchers on this to delve into this issue. Right, good. And we'll generate some data.

When are they coming off?

There's something I want to do. I don't know if we should do it right now or just after you've done this is. We've got a, we could do a quick survey here.

Right, right.

Of what car do you want to, should we do that right now and talk about it?

Sure, yeah, why not?

So Peter, tell us what car you've got and talk to us about, tell us about your decision making process for that car.

But yeah, it was basically nearly a new car.

And how did you, what were your kind of requirements? How did you make the decision? And, and then how satisfied are you with your purchase?

I'm extremely satisfied with it. Criteria were is I wanted a big enough car with a big enough boot to get bikes and all sorts of other stuff in it.

I wanted a car that was Comfortable for my ailing, my ailing back and aging body. And I wanted a sort of mid, you know, it's not really a mid tier car, but like not a.

Something that made me feel quite good driving it, but not sort of too swanky. That was so expensive.

Okay, did you draw up a spreadsheet or do you think mentally you had a spreadsheet of these points?

No, for this, this decision I didn't draw up a spreadsheet because really I kind of narrowed down what kind of car I wanted using. Using, using heuristics, using skill and judgment.

Yeah, yeah.

First. Yeah. And I was pretty sure I wanted this or something else. I kind of. Everything else was either too priced out or not the right kind of car. So.

Okay. All right.

Nick, we've got one of those EVs. Yeah, I think it's an MG.

Okay.

I'm not sure. My, my decision making method was to let my partner decide what car to get. She does nearly all the driving. I hate driving and I think other.

People hate it when you drive as well.

Yeah, yeah, I know that's right. I hate it when I drive and.

So does everybody else.

And so. And so, yeah, so that was the method I used. She bought it.

Okay.

And that's the car we use. And it is fine.

I mean, the thing I really like about it is it turns parking into a video game because it has this little screen with a top down view and it's like playing Grand Theft Auto one. And I can do that. I'm fine with parking when there's a little video game to play.

It's just when I've got to do it using spatial awareness that I have problems. So that's it really. I mean, cars make almost no difference to my happiness. There's no part of my identity invested in the car that I drive.

And if I can sit in it and actually drive it, that is like 100% of the requirement that I have.

And if it gets you from this point to that point, all it's in one piece, you're happy.

You've demonstrated your indifference because you're not even sure what make it is exactly. You know what color it is.

I think it's sort of gray, Blue.

Right.

Okay. I used to be like you.

Right.

But no longer. So I've got two cars and one of them, and I like you. A lot of people I remember parking somewhere, going to a new job and they said, what car?

What's your. Oh, what's your car? And what's the registration? I said, I have no idea. And they said, what kind of car is it?

And I said, I don't know, I'm not really good at that kind of thing. But that's for one of my cars, which is a Toyota Yaris. And it just sort of gets me from A to B kind of thing.

And then for complicated reasons, I needed a second car. I've got a Jaguar xjs, two cars,.

But only one is a Jag.

Yeah, exactly. And I bought it. Imagine my process. You guys know me well enough.

And imagine my process in buying pretty much anything big about how I would go about that. And it's like the anti Coghill, right? It's sort of like, yeah, let's go for it, I want that. And I just had a chunk of cash.

I went, yeah, I'll buy that. It actually wasn't that expensive and it's got this great big beautiful Jaguar xjs.

And it's the most impractical car you can imagine because the maintenance on it is a disaster. I paid double what I should have for it.

And yeah, I seem to remember once we were in it together and it was barely surviving contact with a traffic jam.

Correct?

Yeah, that's right.

It was really overheating. And for 18 months it was off the road. I had a mate of mine helped me out who's a mechanic and he sort of spent hundreds of hours on it.

Long story short, it now pretty much works. And it is the.

Makes you look cool.

Well, I need all the help I can get.

Right.

But it's the. It's the. It's the biggest. It's the most important thing in my life. Okay.

You know, with my sort of family, children, sort of distant second, third kind of thing. I love this car because it's just so beautiful and I love driving it.

And it makes a great big sort of noise, which is weird for me because in one sense that sort of fits me. That's kind of a bit what I'm like. But on the other hand, I actually don't care about cars really at all. I don't know anything about them.

And with this car, people ask me questions. I'll wrap up in a second edit point. With this car, people ask me questions. I have no idea what to say because I don't understand cars anyway.

It was a classic sort of me kind of decision. I love it. Buy it. Spit a buy as a resource, but I love it.

Yeah, I mean, I think we'll get on to the benefits of that approach because I think there are some.

Yeah, yeah.

Yeah, Anyway, so that sort of gives us sort of a little sort of, you know, I think some nice different approaches there. But anyway, go for it, continue.

Well, okay, so what does the evidence suggest actually influences people's car purchases? Now, there is not very much good data about this. You can say, number one thing obviously is going to be price.

And price is very closely predictive of age, certainly for a given model.

Right.

Declines.

One of the things everyone knows about cars is that the, is that the depreciation is massive, you know, so a new car in the UK on average costs between 30 to 40k.

How much? 20.

30.

30 To 40k. Jesus Christ. New car.

Yeah.

The minute someone has sat in it, it's, it's immediately worth about 10k less. So you drive it off the lot, you sell it, the next day, it's suddenly worth 10k less.

People pay an enormous amount for a new car, an unjustifiably high amount.

But then if you look at how depreciation works after that, after about 10 years, you know, typical 10 year old car is worth about 5 to 10k for example, on average. So it's gone down by a factor of about six.

But that's not actually, actually, I mean it's pretty much a straight line apart from that first bit where it's a kind of exponential decay. It actually kind of more or less tails off. The average lifespan of a car is about 15 years.

So you know, if you get one, if you get a new car in principle, that's got 15 years of life left in it, if you get one that's 10 years old, it's only got, you know, five years of life left in it.

So actually, given that you're not paying for the lump of metal, you're paying for the service it's giving you, there is, it's not actually too bonkers the way that price declines. But clearly that's the number one thing. How much do I want to pay?

And then most of the answer to that question is going to be related to the age of the car and its make.

So survey data, what I really wanted was loads of data about the color of a car, the position it was sitting in, the lot, the mood of the person buying, and some really hardcore thousands of data points and some econometric analysis, but that doesn't exist. What people say makes a difference to their purchase is roughly evenly split between four things. One is the appeal, right, of the vehicle.

The gentle.

Yeah, what does it look like? How comfy is it when you sit in it? Little features Buttons you compress and things that go. Ownership costs.

People claim to pay attention to that, although I suspect they don't enough or perhaps they do too much. The quality and reliability comes up now I think that could be wrapped into ownership costs and then service satisfaction. Right.

So how, how much they like the buying experience.

Oh really?

Yeah.

People that, that makes, it does make a difference.

Yeah, yeah, yeah. If you, if someone is, you know, if you've got a nice attentive car salesman, you know that's going to affect your.

Yeah, yeah. You don't want a hard sell.

Yeah, yeah. Whether should it? Well, we'll get onto that in a minute.

So that's what people, those are the main things that people, we think people are paying attention to when they're thinking about buying a car. But then if we ask the question, well, what actually seems to affect people's satisfaction with the car? It's very hard to find a big difference.

Is there data out there on that at all?

Well, again it's surveys.

You have to find people who've bought a car in the last couple of years and ask them how satisfied are you with it and then ask them a bunch of things about the car itself, but also what other things happened.

So it turns out I suspect there is more data. I suspect the big car manufacturers have their own internal studies, but they're not sort of peer reviewed and publicly released.

Yeah, but also, I mean compared to a lot of other types of information that you get as a, you know, as a retailer or a manufacturer, there aren't many data points, you know, you're not compared to the number of say tins of beans sold or cans of Coke or the number of clicks on a website or something, you know, we're orders of magnitude lower. So you're not going to have as much data about, about understanding what it is that affects customers willingness to buy your thing.

So I think we can sort of assume that cars probably aren't quite as optimized to being as attractive as possible as they perhaps could be. So what that means is we can't infer from simply looking at cars that is clearly what it is that customers massively want, if you see what I mean.

Whereas you can do that with other things. You can go this websites, they've kind of worked websites out. They know things on websites are designed.

To make you seem to run experiments.

But basically it lines quite what quite well, aligns quite well with what people, what seems to affect people's purchases. But the thing that surprised me out of that list of things which people look at is.

Turns out the buying experience appears to affect people's subsequent sense of satisfaction with the car, which I find very odd because you sort of feel like it shouldn't, you know, if the person you bought it from was really nice and treated you well and gave you a cup of tea, you. It sort of feels like that shouldn't make a difference to how much you like the car.

But it turns out he sort of does satisfaction with the experience of buying it. Apparently something that people say affects their subsequent satisfaction with it.

But, but yeah, I mean, so basically those are the things that people say and which seem to affect people's. People's. People's perception of how sex.

I can, I can, I can see. I think car companies definitely optimize for that. So if you go into a show, car showroom, they are designed to be sort of comfortable places.

They're not too hot, not too cold, they're sort of got sofas everywhere, there's a free coffee machine and the staff treat you really well when you're, you know, when you're obviously not. Not wasting their time. But it's sort of designed to, I think to make you feel at home a little bit part of the club.

If you're buying a car there, then you're part of, you know, part of the Mercedes club or the Toyota Club.

Call it a family. The Mercedes family.

Mercedes family, yeah. And then. And subsequently you always get phoned up by the officer. They're constantly sort of badgering you, say, oh, well, we've got another one.

Do you want to, do you want to, do you want to trade it in and get the latest model? And they're sort of trying to sort of tease you in and keep you on keeping.

But they're doing it in a very sort of sympathetically well orchestrated way, not in an annoying pestery sales way, if they're doing it.

Right, yeah. Also something that strikes me about, you know, what you've said about data and how it's tricky to find in this.

But also it strikes me that, you know, Helga has written to us like this because he's buying a car. Right. I wonder if he would do the same if he was buying a house, if, if he was buying a computer, if he was buying some confectionery or.

A can of beans.

Right.

Probably wouldn't, but I think the closest comparisons would be something like a house, for example, which is a major purchase which you hold on for quite a while.

Right.

But he's asking about cars and there Is something people seem to have an emotional attachment, I think to cars, which maybe matches with what you were saying about the guy or girl who sells it to you as well. There's slightly unusual outlier in what you were saying, Peter. So much of that aligns with how sales should be done.

But with cars it seems particularly important.

I think I hear what you say about cars and I accept that that's how a lot of people.

Because a lot of people are not like us in that respect.

No, a lot of people's car is tied into their identity. But I sympathise because if you are like that, well, that's exactly like me with my house, like where my house is.

My house is not just providing a service of living in. It's also quite, you know, where it is, what it looks like. All of that is quite, quite key to my sense of who I am.

Whereas I suspect Peter is much less like that with his house. He's much more. Well, you know, it's basically provides shelter and warmth.

Yes, yeah.

And yeah, so, so power and Internet. Exactly, yeah.

Sorts out those initial hierarchy of needs, whatever it's called, you know.

Yeah, that's it.

Yeah.

And so, so, yeah, I do. But obviously if that's true, then you need to take that into account. It makes perfect sense. I mean, I would probably say, well, if, if it, if you.

It would be better not to have an identity that is geared around your car. But there's a question of whether or not you can help that.

You know, whether or not that is simply something you care a lot about, which you know, fine, if you are that kind of. But I mean I think a lot of these things, if you can manage to see it as well, I'm basically paying and in fact, I'll talk about this.

But think of it in terms of paying a monthly fee for your car and I'm getting a service in return is how you should think about it. And I think that's often one of the big issues with one off purchases is it's very hard to compare.

If you're buying a banana, you know how much the banana costs and you know the experience of eating a banana and it's done and dusted. But this is more like buying a banana tree and you have to kind of convert it into well, how many bananas is that a week?

And so I think what we're going to talk about is how should you structure thinking about these big purchases in a way that makes it easy to compare what you're getting with what you're paying.

Yes, that sounds right. And also because it's a longer term purchase, it does tie into identity more potentially these sorts of things that we're talking about.

Maybe I'm sort of going over this, but in the way that buying a banana doesn't. Anyway, my edit point, that last bit. So another edit point just now. Where are we going to. So, well, I feel like it's Peter's.

Turn to say something.

Yeah, but guys, remind. So where are we going to go with this? Just the chat. I mean, this is off podcast, as it were, but.

Well, I think we're digging a little bit more into how people make decisions. Kind of. There's a bit of a dilemma as a general thing. As a general. Yeah, general principles for decisions.

Okay. But I want to. I agree with that, but I want to get rid of cars first. First.

Yeah. Okay.

What points do you want to discuss with cars in terms of.

So actually sort of thinking about value and thinking about cost properly.

Okay. I want to broaden this out and I want to bring in Peter. But just before we do that, can you finish off cars for us, Nick?

Yeah, so I mentioned this thing about trying to compare the value with the cost. And because the value of a car is spread out over several years, but the cost is a lump sum that is quite hard to do.

So the number one thing I think you need to do when you're, when you're looking at these sorts of things for a specific car is to think about, well, how much am I paying per month versus how much am I getting per month? Right. So the number one thing really is what are you going to be using your car for? This is kind of obvious. Right.

But somebody who is using their car every day for an hour ought to want to pay more for a better car than someone who is using it more, you know, for 20 minutes at the weekend. That, I mean, you're going to be using it more. And yes, now some of that actually is still kind of the denominator in a sense is cost.

Because part of the value of a car is mileage.

Obviously when we talk about the age of a car, often that's a proxy for mileage which, which tells you kind of how much the car, how much juice the car has got left in it. But, but I mean, yeah, so that's the number one thing is how often are you using it. Right.

Because if it's not very often, your value might be we're looking at it in the driveway. But actually, you know, if it's a very small part of your life, then you shouldn't care as much about the bells and whistles.

Those bells and whistles are not going to add as much value. So think about that for a start. So put that right down, okay? Every week I'm going to be using it for an hour, let's say.

So what we're getting is an hour of time in this car. And then when we think about cost, like all these things, you want to try and turn it into a kind of stream.

Not, not think of it as a lump sum, but think of it as a stream. So let's, let's say, I'm just to give you an example. You've got the new car guy versus the used car guy, right?

So the new car guy, let's say, buys a new car every three years for 40k, sells it for, you know, maybe 25k at the end of that three years. So he's paying 15,000 quid. So £5,000 a year for having a relatively new car. The breakdown rate is about 1 in 10, 1 per year for a new car.

Now if you've got a new car, actually that's going to be covered by warranty or whatever. So, so reliability less of an issue. But you're looking at about £5,000 a year, right? So not far off. You know what, £400amonth.

400, £500Amonth, 10 or a day, right? So that's what if you're the new car guy.

If you're the buy a 10 year old car guy, the breakdowns are going to be more frequent, so more like one in four. So, but, but actually the, you know, you're paying less but you, let's assume you run it into the ground, right?

So you'd be spending more like 2k per year on a car, right? You keep it for 5 years. You spend 10k on this 10 year old car. It dies after 5 years. Let's say that's your, that's your preferred pattern.

You'd be spending 2k a year. So it's a lot cheaper. 40% Of the cost of having a new car, right? So let's just take those two points and think about them.

Or do I want to spend £5,000 a year on a, you know, on something that has still got new car smell and that boils down to what you care about at the end of the day, if you're not using it very much, if the difference between a swanky new interior and an old scuffed one doesn't bother you, don't. Don't, you know, go for the. Go for the let's get the used car, let's not worry about it kind of. Kind of approach anyway. That's. So that's top level.

That's how you should. That would be. My only advice really is think about it in annual terms.

Think about it in terms of what I'm getting per week and what I'm paying per week, because that's the only way you can compare what you're getting out of a car, which is a repeated service, with what you're paying, which is a big lump sum.

Okay. All very sensible advice. There's no way I would ever do any of this. It really depresses me.

Now I know where I'm going wrong in my life and, you know, the wheels are always falling off, but both literally and figuratively, because I don't heed this kind of. There's just no way I would go through these steps.

Just.

I mean, but that's my problem.

Yeah, I would say, but I mean, that's. Well, that's why you're living in abject poverty. You've just admitted you've got two cars, one of which is a Jag.

Yeah, but I'm happy. Yeah, sort of.

Yeah.

Okay, look, I want to. And also it was even especially depressing. We've been doing this for years. This podcast now is all about analysis and decision making.

I'm not sort of.

Well, I think we might be about to come to your defense, actually,.

Peter. Let's broaden it out. Are we going to move beyond cars? Is that your plan?

That was. Is my plan in a minute, but it's probably. It might be worth sort of thinking about what other.

Other than the sort of the identity laden kind of comfort or joy you get out the car. There are other things to consider cars, okay? One being the politics of buying cars.

So Tesla sales took a massive drop in the US but also even more so in Germany.

So yeah, my brother in law's got a tester and he got one of those stickers that said I bought this before Elon Musk went mental.

Yes, yes, well, he was. He's always been a bit mental.

Yeah, that's true.

And then there are other brands like byd, which I think stands for build your dream.

Okay.

Chinese EV manufacturer. Arguably much, much better value for money cars than Teslas are. They are Chinese. So, you know, depending on your.

Where you stand with Chinese relations and.

Their model of state capitalism.

Yeah, yeah. Then you're. It might sort of sway your argument. I should say the BYD is technically privately owned, Warren Buffett backed and it's not state owned.

But then some people would say that any kind of large company in China is heavily influenced by the state. But where would you stand on Russian cars?

Are there any. What's a brand of Russian car?

I don't know.

They used to have.

Hypothetically.

Was it. No, no.

Zephyrs aren't.

No, something with Zed.

Yeah, there was zills, but that was the, that was the, the people who made the limousines that the Communist party officials always used to ride in.

Yeah, that's what. That was my previous car.

Yeah. Because back in the 80s, you know, the Eastern European cars, the Skoda and the larder and stuff, but they weren't Russian, I don't think.

You had the Yugo, I think right.

From Yugoslavia, one would assume so.

I mean this, I bring this up as a sort of example of another fact that, that you might want to consider. If your politics is important to you,.

It's a bit of a tangled part.

Of your identity, then you need to find some way of factoring that in with your, with your sort of analysis.

I think, and I would say value put a number on it. I think like all these things, this is about, well, let's try and be honest about my utility function. Do I actually care about this? Like, if you do.

Well, you know, whether, whether that's true is not neither here nor there. But if, if you do care, then try and work out, well, how much extra am I willing to pay to avoid supporting Vladimir Putin or whatever.

Yeah, so. So Helga, for example, might want to place a value on how much he wants to support European manufacture of cars.

So he Might choose a Vauxhall or Mercedes or something built by EU workers in the eu and he might be able to put a value on how much he supports that. So his way he might do that is if. If he could buy a BYD for that will cost him £10 a day.

And he worked out the equivalent of a Mercedes was £12 a day. Is that extra £2 a day worth it for that?

That feeling kind of European economic nationalism.

Yes. Yeah.

Yeah.

Okay.

And yeah, but costing that up is the cost. Is it kind of easy to work that out? But it's like, how much do you value that? You have to dig into your soul, I think. Okay. Yeah.

Anyway, we're going to broaden it out to general decision making.

General stuff still Big stuff.

Yeah, Just stick on big stuff.

Okay.

Yeah.

Because there are specific issues about the way people think about big purchases, which probably aren't so much of a thing. With small purchases, particularly because the volume is lower, so you don't get as much feedback.

You know, you only buy a car maybe 10 times, five times in your life. So you're not getting the feedback which you do normally when you're buying tins of beans or bananas to be able to correct for those kinds of biases.

Right. And also, sadly, that's not good because also the potential impacts on your wellbeing, let's say, are bigger.

Maybe.

Yeah.

So we'll come upstairs. Although those little things add up because all those little biscuits I'm buying, I don't know when it accumulates.

Moment on the lips.

Yeah. They become a big thing.

Exactly.

So, Peter, broaden it out then.

Is that so? Big things. Yeah, we're talking about buying houses, choosing a partner, whether or not to have children.

Spreadsheet it up.

Yeah. Big purchases, changing job, moving to a different part of the world.

Okay, so big decisions, rather big purchases.

Yeah, Big decisions generally, I think. Okay, so there's a. There's a sort of. There's an interest. There's a very interesting balance between brain versus heart.

Let's call turns out literature. In the literature that 95% of purchases are driven mainly by people make big and small are made by subconscious emotional processes going. Going on.

I don't believe that for one second. My shopping basket, when I go down the supermarket, it's not things that I put there because I have an emotional attachment to them.

It's because I want to have a ham sandwich.

I don't know.

I'm not sure how. Big stuff, though. Aren't we?

Yeah, but he said 95 of all purchases.

Of all purchases, yeah. Anyway, also, let's just say that there.

Is a big emotional component.

Yeah, let's let Peter talk because actually, I honestly think. I know we do go back home for. I know we do go back and forth about this. I do think you're relatively unusual in this.

Okay, okay, go as well. But yeah, Peter, Pete.

Yeah, yeah. So a large proportion of decisions are driven by an emotional response rather than a sort of pragmatic analytical process.

And then rationalization comes afterwards. And I think perhaps where. Perhaps this. Why Nick is disagreeing is that actually what he's doing is post hoc rationalization a lot of the time.

So he'll select the Branston beans off the shelf, put them in his basket, and he's reached out and tucked those beans before. He's actually got a reason to choose those beans over the Heinz. And that was driven by an emotional response.

Well, this isn't this called. I always get it. I never remember which way around it is cognitive dissonance or.

Or always should.

Feels like it should be called cognitive assonance to me. I don't know. But it's like rationalizing it post the event.

Well, yeah, we're talking about classic system one, system two, sort of split in the brain. And so it's your system one, your fast automatic emotional system that's doing most of the work.

And then your system 2 is playing catch up and is justifying why you've done post hoc justifying why you've done certain things. But you. So there are two. Perhaps a useful way of thinking about it are there are two broad categories of decision maker. Maximizers and satisfices.

And the maximizers are all the purely analytical types.

The spreadsheet guys.

Spreadsheet guys.

Helga engineer got his spreadsheet ready.

Yeah, exactly. And the satisficers, who are the gut feel people primarily.

And I think it is the case that people broadly fit into those two cases, but the maximizers are in the minority, as the literature seems to indicate. Interestingly though, there is a measurable psychological trait which will predict whether or not you are more likely to be a system to deliberate.

This is good because I want to find out which one I am.

Yeah.

I don't know what the test. I haven't got the test to hand, but the measure itself is called the need for cognition.

And it's like, basically, how strong is your urge to think about stuff?

Yeah, here's my test. Do you like board games? Do you like puzzles?

Yeah, yeah, yeah.

If no, then you're gonna be a system.

Yeah, yeah. Nick. Nick's had this. This proxy for this for a long time. I think it's a good one.

And the need for recognition indicates, like, some people genuinely enjoy the process of deliberation and kind of working things out in a system two kind of way.

But interestingly, research suggests that maximizers actually end up less satisfied with the result because they have got all the data on the thing, all the options that they didn't take.

More things to regret not having done yet more.

More dimensions on which to regret. Whereas if you just go, right, I'm gonna go into the.

I'm gonna go and look at three, several different car show rooms, and I'm just gonna go with the one that gives me the greatest warm, fuzzy feeling, then you haven't got all this sort of baggage and memories and, like, you know, you haven't really any details about the other ones that you can then think back and go, I wish I'd gone for the blue.

Yeah. I think this is why people prefer going to restaurants where there's, like, three things on the menu than where there's 100 things on the menu.

And it's that feeling of, well, you know, people think about the opportunity cost, and if that. If it's like, well, I know I prefer the chicken to the beef, and it's chicken or beef, then I'm happy.

But if there's 10 types of chicken, then you sort of think, well, the next one down isn't going to be that much further down. Like, maybe I'd have enjoyed it more. Who knows? You know, there's always that feeling of. That feeling of potentially having missed out on something.

So. So, yeah, no, that's definitely true. That. That actually, we probably. Well, and that's quite apart from actually the.

The sort of cognitive effort that you're putting in. So there's going to be time and effort sitting there, deliberating. I mean, it's too late for Helg. He's already got his spreadsheet set up.

But, yeah, because, I mean, there's a question about.

And as you've touched on here, like, whether you can choose to be that kind of person, Whether you can just sort of go, well, today I'm gonna be a YOLO guy and I'm just gonna go for it.

I sort of do that. So if I'm going to a restaurant that I've never been to before, I have, like, different modes of decision making with restaurants. I either have.

I have the sort of.

Let me call it, like, Just feed me mode where I'm hungry and I just, I will just go with, in that case I'll just go with whatever I first pick or whatever is the special or something. Or something. I'll be guided into a decision and then I have the exploration mode where it's like I want to try something I've never tried.

The novelty seeking mode I want to try something I've never tried before. And then I will go.

I'll have sprouts in lager, please.

Yes, sprouts in lager. I'll just try something that's. Seems a bit more, more random to me that I find that those, those sort of modes help me.

Can't really do that with a car though.

No. Yeah, restaurants and things.

Yeah, but.

So there's lots, there's lots of interesting, just general decision making processes going on.

But what Another interesting finding is that the amount of effort people spend on decision and the effort, I mean in terms of gathering information about the options.

Explicit rumination.

Explicit rumination, balancing those options, building spreadsheets does not scale with the stakes of the decision in day to day decisions. So for example, people spend more time choosing a TV than they do choosing a car on average.

Well, so I was thinking about this and I think there is a.

It's actually not just, well, the bigger the purchase, the more time I need to spend thinking about it because really it's about the information that's discoverable. It might be that you can find out everything you need to know very quickly with a car or with a TV or. But you know.

And so what, but there are things like, you know, a particular house, for example, you actually, your ability to gather information about that specific house is quite limited. You know, there's the process, there's. Well, we go there and we have a look, we do a survey and so on. But if you're looking at a car, for example.

Well, cars are all the same, they're homogeneous. You can find out lots of information about the car you're going to buy by reading all the information about the other cars that are the same as it.

So I think, you know, and then you think about simple things like, well, how many dimensions is a banana got? How many things am I choosing between?

Not many, you know, so actually it's the complexity of the thing and the information available which ought to affect that as well.

And so I think to some extent it's defensible to say, well yeah, I didn't spend very much time thinking about buying a house or as much time as I spent looking at a computer. But that's because there just isn't as much information you can get.

Yeah, but I think you could still say that rational actors, you'd expect the time spent on decisions to scale kind of linearly with the size of the purchase, and that would limit. So if you were going into choose, am I buying which beans am I buying? You should spend a fraction of a second on that decision versus buying a house.

Which do I want? A house A or house B? You should probably spend months or more.

It's always beans. We should do a podcast about how to buy beans.

But that time would limit how much time you spend on finding the information rather than being driven by the information availability. Anyway, that's an interesting sort of feature of. Feature of human psychology, I think.

Look, I want to wrap us up. You might have something to wrap us up with.

Well, I've got. There are a couple more quite important things that I need to mention before you.

Absolutely.

I suppose, zooming back into what does this mean for Hell Games Health?

Sure.

Okay. Just before you do, just super quickly on this sort of, you know, the emotional sort of side of things.

I mean, I can tell you now, going back to something you said, Peter, is that, you know, you said, but the kind of person who goes into a showroom and that says, well, I'm going to do this in a rational way, or goes into a person says, I'm just going with my gut. I can tell you now, that kind of person doesn't go in thinking, I'm going to go with my gut. They just go in. And there's no preparatory phase.

They weren't even planning to buy a car that morning.

Exactly.

Yeah.

I mean, that's kind of it.

And.

And one thing, as they say in sales, you know, it's the sizzle that sells. Right. And, you know, I was trained in sales, and one of the things we were told, you don't. You don't sort of list out the facts of the thing.

You sort of build emotion. Actually talk about sensory stuff. About what? Something. I was selling conferences. And you talk about.

You paint a picture and you talk about the sounds and this. Maybe the smells. No, not exactly. But you get a person emotionally excited. Right. And then that's what sells.

But the other thing, and I think it's good advice, is if you want to go and purchase something and maybe it's a reasonably big thing or even just a jumper, is to sort of, you know, you decide, I must have that jumper. And what they say is, okay, Walk away for five minutes. And if after five minutes when you've walked away the shop, do you still want it?

Then fine, go ahead. But to remove yourself from that emotional thing which I've yet to do myself, I just want to come in with those points.

But so Nick, just round that off. I think you're right. I think the gut decision maker will walk in without the concept of I'm going to just use my gut.

But the spreadsheet guy will already have his spreadsheet almost fully populated. The only reason he goes to showroom is to fill in a few fields of data he can't get off the Internet.

Like gut feel.

Yeah.

Like one to five.

Yeah.

Like how did it. Yeah, how did it feel?

1 To 5.

And actually those people are totally impervious to the sale. The get people excited sales pitch and probably a total nightmare for salespeople. I think.

Maybe, maybe. But yeah, yeah. And the Systems two guy, whether it's one, two doesn't even know he's a system guy. Systems two guy, whatever.

System one guy.

The System one guy doesn't know he's a System one guy. Anyway, Nick, round us off and then we may have a little question. Let's see. Go for it.

Yeah, well, I'm conscious that as usual we have, we probably haven't really answered the question. But so, so a few kind of. But a few concrete things to think about. First of all, to some extent, don't, don't worry about it too much. Right.

And I say that because one thing there's the hedonic treadmill adaptation. Right. Generally. And this, this ought to make you perhaps think, well, the things that I care about probably aren't as important as I think.

So this should make you tend to not want to pay more than you otherwise might. But you know, the evidence is that people very quickly forget about all the kind of good things that they bought something for.

For example, you buy a big telly for a week, you're conscious of how exciting it is to have such a big telly and then you are literally having the same subjective experience because you adapt to the size of the screen and you are really are not any measurably better.

In some cases you're worse off because every other telly seems small.

Right, exactly. So bear that in mind. And to some extent there's the endowment effect as well, which means that you will basically learn to love your car.

You will bit like kids.

Exactly.

Get there.

Eventually you will merely through virtue of owning it, come to value it more highly. Right. So that's plenty of evidence that that's true. But concrete things, badness is much worse than goodness is good. Right.

So if there's things that actively annoy you, a particular car you're looking at, try to, you know, bear in mind that that will not offset something that seems good that you like about it, because you'll rapidly stop noticing that. But you will never. It's much less likely you're going to stop noticing the bad thing. But, but that's it. That's it really.

Apart from going, you know, the, the sort of framework we discussed earlier about, about do try and think about the annual cost or the, you know, the monthly cost or even the weekly cost and the. And set that against the weekly value.

But all I'll say, really, and I get these, wrapping up a bunch of things that we have already mentioned is just try to be ruthlessly honest about your own utility function. Now, that's where we can't tell Helga what his utility function is. But what do you actually care about?

Not what do you think you ought to care about, but what do you actually care about? Work that out. Put a number on it and make it an actual number. Put some currency values on those things.

Because one of the other things that people do with, particularly with big purchases is they think about things in terms of sort of percentages. And you shouldn't. You should still think about absolute values. So don't sort of think, oh, I'm paying 10% extra for this feature.

Think I'm paying £4,000 extra for this feature. Is it worth it? Yeah, that's it, really.

And I've got one more thing to worry about. Not wanting to steer us.

Well, one more thing to consider when you're making this decision, not wanting to steer us even further away from the question of which car should he buy. I'm going to do so anyway. But are you asking the right question in the first place? Are you in danger of being overly narrow in the framing of this?

So maybe the question isn't what car should I buy? It's rather should I buy a car?

Well, yes, how should I satisfy my transport needs?

Yes, how should I. Transport needs? Exactly. So there are other options. You don't have to buy a car. You don't have to own the car.

You can get a bicycle, you lazy.

You could get a bicycle. You could lease a car. You could use a sort of car collective type thing. There are lots of options. So, yeah, maybe that.

Yeah, derailing the question even further.

Okay, look, so we'll stop there. Okay, I think we should release two versions of this episode for Helga. And one's going to say answer one and the other one's going to say answer two.

We've just recorded answer one. Okay, there we go. I hope that helps, Helga. Okay, now you're listening to answer two. Okay, Helga, don't worry. Have fun.

Don't think about it too much and buy a Jaguar xjs. It's made me happy. And if you like that classic, you buy phrases. Yeah, well. And if you like that classic British 70s styling.

And who doesn't?

And who doesn't. Quite a decade and I can sort you out, Helga. I've got one that's going cheap and some more or less careful owners that it's had. Right.

More or less roadworthy.

So we'll stop there. Hope that was useful to you, Helga.

You've been listening to the Cognitive Engineering podcast brought to you by Aleph Insights and produced by me, Fraser McGruer. If you haven't already, please like and subscribe. We try and release an episode every week or two.

If there are any topics that you'd like us to cover, please email us at podcast@lephinsights.com thanks as always, for listening. Until next time, goodbye.