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Decision Frameworks

Consequences Considering Human Behavior Framework

A decision framework that prompts analysis of human behavior, incentives, biases, and environmental factors to predict consequences and design systems aligning with goals.

THE IDEA

WHAT ARE THE LIKELY CONSEQUENCES CONSIDERING HUMAN BEHAVIOR?

What is causing me to do this?

  • What are my present environment and my state of mind?
  • What is rewarding for me to do/say if I want to avoid pain?
  • What do I perceive to be the consequences for me? Are they painful or pleasurable?
  • What psychological tendencies will influence me? Are they likely to cause a misjudgment?

What is the context?

  • What are the environment and the participants like, including the size of the group?
  • Who is the decision-maker and what are his criteria for making decisions?
  • Who benefits and who pays?
  • Who is responsible for the outcome?
  • Who and what are influencing the participant's perception of reality?

Can I judge him?

  • Can I judge his character? What are his experiences?
  • What temporary or permanent characteristics influence him (age, cultural background, health, mood...)?
  • What environmental (present internal and external) or situational factors influence him?
  • Does he want to sell me something?

What is in his self-interest to do?

  • What is logical for him to do?
  • What is rewarding for him to do if he wants to avoid pain?
  • What does he perceive as painful? What does he fear and why?
  • What does he want more of or what does he not want to be taken away?
  • What "resources" motivate him? His health, job, family, position, reputation, status, power?
  • What would give him an incentive or disincentive?
  • What reward or penalty system causes his behavior?
  • What is he rewarded (perceived) for doing? What is he punished (perceived) for doing?
  • How is he measured?
  • How does he perceive the consequences of failing to achieve the goal? Is it to his advantage/interest to believe (or not to believe) something?

What are the psychological tendencies and shortcuts that influence him and can cause misjudgment?

  • What bias affects his conclusions?
  • What external influences are there that will likely influence him?
  • What temptations are there that appeal to his self-interest?
  • What activates his behavior?

What are the consequences?

  • What are the consequences for me? Will my goal still be achieved?
  • Is what is rewarding for him also rewarding for me?
  • Is the system set up so that the relevant participant's interest coincides with my goal?
  • Does it "pay him" to make the wrong decision?
  • Does he understand the consequences of his behavior?
  • What are the short- and long-term consequences for him?
  • What are the lines of responsibility?
  • Does he have the responsibility for the consequences?
  • What happens when others do the same?

What system would I like to have if the roles were reversed?

  • How would I like to be treated if the roles were reversed?
  • What would cause me to do the things I want him to do?
  • What are the behavioral tendencies I can use to change his behavior?
  • What actions would make the goal fail?
  • Which of those actions can I avoid?

Is this the right system?

  • Can I appeal to his self-interest?
  • Can I appeal to fear of losing reputation, money, status, family...?
  • Can I change his present associations to pain?
  • How can I organize the system to minimize certain influences?
  • Have I told him what I expect?
  • Have I inspected what is done?
  • Have I supported things done well?
  • Does he have the necessary skills, knowledge and the relevant information?
  • Does he know what is expected of him?
  • Does he know the goal, how he will reach it and why that is the best path?
  • Can he measure his progress? Is it related to his daily activities?
  • Does he have the responsibility and the authority?
  • Is his reward aligned with the goal?
  • What rules can I install that will consider human weaknesses?
  • Can I install a reverse rule?
  • What changes must be made? Who will call for them? How likely is that?
  • What are his values? His goals?
  • What does he consider a result?
  • What is his perception of the consequences if he behaves like we want him to and if he doesn't?

When to use it

  • Evaluating why a business proposal failed to gain support from stakeholders despite logical merits.

  • Designing a public health campaign that accounts for cognitive biases like present bias and social norms.

  • Analyzing a team's low productivity by examining each member's perceived rewards and punishments.

  • Negotiating a contract by anticipating the other party's self-interest and potential biases to create win-win terms.

FROM THEORY TO EVERYDAY LIFE

In practice

01

Designing a Team Incentive System

A manager uses this framework to analyze why team members might not meet targets. By examining self-interest, reward structures, and cognitive biases (e.g., overconfidence, loss aversion), the manager redesigns incentives to align individual rewards with team goals, ensuring that what is rewarding for each member also benefits the collective outcome.

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A MOMENT TO REFLECT

Put it to work.

  1. Think of a recent decision where the outcome was unexpected. Using the questions in this framework, what human behavior factors might you have missed?

  2. Consider a situation where someone acted against their own stated interests. What incentives or biases could explain their behavior?

  3. How would you redesign a system you are part of (e.g., workplace, family) to better align individual self-interest with desired goals?

CONTINUE THE CONVERSATION

Source texts

  • Seeking Wisdom From Darwin to Munger (Peter Bevelin)
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