In our normal day-to-day lives, we, both as people and consumers, make tons and tons of decisions. Some of them come naturally to us, like, “should I stop at the red signal?” or “should I turn off the TV before I leave the house?” Others, however, require a little bit more thought process behind them. Understanding how people arrive at their choices/decisions is an area that has received a lot of attention. Theories have been generated to explain how people make decisions, and what types of factors influence decision making in the present and future.
There are several factors that also influence decision making. These may include “past experiences, cognitive biases, age and individual differences, belief in personal relevance, and an escalation of commitment” (Dietrich, n.d.). Understanding these factors may help us understand their impact on the decision’s outcome.
One of the recent, most significant, decision making process that went awry for me was related to the car that I currently drive. About three years ago, my wife and I decided to purchase a new car. However, like most people, we were immediately faced with a tough choice of weather to finance or lease our purchase. Not having had an opportunity to purchase a brand new car in the past, I lacked the proper knowledge behind the concept of leasing a car. Historically I only had an option of financing, or right out buying the used car.
In a typical decision making process there are five general steps; identify your goal, gather information for weighing your options, consider the consequences, make your decision, and evaluate your decision (Gray, 2011). In my particular scenario, my goal was clearly defined as to buy a new Audi A4 Sedan, while finding the most cost effective solution. The next step was to gather information about leasing and financing. I had a basic understanding about leasing; however, I