Why Bad Decisions Are Made

No denying the fact that bad decisions are as much a part of life as are good decisions, however, every one of us tries to minimize the bad decisions and increase the number of good decisions as the former do not bring joy, happiness or success in our lives.


Despite our best efforts, we keep on committing mistakes and make bad decisions. To me there are two major reasons why most of us make bad decisions and the strange thing is that while making a bad decision we think that we are making a good decision. In the lines below, I shall discuss with you the two domains in which we aren’t able to figure out things properly as a result of which we make bad decisions.


Why Bad Decisions Are MadeError in Estimating Odds:


Majority of our decisions are based on estimation of odds. We are presented with options and among them we select the ones to which the odds favor. However, it’s the estimation of odds in which we make mistake and which results in a bad decision. Pertaining to estimation of odds the biggest mistake made by us is that we rely on the information that comes quickly or easily to our minds. For instance, if you were asked whether terrorism was more devastating than poverty, then your answer would be that terrorism is more devastating than poverty without knowing the fact that poverty causes much more deaths compared to terrorism. The major reason why you would decide for such odds is because terrorism is highly portrayed in the media and your mind has more information on terrorism available compared to poverty. Thus, in estimating odds, we tend to rely and focus on the obvious one, whilst ignoring the real facts, which we don’t know about. Hence, in order to remove the error in estimation of odds, the need is to understand the problem and the choices at a holistic level and decide upon it, instead of relying what comes to the mind about the choices.


Why Bad Decisions Are MadeError In Estimation of Value:


The other major reason why we make bad decisions is the error in estimation of value. With all our decisions and the constituent choices, we estimate some value, therefore, when we commit mistake in estimating the right value, our decision becomes bad consequently. There are a number of factors that impact the value we associate with choices in making decisions.


The first factor that affects the estimation of value is the situation in which the option is presented. For instance, the price paid for a burger under normal circumstances will have different value for you compared to the value of the same price, which you will pay for the burger when there is no other burger left on the surface of the earth.


The second factor that affects the estimation of value is the comparison. Consider the value which the price for the burger has for you under normal circumstances and then compare the value of the same price paid in a third world country to enjoy an exquisite meal. Therefore, when there is comparison between two things, we tend to make mistake and prefer which apparently seems beneficial.


The third factor that effects the estimation of value is the time. The kind of value which eating of burger has for you at the time of lunch won’t be the same if you are offered to have a burger after dinner. Thus, people because of not knowing the difference between the two, estimate the wrong value and make the wrong decision.


Therefore, a combination of error in estimation of value and odds is what makes us make bad decisions.


Now it’s Your Turn!


Do you have anything to add to the reasons why we make bad decisions? Have you ever estimated the value and odds wrong and committed a bad decision? I look forward to reading your experiences in the comments section.


To your Success,

Nate Leung

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Nate Leung

Nate Leung

CEO & Founder - Automated Profit Method
Hi, I'm Nate! I am the CEO and Founder of NateLeung.com, and Automated Profit Method, Author of "Virtual Entrepreneur: Live Free With the Business of Your Dreams". I help ambitious online entrepreneurs build wildly successful businesses that they are most passionate about. Step by step I show you how to build a business from scratch with the right strategies and systems in place, you can earn the income you know you deserve and have the kind of life you have always dreamed about. Ready for your business to support the kind of life you want to have? Contact Nate here.
Nate Leung
Nate Leung

Add a Comment

44 Responses to “Why Bad Decisions Are Made”

  1. Ryan Biddulph

    That terrorism vs poverty deal is striking Nate!

    Wow…more have starved and died through being poor than any other problem in human history.

    Look at Africa. Stunning, that so many die for lack of food. All because of not learning and applying certain principles, and being born into poverty conscious environments.

    Thanks for sharing!

  2. Denise Pattton

    As humans we generally cannot help bringing emotion into every descision we make, hence the old addage to err is human.

    Now if we could train our minds to operate like computers ….

    Actually, I did try that once and the outcome wasn’t good so please don’t try this at home. x

    Great post Nate … thanks xxx

  3. Nwosu Desmond

    you have rightly explained why we make bad decisions and i hope i can be able to make better choices next time especially now that i have been equipped with this article.

  4. frank joseph

    I have made dangerous mistakes in the past and sometime i still do 😀
    I guess it human nature.

  5. Tom Holmberg

    Mine is misinterpreting the duration of market trends. I made a couple mistakes thinking things will continue to get better

    • Nate Leung

      That is the right perspective to have, Tom. Great outlook!

  6. Dov Shapira

    We are making decisions all day long.
    When it comes to making decisions some emotions come to play such as greed and fear.

    • Nate Leung

      Very true Dov! Thank you for the comments!

  7. Irene

    Well definitely can say I have had situations turn out differently that what I had thought but can’t say they were from bad decisions. I can say they were from decisions that I thought were proper at the time and later they became great learning lessons.

  8. Veronica

    Maybe if you are a natural born risk taker or an impulsive personality……like getting married In Vegas level 🙂

    • Nate Leung

      LOL. Getting married on the fly is always a great way to be spontaneous!

  9. Maggie Owens

    Great post Nate. I’ve made plenty a bad decision in my life. Several times not looking at a situation and getting more facts and not taking the time to make the decision has ended up badly. However, hopefully we learn from it and don’t have to repeat it again.

    • Nate Leung

      Sometimes “bad” decisions cannot be avoided. Just go through the process, learn and grow from the experience. 🙂

  10. Jeff Brand

    I have to say that I don’t look at my decisions that way, but do try and learn from the bad ones!

    • Nate Leung

      That is right perspective on how to look at “bad” decisions. You make the decision and learn from it. 🙂

  11. Stephanie Clopton

    What great information. I’ve booked marked this to check it out when I have a bit more time. Thank you for sharing.

    • Nate Leung

      You’re welcome Stephanie! Glad you got value. 🙂

  12. Jim Striegel

    I never thought of decisions being based on an estimation of odds. Great info here!

  13. Meli Horowitz

    Although I essentially agree with what you’ve posted, I can’t say that I agree with referring to them as “bad decisions”. They were made based on the understanding of the information the person had at that time. They are actually “learning experiences” or as a friend recently informed me “AFGO”.

  14. Amira Muhammad

    great info!!

    • Nate Leung

      Thanks Amira! Feel free to stop by anytime. 🙂

  15. Jo Casey

    Great advice – we all make mistakes but the trick is to learn from them (or from other people’s experiences) so that we don’t repeat them.

  16. Robert

    Good one here! We definitely try to minimize our bad decisions, to a fault, but we wont know they are bad until the bad actually happens..

  17. Andrea

    Hi Nate. I’m not sure I would agree that there are any bad decisions! Just opportunities to further refine and enhance what you will do next time. Learning opportunities for what we don’t like. Nobody deliberately does something ‘wrong’, we just make the best choices we can with the information, time and knowledge we have available to us at that time. I might look back at a decision I’ve made and wish I hadn’t done it, but at least I wouldn’t make that same decision again, so I’ve gained a bit of extra knowledge I didn’t have before…

    • Nate Leung

      Sometimes, you just have to look at a “decision” from a different perspective. Sometimes decisions do not work out for the better. In the end, is what you learned from that decision is what matters. 🙂

  18. Monna Ellithorpe

    Hi Nate,

    Great post. I have to admit that a lot of my bad decisions were made because of my want, instead of thinking more of the need or value. It is a hard habit to break but I am working on it.

    Thank you for such a great post to think about.

    Have a great day. Monna

  19. Candess M. Campbell, PhD

    Interesting subject Nate. When I think of making bad decisions I think it is often because of being in a hurry and not taking the time to think it through and also getting caught up in the “charge” of others, for instance being in a group where there is high pressure. On the other hand, I it seems we learn from all decisions, so there are really few truly bad decisions.

    I signed up for your MLM Scripts. Thanks! I am a student of Brendon Burchard and Jeff Walker. Now I get to hear your wisdom!

    • Nate Leung

      Awesome Candess. I would love to hear your feedback!

  20. Lynda Lippin

    Sometimes the issue is other people and how they either influence or react to a decision. Decisions only become good or bad when we judge them after the fact. I tend to go with my gut!

    • Nate Leung

      Sometimes that’s all you can do is trust your gut feeling!

  21. Krystal

    Pretty thought provoking post. I spend a lot of time weighing the pros and cons before making a major decision, but that time could be better spent. I’m always impressed with your daily posts that are always inspirational!

    • Nate Leung

      Awe, thank you Krystal! Much appreciated! 🙂

  22. Esha

    I reckon I might have made a few mistakes in estimation of value, will be more careful in future, learnt from the past. Emotions can also impact our decision making ability and we might falter taking one when we are too sentimental.

    • Nate Leung

      I think we all have experienced that in one way or another. Yes, emotions do play a vital role in our decision making process. Thank you Esha!

  23. Krystle

    Great post Nate. I have made made estimations of value and I believe we all have. It just initiates that we don’t have the knowledge needed to put value on something. I feel if we just educate ourselves a little bit more it will save time on the assumptions we make. Great value that you shared!

  24. Steve Clausell

    Hey Nate…Excellent post. Most people in this day and time make bad decisions from an emotional stand point: buying a car/house that they know they can’t afford..but they buy it anyway because the become emotionally attached to it. I’m learning to ponder my steps before I make a decision.

    Thanks for opening up this topic of conversation.

    Thanks for the post sir!

    I’ll share this

    Steve Clausell

    • Nate Leung

      You betcha Steve! I can always appreciate you coming on here and sharing your feedback! 🙂

  25. Emmanuel

    Now it’s my turn? The truth of the matter I have nothing to add as the post said it all.

    In my quest of not making those bad decisions I have being doing, it will be prudent for me to remember these.

    Thanks for this great post.