Elevator Button Controls

23rd September 2019

Door Close Button Placebo

How many of us have pushed the “Door Close” button on the elevator thinking it closed the door faster? Interestingly that button on most elevators is a placebo. It does not actually close the door faster. The sole purpose is to help impatient people have a better experience by giving them the illusion of control. Riders get to hit something to reduce stress without harming late drivers. In addition, the doors will eventually close, so they get a feeling of accomplishment as well. Thus, our mental health is preserved without us knowing it was even influenced.

It is interesting to learn ways our minds are subconsciously influenced. This elevator example reminds me of Daniel Kahneman’s (Nobel Prize in Economic Sciences) work on decision making and the way our minds think. His book Thinking, Fast and Slow breaks thinking into two systems: System 1 and System 2. As he describes it, System 1 does the 2 plus 2 math. The quick, automatic, and effortless thinking. System 2 does the 17 times 24 math. The slower, more deliberate, and analytical thinking.

Using this knowledge, we can go back to the elevator button scenario. The “Door Close” is meant to satisfy our System 1 thinking. Quick action that helps satisfy our immediate concerns. You push the button, the door eventually closes and you don’t question where there was an actual cause and effect. System 2 would take a different approach. It might do a test to see if there was actual cause and effect. It might analyze the actual speed of the door closing with or without pushing the button. System 2 would take much longer to arrive at an answer, but ultimately it would be more accurate.

What I like about Kahneman’s work the most is the humbleness in which he presents the information. It would be easy for him to say that because of his research, he is able to influence his mind in much better ways than the rest of us. However, he doesn’t. Rather he states the opposite. He says even though he wrote the book, it didn’t improve his mind. He is still prone to the same mistakes. The only advantage is his ability to recognize situations in which errors are more prone to occur.

Investing System and “Door Close” Buttons

We know that our minds are flooded daily with information. Most of the information is also trying to market to our System 1 thinking. “President Trump tweeted, so buy this, sell that!” “Don’t delay or it will be gone!” Not to say that System 1 is bad. For everyday decisions with lesser long-term impact, System 1 works great. You need it to survive the many decisions you make in a day. Intuition and experiences are quickly recalled with System 1.

However, longer-term, high-impact decisions should be engaged by System 2. We must be careful not to let System 1 run rampant. As Kahneman figured out, we need to recognize situations where System 1 intuition errors are prone to happen. We can’t turn off the System 1 thoughts. We can only slow our reaction to them. That’s where our own personal “Door Close” button comes into play. We recognize where intuition might not be the right choice. We hit the button to slow things down. Like the elevator button, this doesn’t actually do anything. However, it gives us back the illusion of control by giving System 2 a chance to verify.

Here’s a quick example of this playing out to help illustrate: The media reports that the Federal Reserve is going to lower interest rates. Your friends are encouraging you to sell something in your portfolio specifically because of this report. This is where your System 2 should be notified to step in and take over for System 1. Push the button. We are fortunate to work with a wonderful group of clients. We have learned many things over the years by listening to your stories. For example, here are a few ways in which we have had people indirectly push the system 2 button over the years:

  • I turn off the computer
  • I change the TV channel
  • I walk the dog
  • I excuse myself from the conversation
  • I call McCarthy Grittinger Financial Group

Takeaway

As Daniel Kahneman says, we cannot completely change the wiring in our minds. We can only hope to be more aware of it. As we continue to move through the latter half of 2019, let’s all try to remain vigilant about what our System 1 and System 2 are saying. This is not to say that our decision-making process cannot or should not change. It can. However, let’s make sure we take the right approach and are not overtaken by our quick intuition. Enjoy your elevator travels!

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