From Intuition to Insolvency: Intuitive Decision Makers End up More Financial Constrained

People shape their lives through the decisions that they make. Whether these choices produce beneficial or detrimental outcomes for the decision maker largely depends on the decision process itself. Therefore, how people approach decisions, and not just what they choose, has important consequences. Broadly speaking, people can approach decisions in two ways (e.g., Kahneman, 2003; 2011; Sloman, 1996): through careful deliberation (using logic, reason, and rational considerations) and/or by relying on their intuitions (going with their “gut feelings”). Poets, philosophers, and scholars have long debated the relative merits of human deliberation vs. intuitions. This debate has raged on in the social sciences, particularly among decision researchers, with some arguing that intuitions alone generally lead to suboptimal choices (Baron, 1998; Gilovich, Griffin, & Kahneman, 2002; Kmett, Arkes, & Jones, 1999), while others have defended the merits of intuitions and questioned the value of deliberation (Dijksterhuis, Bos, Nordgren, & van Baaren, 2006; Dijksterhuis & Nordgren, 2006; Wilson et al., 1993; Wilson & Schooler, 1991). Far from abating, this ongoing debate about intuitions has received renewed attention from researchers and spilt out of academic circles and onto the public sphere (e.g., Gigerenzer, 2007; Gilovich, 1991; Gladwell, 2005; Groopman, 2007; Kahneman, 2011; Myers, 2002).