Olin’s Hannah Perfecto studies the psychology of decision-making

Every day we make thousands of decisions, from the small—what to eat? what to wear?—to the potentially life-changing decisions involving our health or financial future.

Hannah Perfecto, a consumer behavior psychologist at Olin Business School, studies the juncture of judgment and decision-making and says it doesn’t have to be so hard—even as most of the daily decisions we make can be dull and monotonous.

“Most of the time we’re not that enthused by the options we’re facing,” she says. “When you’re deciding what to eat, for example, you’re typically not deciding which fancy high-end restaurant to go to, but which TV dinner in the freezer to heat up or what you can throw together from leftovers.”

‘Which one do I not want?’

Perfecto says we can feel better about the process by reframing it in a negative manner, which may seem counterintuitive. “Which one do I not want? Which dinner do I want to leave in the freezer?

“We’re learning that when when people match how positive or negative the options are with how positively or negatively they think about that decision, they feel a lot better about the outcome,” Perfecto says. “Or they make the decision faster, find the decision easier to make and more confident they made the right one.”

It’s a small change, but Perfecto says that even with small changes dramatic shifts can be seen in how people feel about an outcome. And when people feel better, “they change, they influence, they act.” 

Perfecto does the bulk of her research in what she calls “small data land” as opposed to “big data” — an area in which many companies feel most comfortable, analyzing the electronic movements taken during a typical day. 

“Big data is purely passive,” she says. “You can observe patterns, and you can see what might be happening, but you don’t know why it’s happening.

The why, she says, can be discovered by doing experiments on decision-making and gathering those nuggets of information that make small data so compelling. “Changing one minor variable on a question, and then watching what changes might have come of that — and then following up on what motivated a study participant to give the answers they did,” she says. “We try to figure out a consumer’s thought process in order to help companies make a better advertisement or a government agency produce a better public service announcement.

“We want people to make better choices,” she says.

The why of decision-making

The why of decision-making has been a passion for Perfecto since she was in high school and knew she wanted to study human behavior. “It was the time when a lot of these pop psychology books, like ‘Freakonomics’ and ‘Nudge,’ were using data to answer questions about how people are behaving on a large scale,” she says. “That was fascinating to me.”

After completing undergraduate studies at Yale University, she went west to the University of California at Berkely, where she earned both a master’s and a PhD in business administration. She has been a faculty member and researcher at WashU since 2017, teaching market research and continuing research in consumer behavior, behavioral decision theory, metacognition and research replicability and reliability.

All “niche” fields, as Perfecto says, and a field of study in which, when she was a young undergraduate, was not populated by many women. But Perfecto recalls one professor who had an impact on the way she viewed both her subject matter and her teaching: Teresa Treat (who is now at the University of Iowa) who taught statistics for psychology.

“I was taken back by her enthusiasm, deep knowledge and expertise of the subject,” Perfecto says of Treat. “She was very confident in her knowledge, and was excited to share these nuggets of expertise with us. I never forgot that.”

It’s an enthusiasm she channels in her teaching such concepts as statistical models to undergraduates at Olin, especially young women. “The last few semesters I’ve had a few young women reach out to me and tell me I made them feel as if it’s OK to be kind of nerdy about a geeky topic like statistics,” she laughs. “Since I’m clearly a nerd, and I seem to be doing all right.”

Leslie Gibson McCarthy, executive digital storyteller in University Marketing & Communications, originally wrote this blog post for The Source. Graphic: Monica Duwel/Washington University