The (Negative) Marginal Value of Overthinking

I don’t make my bed. I completed the analysis years ago and the results showed that for me it is not worth it. I’m sorry Jordan Peterson. I’m sorry to my roommates who have requested I close my bedroom door so that the ‘bad energies’ don’t spread throughout the house. The effort taken is not worth the benefit of my room looking in order, especially seeing as I will mess it up again in a matter of hours.

This is not a decision I make every day, ruminating over while I stare at the bed as a microcosm of the disarray of my life. I’ve done the analysis; I don’t need to do it again.

Farmers make many more important decisions in a range of areas: some scientific, some financial and some management related. They require a lot of information to make the best decisions. Therefore, this information has value. There is a point, however, where the cost of new information or additional analysis is not worth the additional value. We call this additional value of a single piece of information its marginal value.

Do we think of this marginal value of analysis when looking at aspects of our own lives? While I think my level of analysis for the (lack of) making my own bed is spot on, there are many instances of both over- and under-analysis.

The agonisation from agonising

I’m lying in bed, having read to the point of feeling sufficiently sleepy. I might even get my eight hours tonight. But no, my brain now decides to dredge up cringe-inducing memories for further analysis:

“Remember that time when you sang a poem about World War II to the tune of Norman Greenbaum’s ‘Spirit in the Sky’ in year 10 history class?

Or maybe that penalty you missed in the KDSA Division 3 Reserves 2018 Grand Final.”

This level of over-analysis has a negative marginal value; it makes me focus on regretful experiences and prevents me from sleeping. Plus, I have vowed to never take a penalty again so will not need to make that decision of where to kick them ever again.

Analysis has become a huge part of elite sport and has added considerable value through improving performance, but coaches are aware of the risk of going too far. Let’s say, hypothetically, the Giants beat the Bombers by 100 points this weekend. The press conference with the losing coach would probably go something like this:

Journalist: “What went wrong out there today coach?”

Coach: “Honestly at this stage I don’t know. I thought the boys were up for the contest before the game, but obviously I was wrong because what we dished up today wasn’t good enough.”

Journalist: “What will the review of the game look like then?”

Coach: “I think that performance was an aberration, so we want to take the learnings from it that we can and move on. That’s the beauty of football, there’s always next week to atone for a poor performance.”

Dwelling on when we screw up, or have our own aberrations in coach-speak, can be more harmful than good. The next time we have that experience we will be likely to only be thinking about the mistakes we made and that we are doomed to repeat them. We call this phenomenon diminishing marginal returns: for every extra piece of analysis we do, the value gets smaller and smaller until eventually it goes to zero and then turns negative.

Sweat the big stuff

While over-analysis is often related to the trivial, under-analysis is more relevant for the important things. Looking back, the decision to go to university straight after school was made quite hastily, and partly because that was what everyone else did. Not many of us at eighteen know what path we want to take in our careers. Shouldn’t we gather more information by trying different things after school? The marginal value of this information gathering process would be very high, as that decision not only shapes what you will be studying for three years but influences where you will work for potentially thirty plus years.

Different services exist for the big decisions. For example, financial advisors for big investment decisions, psychologists for ‘happiness’ decisions, nutritionists for diet decisions and many more. They exist because the marginal value of their expertise in specific decisions is so high that it makes the cost of them worth it.

We make so many decisions in our lives that going through the analysis for all of them is impossible. Maybe we should transfer some of our analysis ‘budget’ from the small stuff to the big things.

One thought on “The (Negative) Marginal Value of Overthinking

  1. Nice one Brendan… Making my bed, for me, is a lead indicator to my state of mental wellbeing. When I’m good, I make my bed everyday. When I’m not so good, I don’t. The feeling of ‘I can’t be bothered making the bed today’ is a first sign for me that I need to go something to get myself firing again… and making the bed is a great first state 🙂

    I love the insight of over analysis on the little things and under analysis on the big things. I too would not go straight to Uni after high school again. I wold definitely take time off to get some life experience and really think about what I want to invest multiple years of my life into – what do I want to learn and what do I want to do with that learning? What do I love to do? What am I at my best? Why? How can I use those reflection to get some insight into what to study, why, and what would do with it all at the end?

    I wonder if there’s a connect between reflection and learning as an antidote of over and under analysis?

    Liked by 1 person

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