Deciding on Housing for Next Year

It's October. You haven't even experienced 2 full months of living with your current housemates/roommates and you, just like the rest of the student population on campus, have to decide where you will be signing next year's lease. The scramble to find the "perfect" home can be stressful and in some cases, detrimental to existing friendships: someone ditches their housing group for another, one person has to leave the group because they are more price-sensitive compared to the rest of the group, etc. But why does trying to decide on your next home have to be so hard?

There are 3 assumptions about humans for classic rational thinking:
1. Perfect knowledge
2. Substitutes are equally weighed
3. Choosing the option that provides maximum outcome or gain

It seems pretty unrealistic to say that humans have the mental capabilities to validate the 3 assumptions above. Let's go back to our housing scenario. Housing decisions in Ann Arbor generally must be made with limited time to prospect and sign, in addition to uncertainties in who you'll be living with and many uncertainties in how compatible they will be for you to live with.

There are so many real estate options available that it's impossible to have perfect knowledge of every single housing option in Ann Arbor. The monthly rent and utilities, location, amenities and aesthetic characteristics of a future home vary immensely between properties, making it incredibly difficult to substitute and weigh trade-offs in a timely manner. Lastly, humans are motivated by many different needs and desires besides maximizing the expected value or gain therefore making the classic rational thinking theory invalid for the adaptive information-processing and cultural human being.

We rely on heuristics and our cognitive maps to be able to make the best decision we can while under pressure for time and ambiguity.

The anchoring heuristic, if used purposefully, can be a great advantage when looking at the price range of a home. Share with your other housemates that you are hoping to find a home with a low monthly rent price (a price you are more than comfortable paying for) and make incremental increases to avoid signing a lease payment that was originally outside of your price range.

On the flip side, be careful of the availability heuristic when consulting with other friends where you should look at housing! What if before deciding to go on an apartment tour, you hear from a classmate that this particular apartment had "too strict of management rules" but in reality, that friend was breaking all the property rules and attributing their behavior incorrectly? You shouldn't decide to not meet the management team in person and go on the tour based off of what they said earlier because you just might be missing out on a great new home!

Switching gears, our cognitive maps are also a great tool to make decisions quickly. Since these maps are based on our own past experiences we can narrow down all the housing options available to us to a much shorter list of top 10 homes we have visited in the past and liked. However, it's possible that a floor plan of a potential home reminds you of a similar floor plan of your ex-significant other's home... and this codes a negative emotional response within your cognitive map, thus signaling you to not pursue the home even though it satisfies everything else you hoped to find in a future home.

This again shows how unequal and unrealistic it is to have equally substitutable factors with intentions to maximize one's gain.

Let's go further into how our adaptive rational decision making skills are used. What if your decision is not based on just solely the amenities, the location, the price, or the design of the home? It's possible that you could be motivated to make an "unrational" final decision based on your best friend and future housemate's preferences even though you may be more price-sensitive or prefer a different home instead. This is called altruism - you want to help your friend out even if you do not gain anything from doing so. Another "unrational" decision that you may be motivated to make comes from our need to explore the unknown and take risks by leaving our safe and familiar environments so you could be choosing to move in with complete strangers! What would it be like to live in a co-op? Perhaps a studio apartment by yourself? And perhaps, less likely, one is motivated to search for homes like it's a game; it's busy season for the real estate market and because it's in our nature to be competitive, one may be in the housing game to get the best deals and options out of the U of M student population.

So far, we have assumed that while we make these sorts of decisions, we have maximum directed attention. If we did not and faced directed attention fatigue (DAF), we could risk jumping to conclusions and singing on a house that we haven't thought through enough just for the sake of getting the housing search over with. Not just that, we could be putting ourselves in a position that brings out the incivility in us by not listening to other members, or getting catty and dramatic since the situation is already stressful enough!

With all this being said, it's important for us to be aware of the advantages that come from our heuristics if we do not let biases overcome them. But that leaves me to ask you this: if we are rational thinkers and have the cognitive processes to make adaptive rational decisions, why do we still conjure up that "gut" feeling to make the most important decisions in our lives? How do we know in our gut that we love this person enough to marry them, that this is the perfect house for us, etc.? And is it more efficient for us to forego our rational thinking mechanisms and just go with our gut?