Consider your job is to maintain a car fleet for your company. You manage two models, an SUV that gets 10 miles to the gallon and a sedan that gets 20. The fleet has equal numbers of each, and all the cars travel 10,000 miles a year. Your company have enough capital to replace one model with more fuel-efficient vehicles to lower operational costs and help meet sustainability goals.
Which upgrade is better?
A. Replacing the 10 MPG vehicles with 20 MPG vehicles
B. Replacing the 20 MPG vehicles with 50 MPG vehicles
Option B seems more impressive—an increase of 30 MPG is a lot larger than a 10 MPG one. And the percentage increase is greater, too. Right? Let’s compare.
| GALLONS USED PER 10,000 MILES | |||
| CURRENT | AFTER UPGRADE | SAVINGS | |
| A. | 1,000 (@10 MPG) | 500 (@20 MPG) | 500 |
| B. | 500 (@20 MPG) | 200 (@50 MPG) | 300 |
See B is not the better deal. What is this?! Is this a joke? Now let's take a deep dive into this concept.
Decades of research in cognitive psychology show that the human mind struggles to understand nonlinear relationships. Our brain wants to make simple straight lines. In many situations, that kind of thinking serves us well: If you can store 50 books on a shelf, you can store 100 books if you add another shelf, and 150 books if you add yet another. Similarly, if the price of coffee is $2, you can buy five coffees for $10, 10 coffees with $20, and 15 coffees with $30.
But in real life, this is not the case. Our brain turns everything around us into its own convenient way of understanding it. that's why we all choose option B instead of A. When we make decisions without analysing the inputs and outcomes this happens.
So it is up to you when making such a kind of choice, think about the outcome. Start to analyse the situation in a non-linear way by taking all the factors into account. Try to improve your non-leniar thinking by rediscovering the world around you.