Summary.
The human brain likes simple straight lines. As a result, people tend to expect that relationships between variables and outcomes will be linear. Often, this is the case: The amount of data an iPad will hold increases at the same rate as its storage
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Test yourself with this word problem: Imagine you’re responsible for your company’s car fleet. 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. You have enough capital to replace one model with more-fuel-efficient vehicles to lower operational costs and help meet sustainability goals.
Read more on Decision making and problem solving or related topic Psychology
A version of this article appeared in the May–June 2017 issue of Harvard Business Review.
BLSPStefano Puntoni is a professor of marketing at the Wharton School, University of Pennsylvania, and the co-author of Decision-Driven Analytics: Leveraging Human Intelligence to Unlock the Power of Data (Wharton Press).
