https://www.economist.com/node/21801553?fsrc=rss%7Cbus
“HAVE A BREAK” is a slogan associated with the popular chocolate snack, KitKat. But it may be pretty good advice for any manager or worker, minus the calories. The longer the shift, the less effective the employee may become.
In a new paper for Royal Society Open Finance, “Quantifying the cost of decision fatigue: suboptimal risk decisions in finance”, Tobias Baer and Simone Schnall examine the credit decisions of loan officers at a leading bank over the course of their working day. The academics write that decision fatigue “typically involves a tendency to revert to the ‘default’ option, namely whatever choice involves relatively little mental effort”. In other words, as you become tired, you get mentally lazy.
The study looked at proposals to restructure loans, with each credit officer analysing 46 requests per day. The approval rate was around 40%, so the default decision was rejection. Officers tended to start work between 8am and 10am, took lunch between 1pm and 3pm, and tended to leave at 6pm.
The researchers found that the approval rate declined significantly between 11am and 2pm, as lunch approached, then picked up again after 3pm before declining in the last two hours of work. The applications were distributed to credit officers by the bank’s automated system, so they were in…
