The Decision Wobegon Effect


In his book The Most Human Human, Brian Christian discussed what Baba Shiv of the Stanford Graduate School of Business called the decision dilemma, “where there is no objectively best choice, where there are simply a number of subjective variables with trade-offs between them. The nature of the situation is such that additional information probably won’t even help. In these cases - consider the parable of the donkey that, halfway between two bales of hay and unable to decide which way to walk, starves to death - what we want, more than to be correct, is to be satisfied with our choice (and out of the dilemma).”

A cognitive bias formally called illusory superiority is sometimes known as the above average effect or the Lake Wobegon Effect named after Garrison Keillor’s fictional town where “all the women are strong, all the men are good looking, and all the children are above average.”

The non-fictional world of business decision-making sometimes seems like its corporate headquarters is based in Lake Wobegon, where all the key performance indicators are strong, all the financial forecasts are good looking and all the business decisions are above average.

Whenever Lake Wobegon’s business leaders make a decision, they know on some level they could be making a mistake. But because they’re confident in their ability and, more importantly, want to display that confidence to others, they overestimate their ability to make good decisions.

I call this illusory superiority, which biases decision-makers into ignoring any other bales of hay (i.e., alternative decisions), thereby rescuing them from the decision dilemma and guaranteeing they will always be satisfied with their choice, the Decision Wobegon Effect.

Are your business decisions affected by the Decision Wobegon Effect?


About Author

Jim Harris

Blogger-in-Chief at Obsessive-Compulsive Data Quality (OCDQ)

Jim Harris is a recognized data quality thought leader with 25 years of enterprise data management industry experience. Jim is an independent consultant, speaker, and freelance writer. Jim is the Blogger-in-Chief at Obsessive-Compulsive Data Quality, an independent blog offering a vendor-neutral perspective on data quality and its related disciplines, including data governance, master data management, and business intelligence.

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