What is the influence of algorithms on decision making?

It is the way digital systems shape what options you see, how they are framed, and how easy each action is to perform. This influence often happens before you feel you are “choosing,” by controlling defaults, attention, and friction in the interface.

How do algorithms affect financial decisions specifically?

In financial contexts, systems often make spending and credit actions frictionless, while making protective actions harder. Prominent “Pay” or “Buy Now” buttons, hidden fees, and easy installment plans push users toward faster approvals and less reflection.

What are dark patterns and why do they matter?

Dark patterns are interface designs that nudge users toward actions that benefit the company, such as spending, subscribing, or continuing to scroll. They matter because they exploit cognitive biases, reduce informed consent, and increase impulsive behavior.

Are algorithms “evil” or intentionally manipulative?

Algorithms are not moral agents, they optimize for goals set by humans, such as engagement, time on site, or revenue. The harm often comes from misaligned incentives, the system’s goal can conflict with the user’s goal.

Why does it feel like personal failure when people struggle?

Because the environment is designed to trigger fast reactions and reduce reflection, yet individuals blame themselves for outcomes. Understanding choice architecture replaces guilt with strategy: you are not weak, you are operating inside a highly optimized system.

What is a counter-system and how does it help?

A counter-system is a redesign of your personal decision environment. It adds intentional friction where impulsive actions are too easy, and removes friction where your long-term goals need support, reducing reliance on willpower.

What are practical ways to reduce algorithmic influence?

Use rules instead of repeated decisions, automate savings and investments, disable commercial notifications, and remove saved payment details. These steps restore deliberate choice by reintroducing small pauses before high-impact actions.

Does this apply beyond money?

Yes. The same mechanics appear in social feeds, dating apps, news consumption, and health apps. Algorithms shape attention and emotion by prioritizing certain stimuli and hiding others, which can push people into reactive, short-term behavior.

The Influence of Algorithms on Decision Making: The Illusion of Free Choice

Amit Smaja
7 days ago
10 min read

It happens dozens of times a day, sometimes hundreds. It happens in the "in-between" moments: waiting for a traffic light, standing in line for coffee, or just when a few seconds of silence settle in the living room. The hand reaches automatically for the pocket, pulls out the device, the finger swipes the screen, and the eyes lock onto the blue light. We open an app, press a prominent button, scroll down a bit more to see "just one more thing," and confirm an action.

There is no drama. There is no moment of deep philosophical hesitation or a pause for thought. Everything feels natural, intuitive, almost automatic. A smooth flow of digital life, where every whim is satisfied instantly and every question is answered immediately. On the surface, this is the peak of convenience and progress.

But beneath the surface, under the designed interfaces and smooth animations, something much deeper and more sophisticated is taking place. Our daily decisions -from what we eat for lunch, to which insurance we buy, to who we vote for - are not made in a sterile vacuum. They are made within a complex ecosystem of systems, algorithms, and digital environments carefully designed by entire teams of behavioral psychologists, data scientists, and user experience designers. Their goal is singular: to gently guide us, often without us feeling it at all, toward the action they desire.

The significance of this process is not merely theoretical or academic. It is not a topic for a distant tech conference. It directly touches our daily peace of mind, our ability to plan our financial future, and the most basic feeling that defines us as free human beings: the sense of whether we are truly managing our lives - or mostly reacting to external stimuli.

In this article, we will dive deep into the phenomenon and understand the hidden mechanisms that operate us. We will see how the influence of algorithms on decision making has become the quietest and strongest force in the modern era, and what can be done to take the reins back.

Fingers tap "CONFIRM" on smartphone. Background shows financial icons. Text: "Free Choice, Programmed Systems: The Impact of Algorithms."

The Influence of Algorithms on Decision Making Starts Long Before the Choice Itself

Most of us like to think of ourselves as rational beings ("Homo Economicus"). We tell ourselves a story in which we are the captain of the ship: we weigh options seriously, compare prices wisely, read the fine print, and conduct ourselves as if every choice is the result of independent, cold, and calculated discretion. This is a very comforting concept for the ego; it gives us a sense of control. But unfortunately, it ignores the truly critical question: who determined the "choice architecture" within which we operate?

Our choice almost never starts from zero. It always begins within a frame that has already defined for us what is accessible, what stands out, and what is hidden. Think of a supermarket: products at eye level sell more than those on the bottom shelf. On the internet, the shelf is infinite, and the algorithm is the clerk determining what will be at our virtual "eye level."

The algorithm determines what we see first in the news feed, what is pushed to the next screen requiring an extra scroll, and what requires active effort and a meticulous search to reach. Studies show that most users almost never change the default option the system offers them. In other words, we do not choose from all the possibilities existing in the world, but from a limited menu that someone else has already edited, seasoned, and served to us.

The influence of algorithms on decision making begins long before the moment of choice itself. It starts with the design of the options. The system decides which news will anger us and cause us to react, which products will tempt us, and which people will be presented to us as romantic possibilities. We choose, yes, but we choose from the options the algorithm has marked as "relevant."

Money as an Example: How the System Pushes the Right Buttons

Money is the perfect case study for understanding this phenomenon because it connects three explosive factors: emotion, time, and heavy future consequences. The digital age brought with it a promise of convenience: "banking without breaks," "digital wallet," "tap to pay." The dominant slogan is Frictionless - an experience without friction.

But that friction, that small and annoying moment where we once had to take bills out of a wallet and count them, or write a check and sign it - was a defense mechanism. It was a moment of awareness. When the friction disappears, so does the awareness of the "pain of paying."

Take a seemingly simple daily action like buying online or paying in a banking app. Pay attention to the User Interface (UI) design: The large, colorful, and central button is always "Pay," "Buy Now," or "Approve Loan." It pulses, it invites, it promises immediate gratification.

In contrast, the truly critical information - the breakdown of the effective annual interest rate, the accumulated fees, or the meaning of committing to 36 payments on a product that will break in a year - appears in small print, in faded gray color, sometimes on a separate screen, and sometimes behind a hidden "Terms and Conditions" link.

In the UX (User Experience) industry, there is a name for this: "Dark Patterns." This is not a design error and it is not negligence; it is a conscious business decision. Digital systems are built so that the action desired by the system (spending money, consuming content) is the easiest to perform ("zero friction"), while the action that protects the user (canceling a subscription, checking terms, closing an account) requires stopping, reading, complicated navigation, and thinking ("high friction").

The result? The decision to spend money becomes fast and intuitive. The decision to understand its true price becomes cumbersome and exhausting. The default is installments. The default is an open credit line. The default is not to stop and check, but to approve and move on. Not because we are lazy, but because that is how the choice environment was designed.

The Brain vs. The Machine: An Unfair Fight for Dopamine

To understand the depth of the process, one needs to understand a bit of biology. The human brain did not evolve to deal with a digital environment of abundance that bombards it with stimuli 24/7. It evolved in an environment of scarcity, where every opportunity for food (sugar, fat) or new information had to be exploited immediately.

Algorithms exploit an evolutionary loophole called the "Reward System." When we see a new "Like," when we get a surprising discount, or when we succeed in a "level" in a game - the brain releases dopamine. This is a neurotransmitter that causes us a feeling of pleasure and a desire for "more."

Digital systems work according to a principle called "Variable Reward," the same principle upon which slot machines in a casino are based. We don't know what we'll get when we open the app - maybe good news? Maybe an exciting message? Maybe an amazing sale? This uncertainty is addictive. We check again and again, like a lab rat pressing a lever in hopes of getting food.

In such a state of dopamine flooding, the ability of the frontal lobe in the brain (the part responsible for long-term planning, delaying gratification, and self-control) weakens significantly. We enter "Autopilot" mode. In this state, we do not make decisions; we react to triggers. The system recognizes that we are tired (for example, based on our browsing hours at night), and serves us exactly then the temptations that are hardest for us to resist.

The Algorithm Isn’t Caring - It’s Optimal (And That’s Worse)

It is important to stop here and avoid the simplistic discourse about "evil," "conspiracy," or "Big Brother." If we think algorithms are "wicked," we miss the point. Algorithms are lines of code. They have no feelings, no conscience, and no hidden intentions to hurt us personally. They are simply perfect optimization machines.

They do exactly what they were programmed to do: measure data, compare millions of options in a fraction of a second, and maximize a certain variable determined in advance by the developing company. Usually, this variable is "Time on Site," "Engagement," or "Customer Lifetime Value" (how much money you will spend over time).

The big problem begins when the system's goal does not align with, or even contradicts, the human's goal.

Your Goal: Sleep 8 hours a night to be healthy and focused.
The Algorithm's Goal (Netflix/TikTok): Keep you watching, because that's the business model. The solution? "Auto-play" the next episode in 5 seconds.

Your Goal: Save money for an apartment or retirement.
The Algorithm's Goal (Trading/Shopping App): Have you perform actions, buy, trade. A digital financial system is rewarded for movement/traffic. It is not rewarded for a user stopping, thinking, and choosing not to perform an action.

In this sense, the influence of algorithms on decision making is the result of an inherent goal misalignment. The algorithm is not against us, but it is certainly not for us. It is indifferent to our mental or financial well-being. Its optimization creates indirect, constant, and relentless pressure, directing us toward actions that serve the company, and distancing us from actions that serve us.

Why It Feels Like a Personal Failure

One of the hardest and saddest consequences of an unbalanced digital environment is the psychological impact on our self-image. When people struggle to manage their finances, when they waste hours on social networks instead of working or being with their children, they tend to blame themselves harshly.

"I have no control," "I am addicted," "I don't know how to manage myself," "There is something wrong with me." We view our behavior as a moral weakness.

But this is a wrong, and even dangerous, conclusion. Most people are not operating within a neutral and fair playing field. They are playing a game where the deck has been stacked in advance. They operate within a system that applies known cognitive biases against them on an industrial scale. Expecting a single individual to win, using willpower alone, against a supercomputer that knows everything about them and processes data in real-time - is unfair.

When this is understood, the heavy and paralyzing guilt is replaced by responsibility. Not responsibility in the punishing sense, but responsibility in the sense of strategic understanding: "I understand the new rules of the game, and now I can change the way I play."

True Resilience: Building a Counter-System

So what do we do? If the digital environment shapes our decisions so effectively, the attempt to "be stronger," "decide that from now on I'm saving," or rely on self-discipline - is doomed to almost certain failure. Willpower is a depleting resource; it wears out as the day goes on. The algorithm, on the other hand, never gets tired.

The only way to take control back is not to fight with force, but with wisdom. We must build a counter-system. A counter-system is essentially a re-design of our personal decision environment. We need to become the "architects" of our digital lives, instead of just being their users.

The goal of the counter-system is to introduce artificial friction in places where the digital system removed it, and remove friction in places important to us. Here are some principles for such a system:

Moving from Decisions to Rules: Instead of debating every time anew "Should I buy this shirt?", define a binary rule. For example: "I don't buy anything online after 9:00 PM" (because that's when willpower is weakest). Or "Any purchase over $50 requires a 24-hour waiting period." The rule saves the energy of decision-making.
Positive Automation: If the algorithm wants us to spend money easily, we will use technology to save easily. Create standing orders for investment or savings that go out at the beginning of the month, before we start spending. The money "disappears" from the current account, and we manage with what's left.
Cleaning Up the Noise: Aggressively canceling notifications from marketing and commercial apps. Every beep is an invitation from the algorithm to enter its playing field. Canceling notifications returns the initiative to us - we will enter the app when we want to, not when it calls us.
Changing the Browsing Environment: Removing saved credit card details from the browser and apps. It sounds petty, but the need to get up from the sofa, bring the wallet, and type 16 digits creates exactly that small "friction" that allows the rational brain to wake up and ask: "Wait, do I really need this?"

What This Means for Life Beyond Money

Money is perhaps the clearest and most measurable example, but the same mechanism operates today in almost every area of our lives.

In dating apps, the algorithm decides who we see, creating a sense of "infinite abundance" that causes us to disqualify people over trifles and fear commitment. In news consumption, the algorithm traps us in "Echo Chambers" that present us only with opinions that reinforce what we already think, which radicalizes the discourse and distorts our perception of reality.

Those who do not understand the phenomenon of the influence of algorithms on decision making experience life as a chaotic sequence of reactions. Notifications, headlines, external pressures, and momentary temptations dictate the pace of their lives. They live in a constant "present tense," without a real ability to look forward.

In contrast, those who do understand the mechanism start asking completely different questions: Who designed the space in which I am currently operating? What is the interest of this screen I am staring at? And in which direction is the system pushing me right now? This is the critical transition point: from reaction - to management. From survival - to planning. From an object being operated - to a subject taking action.

Bottom Line: Control Begins with Understanding

We do not live in a utopian world where choice is completely free, nor in a deterministic world where everything is dictated in advance and we have no agency. We live in the middle, in the gray and complex area. We live within smart, learning, fast systems that are optimal for their goals - which do not always match ours.

Control over our lives will not return by abstaining from technology and retiring to a cave in the desert. Technology is here to stay, and it has tremendous advantages. Control will return when we stop being naive about the systems that surround us, and start understanding them.

The moment we internalize the power of the influence of algorithms on daily decision making, we can stop blaming ourselves for every stumble, and start building true resilience. Not through a Sisyphean struggle against forces greater than us, but through smart planning of our immediate environment.

In the reality of 2026, mental clarity and the ability to stop a moment before the click are not luxuries. They are a basic condition for freedom. And just like the daily click on the "Confirm" button in an app, so too in life itself, the choice exists in every single moment. The big question that remains open is one: Is this choice being made on "autopilot," out of a habit the system created for us - or is it being made out of a conscious, clear, and awake understanding of the one who truly holds the steering wheel of their life.