Decision-Making Philosophies

life › think
analysis, decision, growth, strategy

In this thread I want to explain the right way to think about making decisions, divide in 3 decisions.

  • Decision Analysis
  • Heuristics and Biases
  • Going With your gut

Point of View

  • Decision Analysis

Decisions should be made systematically, even in the face of uncertainity. Decision trees provide a framework, and Bayesian statistics provides rules for revising probality assesments.

  • Heuristics and Biases

When people make decisions under certain conditions, they rely on rules of thumb, or heuristics, that sometimes yield reasonable judgements but sometimes cause big errors.

  • Going With your gut

The heuristics that people use to make decisions are oftem very effective.

When To use It?

  • Decision Analysis

To make big decisions with long investment horizons and reliable data-in oil and gas and pharma; whether to go to grad school. Also in negotiations and group decisions

  • Heuristics and Biases

To design better institutions, wanr ourselves away from dumb mistakes, and better understand the priorities of others.

  • Going With your gut

In predictable situations with opportunities for learning-firefighting, flying, sports. Also in highly uncertain situations where you cant necessarily rely on data.

Reseach Purpose