Skip to main content

Decision

In order to make better decisions, I try to structure and stabilize the process for making big decisions. I define a big decision as a decision that will affect you every day of your life for no shorter than 3 months or for a large duration of time every year (Every weekend for the rest of the year for example). This means that things such as accepting a job offer and moving in with your spouse to a new place are categorized as big decisions.

Do I believe that this framework will help me make better decisions? Not necessarily. But the reason is to make sure that if you make a wrong decision you understand your own thought process when you actually decide upon the route you took. This will hopefully make sure that you eliminate regret.

The whole point of decisions is that you have incomplete information. Therefore, it is important when reviewing the decision to make sure you have a snapshot of the information you had available.

Make big decisions as type 2 decisions

From Kahneman and Tversky, we have two types of decision-making states, type 1 and type 2

Type 1: Fast, Automatic, and Intuitive

  • Quick Judgement: These decisions are made almost instantly, relying on intuition or gut feeling.
  • Low Effort: Type 1 decisions usually require minimal cognitive processing, and are often subconscious.
  • Error-Prone: Due to their quick nature, these decisions can sometimes be incorrect or suboptimal.
  • Example: Deciding to swerve to avoid a collision while driving.

Type 2: Slow, Deliberative, and Analytical

  • Thoughtful Analysis: Type 2 decisions are made after careful evaluation of available options.
  • High Effort: These decisions usually require active cognitive processing, often using tools like logic and reasoned argument.
  • Error-Resistant: Slower, more deliberate thinking increases the likelihood of making a correct or optimal choice.
  • Example: Choosing a mortgage plan or making a career change.

I think the best way is to extend the decision-making time to at least a couple of days. Make sure you are in a good place, be content and relaxed, not tired, etc. Write down the decision you need to make and why. Investigate the background information and why you need to make

Links

  • Overchoice and How to Avoid it - Note: Buridan´s ass: a mythical donkey that finds itself precisely equidistant from two identical bales of hay. The ass tries to make a firm decision as to whether to eat from the left bale or the right, but since there’s no rational reason to prefer either, the donkey wavers until it starves to death.

Thoughts

  • Practice making decisions the right way the same way you practice other things. Do it a lot and then use the experience you get from doing the proper decision process in less essential decisions to reap the benefit in more significant decisions. It can be a decision to go on a hiking trip on Saturday, for example, but it will give you good practice.
  • Analysis paralysis is real, so keep the decisions brief and try only to consider the most critical aspects. If you have ten factors in your decision-making process, then you have at least seven too many.
  • Think of decisions as either a one-way or two-way door. If you can revert the decisions quickly and cheaply (a two-way door), the decision-making is making a quick but informed decision. If the cost of reverting is high, then you should think carefully and do a lot of study and consultation on it. This is from Jeff Bezos
  • It might be contradictory to make decisions longer than a day if you had a day to think about it, it should be enough.