Decision-making can be hard. The number of decisions you need to make everyday can be overwhelming. Research shows that the more decisions we make in a given day, the worse we get at decision-making (decision fatigue). Sometimes you are making really, really hard decisions, where it is hard to choose one option over another even using all the data you have at your disposal, in the midst of this fatigue.
Decision Theory is a combination of logic, game theory and probability that seeks to formalize decisions into structured problems you can more easily solve. Great, but why should you care? Because it provides a number of common frameworks and tools that you can use to ensure you are consistent in your approach to decisions. The better you are at using these frameworks and tools, the better you will get at decision making – and the less likely you are to be overwhelmed and fall victim to decision fatigue.
Decision Theory is a large field, so we will only cover the basics you need to get started. Specifically we will cover:
- Part 2 – What is a decision? (Decision Models)
- Part 3 – What are the possible outcomes? (Expected Value Analysis)
- Part 4 – Structured decision making (Decision Trees)
- Part 5 – Simulating decisions (Monte Carlo Simulations)
Tomorrow we will get started by modeling decisions to make them easier to evaluate.
Quote of the Day: “Before I got married I had six theories about raising children; now, I have six children and no theories.” ― John Wilmot