How do you make a decision when everything is uncertain? Is there a way to predict the most likely outcome of a decision? One of the biggest obstacles preventing us from making good decisions is our inability to reliably predict the future. For example, it’s easy to decide whether or not to quit your job if you know you’ll get a raise within the next three months. As it is, the uncertain world prevents us from making decisions with confidence. Here is how to make good decisions in the face of uncertainty.
What is Brian Christian’s and Tom Griffith’s book Algorithms to Live By about? What is the key message to take away from the book? Algorithms to Live By is an instruction manual for life: a collection of unconventional wisdom drawn from the field of computer science. Computers and humans share many of the same problems, and the same solutions that have allowed us to optimize the field of computing may be the ticket to optimizing our own lives. Below is a brief overview of Algorithms to Live By: The Computer Science of Human Decisions.
What do you do when faced with a difficult choice in life? Do you ever just make decisions at random? Sometimes, the best way to make a difficult choice in life is to appeal to chance. By making a few random, intentionally suboptimal decisions, you can discover opportunities you couldn’t see before and get unstuck. Here is why random decision-making is sometimes the best way to go.
How do you make an informed decision when there are just too many variables to consider? What about variables that are yet unknown? Whenever you make a decision, you’re using all the existing data of your life so far to predict what choice will result in the best outcome. But as statistics tell us, taking too many variables into account results in faulty predictions. That’s why, sometimes, the best way to make a complex decision is to make a less informed decision. Here is why you should make less informed decisions.
What is the threshold effect? How does it apply to intelligence and, ultimately, success in life? Geniuses are outliers—they are outside the norm when it comes to intelligence. Higher intelligence certainly can lead to greater success. However, differences in achievement based on intelligence level out at some point. This is the threshold effect. Read more to learn about the threshold effect in relation to intelligence and success.
What is the 3.5% rule? Does it really take only 3.5% of the population to challenge the status quo? According to Nassim Taleb, the author of Skin in the Game, the state of the world is largely the result of small groups passionately fighting for what they want rather than a majority’s consensus. Indeed, history shows us that in order for your passionate few to succeed, you only need 3.5% of the population on your side. In this article, we’ll explore how the concept applies to politics, religion, language, and morality. We’ll conclude by explaining how you yourself can be
What is the curse of dimensionality? Is it ever possible to predict the behavior of a complex system? The curse of dimensionality is a mathematical principle that states that as a system grows, the rate at which it becomes complex accelerates. In his book Skin in the Game, Nassim Taleb argues that because of the curse of dimensionality, complex systems are impossible to reliably predict—any adjustment made to a large, complex system will cause an avalanche of unintended side effects. Without the true knowledge gained from failure, we would never know enough to navigate the infinitely complex world. In this
What is the Diffusion of Innovation (aka TALC) model? How many categories of customers are there in the TALC framework? The Diffusion of Innovation model (also known as the Technology Adoption Life Cycle) was developed by Beal and Bohlen, two agricultural extension agents working for Iowa State College in the 1950s. They developed the model based on studies of when farmers started using new agricultural innovations, such as fertilizer and hybrid seed corn. Others soon generalized the model to technological innovations outside of agriculture. In this article, we’ll take a look at how the Diffusion of Innovation Model explains the
What is white hat thinking from the book Six Thinking Hats? What role does the white hat play? In the classic psychology book Six Thinking Hats, Edward de Bono describes the white hat as the neutral hat. The role of the wearer is to simply gather and present the facts and figures without interpreting any of the data. Continue below to learn how to wear the white hat and what the advantages are.
Are you a good judge of probability? Do you take into account probability when making decisions that involve an element of risk? According to former options trader Nassim Taleb, most people have a poor grasp of real-world probability, and as a result, they misunderstand the likelihood of rare events and consequently don’t plan for risk appropriately. In his book Fooled by Randomness, he cites three reasons for our difficulty in understanding how probability plays out in the real world: 1) we don’t properly interpret the past, 2) we can’t predict the future, and 3) we don’t insure against risk properly.