The 3 Core Principles of Objective Decision Making

Are you the type of person who makes decisions based on cold facts and evidence? What are some things you should consider when it comes to evidence-based decision-making?

Considering evidence when making a decision is important, especially when it comes to high-stakes decisions. However, not all evidence is created equal. Never base your decisions on single-case evidence. Instead, base your decisions on representative evidence: evidence that reflects a large sample of cases.

Here’s why you shouldn’t rely on case evidence when making decisions.

Case Evidence vs. Representative Evidence

Sometimes, we make poor decisions because we base our choices on case evidence. Case evidence is usually a single data point or anecdote that doesn’t necessarily represent the actual probability of an outcome. This type of evidence-based decision-making can be misleading because it gives you the impression that an outcome is more or less likely than it actually is.

For example, imagine that you’re considering whether to invest in bitcoin. You hear from a colleague that her bitcoin investment is making significant returns. Her situation is an example of case evidence, and it may not reflect the actual probability of profiting from a bitcoin investment.

A Solution: Base Your Decisions on Representative Evidence

To avoid basing your decisions on case evidence, Bevelin claims that you should base your decisions on representative evidence. This evidence is more likely to reflect the actual probability of an outcome. For example, you could search for data revealing whether or not new bitcoin investors are making money. A recent study reveals that three in four new bitcoin investors have lost money on their initial investments. Because this research reflects the experiences of a large representation of bitcoin investors, it’s more reliable than a single colleague’s testimony.

(Shortform note: Marketers sometimes leverage our tendency to base our choices on case evidence, as opposed to stronger representative evidence that may work against these marketers’ interests. Experts on marketing claim that you can increase your sales if you share testimonials from current customers who enjoyed your product or service. These testimonials draw in new customers who feel compelled by others’ success stories, even if those testimonials aren’t representative of the average customer experience.)

Case Evidence vs. Representative Evidence-Based Decision-Making

Darya Sinusoid

Darya’s love for reading started with fantasy novels (The LOTR trilogy is still her all-time-favorite). Growing up, however, she found herself transitioning to non-fiction, psychological, and self-help books. She has a degree in Psychology and a deep passion for the subject. She likes reading research-informed books that distill the workings of the human brain/mind/consciousness and thinking of ways to apply the insights to her own life. Some of her favorites include Thinking, Fast and Slow, How We Decide, and The Wisdom of the Enneagram.

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