Overview
Todays competitive landscape increases the pressure on decision makers to optimize their decision making. When outcomes are uncertain, how do you make the best choices?
Classical economics, and more recently, artificial intelligence have enumerated the principles of rational decision making. However, recent advances in brain science have illuminated how we make actually decisions as well as the common mistakes we make when coming to those decisions. Luckily, there are well understood processes that one can adopt to align ones decisions with rational principles.
Topics
- Rational Decision Making - a description of what is thought to constitute rational decision making, used in economics and artificial intelligence
- Behavioural Decision Making - decisions making that is actually followed by humans, which includes decision making bias'
- Competitive Decisions - decisions in the presence of other competitors, such as games or business
- Decisions under Radical Uncertainty - decisions where outcomes are so uncertain such that it is difficult to formulate them in a probabilistic framework.
- Decision Making Process - processes designed to try to short circuit behavioural decision making in favor or rational decision making
- Decision Making and Execution
Famously Bad Decisions in History
Napolean invades Russia
The French invasion of Russia took place in 1812, in an attempt to force Russia back into the Continental blockade.
The Russians fought a war of attrition as they retreated, forcing the French forces to rely on increasingly strained
supply lines. When winter came, the French army was unable to cope and forced into retreat.
Hitler invades Russia Adolf Hitler amazingly had not learned the lesson that France had when he invaded Russia in WW2. Similar to the French experience, Germany found themselves in a war of attrition and devastated by the Russian winter. The repeated failures of Western European powers in Russia found note in the Princess Bride. "Never fight a land war in Russia!!"
Filling the Hindeburg with Hydrogen
In May 1937 the Hindenburg burst into flames killing several passengers and crew. It had been a marvel of engineering and was hoped to usher
in a new era of luxury air travel. One of the primary causes of the fire: filling it with a highly flammable gas such as Hydrogen instead of a less
combustible alternative.
Decca Records passes on the Beatles
In 1962, just a year a half before the Beatles played the Ed Sullivan show, Decca records passed up an opportunity to sign the Beatles
because they felt that guitar music was on the way out.
Accepting the Trojan Horse
In Homers epic, the Illiad, the Trojans successfully repel the Greek attack of their city for years, until the famous moment when the
Greeks trick the Trojans into thinking they have left, while leaving the Trojan horse at their gate.
Adam and Eve
The importance of human decisions have been recognized since antiquity.
Most cultures have origin stories which feature a protagonist who makes a fatal decision affecting their descendants through the centuries.