Breaking free from Analysis Paralysis Flashcards
What is time-accuracy trade-off ?
Increasing accuracy costs time. Saving time costs accuracy
What is key to balancing the trade-off between time and accuracy ?
is figuring out the penalty for not getting the decision ‘exactly’ right.
How will identify situations in which the penalty is small or nonexistent ?
Getting an initial understanding of the impact of your decision (through the framework of evaluating possibilities, payoffs, and probabilities)
This will give you leeway to sacrifice accuracy in favor of deciding faster.
What is other benefit of recognizing when decisions are low impact ?
It maximizes opportunities to poke at the world, which increases your ‘knowledge’ and helps you learn more about your ‘preferences’, improving the quality of all future decisions.
How can you identify low-impact decisions ?
With the Happiness Test - Asking yourself if how your decision turns out will likely have an effect on your happiness in a week, a month, or a year.
What should you do if the type of thing you are deciding about passes the Happiness Test ?
you can go fast.
If a decision passes the Happiness Test and the options repeat, you can go even faster.
What is freeroll ?
A freeroll is a situation in which there is “limited downside”.
“Save” time deciding ‘whether’ to seize a freeroll; “take time” in deciding “how to execute” it.
When you have multiple options that are close in potential payoffs, what should you do ?
Mostly, these are sheep in wolf’s clothing decisions.
Close calls for high-impact decisions tend to induce analysis paralysis, but the indecision is, in itself, a signal that you can go fast.
How do you determine if a decision is a sheep in wolf’s clothing ?
use the Only-Option Test, asking yourself for each option, “If this were the only option I had, would I be happy with it?”
If your answer is yes for more than one option, you could flip a coin since you can’t be that wrong whichever option you pick.
What is Menu Strategy ?
Allocate your decision time using the menu strategy.
“Spend time” sorting, determining which options you like.
Once you have options you like, “save time” picking.
What is the opportunity cost ?
When you pick an option, you’re passing on the potential gains associated with the options you don’t pick
The higher the opportunity cost, the higher the penalty for making choices that are less certain.
How can you defray opportunity cost ?
You can defray opportunity cost and decide faster by
- being quit-to-itive, looking at decisions through the framework of whether a) you can change your mind, b) quit your choice, and c) choose something else at a reasonable cost.
- if you can exercise multiple options in parallel.
What is other benefit of decisions with a low cost to quit, known as two-way-door decisions ?
They provide you with low-cost opportunities to make experimental decisions to gather information and learn about your values and preferences for future decisions.
What should you do when you’re facing a decision with a high or prohibitive cost of changing your mind ?
Try decision stacking.
making two-way-door decisions ahead of the one-way-door decision
In other words, finding ways to make low-impact , easy to quit decisions in advance of high impact, harder to quit decisions.
Because you can rarely approach perfect information or be certain of the outcome of your decision, you will make most decisions while still uncertain
To figure out when additional time is no longer likely to increase accuracy in a worthwhile way, what should you ask yourself ?
Is there information what would change my mind ?
If no, decide.
If yes, can i afford it ?
If yes, go find it.
If no, decide and move on.
