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Decisions and Alternatives

In any real situation there are alternatives, one of them being to do nothing. If we find one alternative has problems, we cannot reject it unless there is some other alternative that has less severe problems. When we consider alternatives, we must take into consideration exactly what each alternative involves, and decide what the consequences of each are likely to be. Then we can choose what we prefer.

After seeing news of an airplane crash, we might decide that it is unsafe to travel by air. Our decision might be not to take some airplane flight we would otherwise have taken. Whether this decision is rational depends on our alternatives. We could simply stay home and not take the trip, in which case we have probably reduced our risk. On the other hand we might choose to go to the same destination by car instead of by airplane. In that case we would need to know how the risk of flying compares with the risk of driving. It turns out that driving would almost certainly be more dangerous.

Risk of death is not the only factor that is relevant to the choice, of course. If a person is terrified of flying, the plane trip, even though actually safer, might be so unpleasant as to spoil the enjoyment of the trip. Driving is likely to take a much longer time which is a disadvantage, but has the advantage that the traveler has a car to use at the destination. Cost is another consideration. For a person traveling alone who gets a discount airfare, flying is often cheaper, but for a lot of people traveling in one car and who would otherwise buy separate airline tickets, driving is almost always less expensive.

Some people feel that we should close down all nuclear power plants. The plants are dangerous since an accident could result in the release of deadly radioactive materials into the environment, and even when there is no accident the disposal of spent fuel and other radioactive materials poses a hazard long into the future. It isn't valid to make the decision based on these factors alone, however. While closing them would eliminate these problems, we must know the magnitude of other problems that would occur as a result of the closing. A very likely alternative might be that the production of coal powered plants would be increased to make up for the lost nuclear generated energy. I have seen estimates that suggest that the pollution from coal based power plants kills far more people than would be killed by the equivalent nuclear plants even with the occasional accident. There are other alternatives, such as everyone using less power, or building wind or geothermal generators. The cost and likelihood of implementing these alternatives have to be considered if we are to make a rational decision about whether to stop using nuclear power.

Issues involving the killing of animals also present difficulties when we examine alternatives. Some people feel it is inhumane to kill animals for food. If we stopped, however, what would happen to the animals? People would stop raising cattle, chickens, and pigs for food. The result would be a huge decrease in the population of these animals. From the point of view of the animals (if they could be said to have a point of view) is this better or worse?

Some feel it is inhumane to hunt deer in the fall. Certainly it is unpleasant to think of innocent animals being shot for human entertainment. What is the alternative? My understanding is that states control the hunting so that the number of deer that are killed is no greater than the number who would have starved in the winter due to lack of food. If this is the case, for each deer killed there is likely to be one that does not starve to death. Since starving seems to be a more cruel way of dying than being shot, hunting may actually be humane. While there are other issues that may cause us to like or dislike hunting, on the issue of cruelty it is important to compare the problems with the realistic alternatives.

A common problem with comparing alternatives is that we often don't know what the result of each choice will be. Decisions in casino gambling are an obvious case of this. If you are at the roulette table you can decide to make or not make any particular bet. If you bet $10 on black, you might get $20 back for a $10 gain, or nothing back for a $10 loss. If you don't bet, your gain or loss is zero. Which is the better decision? To evaluate the choice of making the bet, you should determine how much you will get back on the average. To do this, multiply the amount of each gain times the probability of that gain and add them together. For losses, use a negative number for the "gain". At the usual American roulette table there are 18 black numbers, 18 red numbers, and two green numbers ( 0 and 00 ). Out of a total of 38 possibilities, 18 will win and 20 will lose. The probability of winning is 18/38, which multiplied by $10 gives $4.74. Losing has a probability of 20/38 times a "gain" of -$10 giving -$5.26. Add these together and the average value of the "betting" choice is -$.52. So if you are trying to end up with as much money as possible, "not betting" is the best strategy (a zero gain is better than a negative gain). The fact that betting is going to lose money on the average is no surprise, since the casino loses whatever the player wins, and casinos do not offer games in which they lose. (If you are playing for entertainment rather than monetary gain, betting may be a valid choice if you find the entertainment is worth the amount you typically lose. After all, you lose the ticket price when you go to a baseball game or a show.)

Calculating the average gain for a choice is valid in areas other than gambling, although you will rarely have exact values for the probabilities. You have to estimate probabilities for yourself. If you have an opportunity to invest $1000 in a new business and think the business has a 20% chance of giving you an $8000 return and an 80% chance of going broke (a $1000 loss) the average gain is .2 times $8000 which is $1600, plus .8 times -$1000 or -$800, so on the average you would gain $800. Of course there is a danger in estimating the probabilities, especially given that people who want you to invest probably won't give you an impartial view of the risks and benefits.

A person in charge of spending money on medical research or planning a military operation may make similar calculations in which probabilities of success and failure affect saving lives rather than money.

In recent years it has been something of a management fad to encourage "risk taking". Unfortunately they rarely seem to address how we would determine whether a risk is worth taking. If you spend a million dollars on a project that has a 50% chance of succeeding, and success would only return a $1.5 million revenue, then the risk is unwise. If you did it twice and succeeded once and failed once, you would spend $2 million and get $1.5 million back for a loss of half a million (a quarter million loss on the average). If success would return $3 million, then the project would, on the average, make money.

In practice we make decisions well intuitively if they involve consequences and probabilities that are easy to grasp. Decisions about public policy where huge numbers of people may be affected are hard to judge intuitively because we have little ability to judge the amount of good or harm involved. Very low probabilities, like those for an airplane crash, fatal car accident, or a lottery win, are also beyond our accurate comprehension. In such cases we need to rely on statistics and calculations to make intelligent judgments.