Sunday, February 27, 2011

Decision Making

If everyone was blessed with unlimited resources there would be no decision making challenges. However, the central economic problem known as scarcity results in having to make choices between different feasible packages of goods. If people can't have everything they must try to optimize their decision making in order to arrive at the maximum amount of pleasure possibly achieved with the given budget constraint. Though economists can produce fanciful equations with complicated mathematics describing the process with which the average folks engage in such decisions, they offer no practical advice on exactly which decisions are optimal in which situations. The result is my lack of confidence in what seems to be an impractical and irrational science, and a feeling of ambivalence and helplessness when faced with some challenging and mostly irrelevant decisions.

Since the days when I started playing with toys, I would categorize my behavior as decision making challenged. From the color lolly pop to the courses in college, I have always found it impossible to decide between various options. After giving my nature some serious thought I have concluded that there are two logical reasons for having trouble with making decisions. The first challenge with decision making is the lack of proper information available for coming to informed conclusions. With easy access to a logical and comprehensive list of correlations between various decisions and their definite outcomes, decision making would become a purely logical process, and choosing a college would be as simple as counting to ten. Since computers are very good at logical reasoning, and most people today have access to advanced computing machines, decision making could easily be outsourced to sophisticated software packages. However, the information necessary for such computations just doesn't exist. Economists deal with the lack of information by introducing more complicated mathematics and given probabilities. However, it seems obvious that the lack of information means a lack of probabilities as well, and adding such factors only leads to unnecessary complications. A result of this problem is the impossibility of making perfectly logical conclusions.

The second problem, although admittedly a minor one, is the fact that half of the decisions are irrelevant either way. When given five different lolly pops to chose from I may end up deciding on green. But I freely admit that if green was not available I would have no less pleasure from choosing purple. If two choices are basically the same it becomes extremely difficult to make a logical decision between them. Both of these problems cause an element of irrationality to characterize the decision process.

Although these problems may sound very petty, they can be very debilitating for extremely logical people. I myself always try to act and think in the most logical manner, and I can be caught up for hours on those "hard" decisions. What do I eat for dinner? What articles should I read? Which career path should I take? Which girls should I date? Who do I vote for? Whose weddings should I attend? All of these questions may seem reasonable, but I can occupy my mind for weeks with some of these without moving any closer to a logical decision. In the end of the day I usually end up deciding on a whim, and the time spent contemplating would usually end up wasted. The waste doesn't stem from these questions being unimportant. Many of these are extremely important decisions. However, it seems that there is rarely a strong correlation between the amount of time pondering and any positive results from the final conclusion. Some people consistently make sound decisions, and the positive outcomes are frequently attributed to the careful decisions they have made. However, even the biggest winners can be seen to make very poor decisions at times, and those are attributed to random unpredictable shocks. But no matter what the good fortune is attributed to, an element of randomness is always the final deciding factor. It is therefore necessary to develop techniques for streamlining the decision making process as much as possible in order to avoid the wasted time.

To lessen the amount of time wasted contemplating my choice of action, I have devised two solutions to the decision making problem. The first solution is the artificial preference creation or structured randomness. To solve my problems with contemplating decisions I can develop a list of preferences and store them in my memory for future references. Other people may subconsciously make use of this technique in order to solve their own decision problems. For example, sometimes when visiting a restaurant people will peruse the menu and draw faulty and illogical conclusions about unknown variables. Will the moo goo gai pan really taste worse than the chow mein? Often there are some real unknowns and decisions are frequently made by invoking artificial preferences. People who can do this subconsciously are blessed. Unfortunately, I really have very few preferences and I mostly couldn't care less about what I eat for lunch. In order to cut down on the wasted time making the decisions, I must train myself to prefer certain foods over others, certain subjects over others, certain people over others, and certain stocks over others. Once such preferences are stored in my memory I will easily decide on my best food, my choice of college courses, my people to associate with, and my stocks to invest in. No longer will I lack strong opinions. If the topic is contentious enough I will develop an opinion just for arguments sake. I can walk around praising Pepsi over Coke, and everyone will be aware of my decisions even before I make them. Although the opinions and preferences begin as artificial, eventually I will begin to believe myself, and decision time will be greatly reduced.

The second solution would be to act with completely arbitrary decision making or with pure randomness. In order to use this solution I must completely embrace the random nature of things. This would include always carrying around a quarter in my pocket to make the most efficiently random Bernoulli trials, and in circumstances with more than two choices I would have a handy pair of dice. On first thought it would seem that such an option is very foolish. Why would one want to intentionally act in a random manner? However it may sometimes pay to act in a completely random manner if it can lead to efficient decision making. When playing minesweeper and trying to achieve the best possible timing it is necessary to make the guesses as fast as possible. Some decisions are completely random, and thinking to much into them is a pure waste of time. However, with a completely random guess, one is bound to win 50% of the time. Similarly with many day to day irrelevant decisions, the efficiency gained with making a rapid decision may frequently outweigh any negative results the random decisions may bring.

Some decisions are easy and others are hard. Sometimes enough thought is all that is necessary to optimize the process of making choices. But more often than not, the decisions lead to arbitrary conclusions, and spending too much time contemplating can lead to wasted time. Although it is impossible to standardize the decision making process when there are too many decisions, some form of random process may be the best option when only dealing with a few possible choices.


  1. Out of curiosity how long does it take you to write such a post?

  2. Writing a post doesn't involve that many decisions :)