Decision Making Models
Expected utility calculation
Looking at the expected value of all possible choices weighted with the predicted outcome of their probably. Core in calculating strategy in poker using card probabilities + pot odds.
The basic expected value formula is the probability of an event multiplied by the amount of times the event happens:
(P(x) * n).
Zone of indifference problem
Decisions between options with a high variance in quality is easy. Decisions get harder as the options get closer, but if they are close enough then the decision doesn't matter. This is called the zone of indifference. Can be solved with "random beats inaction"
Random beats inaction
If a set of choices has a low range of variance, are easily reversible, or aren't worth the expenditure of trying to solve them, the best action may be to decide randomly, via coin or d20.
A parable: In the desert stands a donkey, halfway between water and food. It wants both equally and dies due to indecision. If the donkey were nudged at random in one direction or the other, it would have moved towards one, and then the other.
Null hypothesis
Asking for a decision "what if we do nothing?" for a given option. Sometimes the winning move is not to play.
Make reversible decisions quickly
"Some decisions are one-way doors, make those decisions slowly. But most are changeable and reversible. They should be made quickly by high judgement individuals in small groups" - Jeff Bezos
Effectual reasoning
Instead of asking yourself "where do I want to go, and how can I bridge the gap?", instead think of "based on where I am now, where can I go from here?" - effectual reasoning
Least wrong options - AKA the shadow exercise
List out all possible options for a decision. Remove the option that is the most obviously incorrect. Repeat until you are left with a single option.
Heart of the coin
Flip a coin. While the coin is in the air, do you find yourself wishing deep down that it lands one way or the other? Don't look at the result; you already have your answer.