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Decisions With Incomplete Knowledge

Decisions With Incomplete Knowledge

    Yesterday I made dozens of decisions, on topics as varied as Dilbert licensing, landscape design, marketing, and investing. In all cases I was operating with incomplete information, which is typical. As a practical matter, most decisions happen without the benefit of all the data you would like.

    It made me reflect on all of the little rules one develops over the years for handling decisions without the benefit of sufficient data. You always start with the easy questions, such as…

    1. What do the experts say you should do?
    2. How much experience do the experts have with this question?
    3. Does the expert have a conflict of interest?
    4. What’s the worst thing that could happen?
    5. How easy is it to switch course if you choose wrong?
    6. What information can you find on the Internet?
    7. Who has made this choice before? Were they satisfied?
    8. If I delay, will I learn something more that is useful?
    9. Is there a way to do a limited test?
    10. Does the decision make logical and mathematical sense?
    11. Do the experts make this choice with their own money?
    12. What do the well-informed people in my situation usually do?
    13. What does the competing vendor say about this vendor?
    14. Have I seen all of the alternatives?

    Those are the questions with relatively clear or quantitative answers. It’s the next category of questions that intrigue me, because they involve pattern recognition, and I can’t always tell whether I am being influenced by fear and bias, or keen intuition informed by my experience. The questions in this category look like this…

    1. Does this situation follow a pattern I’ve seen in scams?
    2. Is someone giving answers that seem intentionally vague?
    3. Is information conspicuously missing?
    4. Is someone trying to rush me?
    5. Could someone unscrupulous easily take advantage of me?
    6. Have I regretted this sort of decision before?
    7. How do I imagine other people will react to this decision?
    8. If the expert is so smart, why isn’t he rich?

    What questions would you add to the list?

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