How to Decide

There are only two things that determine how your life turns out: luck and the quality of your decisions.

There are only two things that determine how your life turns out: luck and the quality of your decisions. You have control over only one of those two things. Resulting bias is the tendency to judge a decision based on its outcome rather than the decision-making process itself. This bias can lead to poor learning and future decision-making. To overcome resulting: Separate decision quality from outcome quality Consider alternative outcomes that could have occurred Evaluate decisions based on the information available at the time Recognize the role of luck in outcomes By focusing on the decision-making process rather than just the results, you can improve your ability to make better choices in the future.

Memory creep is the reconstruction of your memory of what you knew that hindsight bias creates. Hindsight bias distorts our perception of past events, making them seem more predictable than they actually were. To combat this bias: Use a Knowledge Tracker to record what you knew before and after a decision Distinguish between information available at the time of decision and information revealed later Practice identifying instances of hindsight bias in everyday life Cultivate empathy for past decision-makers, including yourself By accurately tracking knowledge and recognizing the limitations of foresight, you can learn more effectively from past experiences and make better decisions in the future.

There are more possible futures than the one that actually happens. The decision multiverse is a mental model that encourages considering all potential outcomes of a decision, not just the one that occurred. To implement this approach: Construct simplified decision trees to visualize potential outcomes Practice counterfactual thinking by imagining "what if" scenarios Evaluate both positive and negative potential outcomes Use this perspective to better understand the role of luck in results By exploring the full range of possible outcomes, you can make more informed decisions and avoid overemphasizing singular results.

Assessing the quality of a decision involves figuring out whether going for the upside is worth risking the downside. The Three Ps framework provides a structured approach to decision-making: Preferences: Identify your goals and values Payoffs: Evaluate potential gains and losses Probabilities: Estimate the likelihood of each outcome To implement this framework: Create decision trees that include all three elements Practice estimating probabilities, even with limited information Consider both short-term and long-term payoffs Align decisions with your personal preferences and values By systematically considering these three factors, you can make more balanced and well-reasoned decisions.