Decision-making

"The type of rationality we assume in economics — perfect, logical, deductive rationality — is extremely useful in generating solutions to theoretical problems. But it demands much of human behavior — much more in fact than it can usually deliver. If we were to imagine the vast collection of decision problems economic agents might conceivably deal with as a sea or an ocean, with the easier problems on top and more complicated ones at increasing depth, then deductive rationality would describe human behavior accurately only within a few feet of the surface. For example, the game Tic-Tac-Toe is simple, and we can readily find a perfectly rational, minimax solution to it. But we do not find rational “solutions” at the depth of Checkers; and certainly not at the still modest depths of Chess and Go."

"You have to start with the truth. The truth is the only way that we can get anywhere. Because any decision-making that is based upon lies or ignorance can't lead to a good conclusion."

"The fine art of executive decision consists in not deciding questions that are not now pertinent, in not deciding prematurely, in not making decision that cannot be made effective, and in not making decisions that others should make. Not to decide questions that are not pertinent at the time is uncommon good sense, though to raise them may be uncommon perspicacity. Not to decide questions prematurely is to refuse commitment of attitude or the development of prejudice. Not to make decisions that cannot be made effective is to refrain from destroying authority. Not to make decisions that others should make is to preserve morale, to develop competence, to fix responsibility, and to preserve authority."

"The dictionary defines "economics" as "a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services." Here is another definition of economics which I think is more helpful in explaining how economics relates to software engineering."

"If you obsess over whether you are making the right decision, you are basically assuming that the universe will reward you for one thing and punish you for another."

"In recent years there has been increased interest in the effects of internal communication on decision processes. A number of hypotheses relating the bias in information to the final decision have been proposed. In this paper we discuss two laboratory experiments which were designed to test two such hypotheses. The first experiment tests the hypothesis that cost and sales estimations are made with the implicit assumption that a biased pay-off structure exists. The second experiment tests explicitly the effects of biased and unbiased pay-off structures on estimation within an organization. An analysis of the data for the two experiments is made and some implications for further research are drawn from the results."

"Early states had a hereditary leader with a title equivalent to king, like a super paramount chief and exercising an even greater monopoly of information, decision making, and power. Even in democracies today, crucial knowledge is available to only a few individuals, who control the flow of information to the rest of the government and consequently control decisions. For instance, in the Cuban Missile Crisis of 1963, information and discussions that determined whether nuclear war would engulf half a billion people were initially confined by President Kennedy to a ten-member executive committee of the National Security Council that he himself appointed; then he limited final decisions to a four-member group consisting of himself and three of his cabinet ministers."

"... Making medical decisions has been the physician's job, never our own. When we seek treatment, we often find ourselves lost, adrift in a poorly designed system that pushes us along quickly and officiously from the silo of one specialist to the next. We're told to always ask our doctors, but then we're consigned to less than 15 minutes of face time in an office visit. When we seek out information, we get lost in a muddle of contradictory studies and imprecise advice. ... ... By factoring in our family histories, our good and bad habits, and, ultimately, the conditions we need to ward off or treat, using a approach can maximize our efforts to push ill health, and ultimately death, as far into the future as possible. It's a powerful way to think about our health."

"No decision in business provides greater potential for the creation of wealth (or its destruction, come to think of it) than the choice of which innovation to back."

"Optimism is normal, but some fortunate people are more optimistic than the rest of us. If you are genetically endowed with an optimistic bias, you hardly need to be told that you are a lucky person -- you already feel fortunate. Optimistic people play a disproportionate role in shaping our lives. Their decisions make a difference; they are inventors, entrepreneurs, political and military leaders -- not average people. They got to where they are by seeking challenges and taking risks. They are talented and they have been lucky, almost certainly luckier than they acknowledge."

"Children learn how to make good decisions by making decisions, not by following directions"

"Because people face trade-offs, making decisions requires comparing the costs and benefits of alternative courses of action. In many cases, however, the cost of an action is not as obvious as it might first appear. […] The opportunity cost of an item is what you give up to get that item. When making any decision, decision makers should be aware of the opportunity costs that accompany each possible action. In fact, they usually are. College athletes who can earn millions if they drop out of school and play professional sports are well aware that their opportunity cost of college is very high. It is not surprising that they often decide that the benefit of a college education is not worth the cost."

"Which eyes should I look for to find the ultimate unreasoned answer?"

"Without asking anybody’s advice, I turned myself insane."

"Decisions made against the will of the heart never bring good to anyone. Refusing may bring pain for a while, just for a moment, but agreeing to something merely to please someone aches forever and hurts everyone."

"The function of knowledge in the decision-making process is to determine which consequences follow upon which of the alternative strategies. It is the task of knowledge to select from the whole class of possible consequences a more limited subclass, or even (ideally) a single set of consequences correlated with each strategy."

"The central economic issues go beyond the traditional three questions posed at the beginning of every introductory text: What is to be produced? How is it to be produced? And for whom is it to be produced? Among the broader set of questions are: How should these resource allocation decisions be made? Who should make these decisions? How can those who are responsible for making these decisions be induced to make the right decisions? How are they to know what and how much information to acquire before making the decisions? How can the separate decisions of the millions of actors decision makers in the economy be coordinated?"

"Within image theory (e.g., Beach, 1990; Mitchell & Beach, 1990), it is suggested that important components of decision-making processes are the different “images” that a person may use to evaluate choice options. Images may represent a person's principles, goals, or plans. Decision options may then match or not match these images and be adopted, rejected, considered further, depending on circumstances."