In her book, How to Decide: Simple Tools for Making Better Choices, Annie Duke discusses how to train our brains to combat our own bias and help ourselves make more confident and better decisions.
These are some of my favorite concepts and takeaways from reading the book.
Chapter 7, “Breaking Free from Analysis Paralysis”
In this chapter, Annie Duke discusses how we can spend our decision-making time more wisely and reaching working decisions faster. She offers the following four recommendations:
- The Happiness Test:
- We spend an enormous amount of time on routine, inconsequential decisions. Recognizing when decisions are low-impact can maximize our opportunities to make high-impact decisions more effectively.
- Every decision will have a time-accuracy trade-off. Increasing accuracy costs time and saving time costs accuracy.
- The Happiness Test asks us if how our decision turns out will likely have a significant effect on our happiness in a year. If the pending decision passes the test, we can speed up the decision-making process.
- Often, a decision can fall into the “repeating options” category. That is when the same type of decision comes up repeatedly. When we have these “repeating options” decisions, we can go even faster.
- Freerolling is a situation where there is an asymmetry between the upside and downside because the potential losses are insignificant. The key feature of a freeroll is a limited downside.
- When we identify a freeroll, we should spend less time deciding whether to engage with the opportunity. The faster we engage, the less likely it is that the chance goes away.
- We should go fast on a freeroll, but we still want to take time to plan and execution of the decision.