Tenets of Decision Making
- Challenge your assumptions (both implicit and explicit assumptions)
- Think about why and under what circumstances your assumptions could be wrong
- Be aware of any heuristics/Rules of thumb (System I thinking) during the decision making process
- 3 C’s — Communicate, Communicate, Communicate
- Assemble the most diverse team as possible
- Be aware of GroupThink
- Do not tolerate escalation of commitment
- Reward based on the soundness/cleverness of the decision making process, not on the results!
- Be Allocentric
- Why are the buyers buying and the sellers selling? (Think about Incentives — always)
- Who Chooses?
- Who Pays?
- Who Uses?
- Who Profits?
- Simulate by role playing
- PARTS — Players, Actions, Rules, Tactics and Scope
- Remember the typical games
- Prisoner’s Dilemma (PD)
- Entry/Preemption
- Why are the buyers buying and the sellers selling? (Think about Incentives — always)
- Always reframe from a neutral, positive, and negative context (mentally change your reference state)
- Expand your domain of analysis (Examine the games in the larger context)
- Choice architecture matters
- Consider the outside view (analysis based on the base rates and remember to avoid sample selection bias) versus the inside view
Tags: Behavioral