The Price of Wisdom - 高山雪 Snow Hill

A good quote from the book of Smart Choices, "The quality of our decision making is not judged by the quality of consequences." The authors put it, you may end up: A smart choice, a bad consequence : the decision is fine, but it is only things happen. The rare bad case scenario happens which ruins the result. How do you know the rare bad thing could happen before make the decision? We never know! This is uncertainty. A poor choice, a good consequence: even the decision is poor but outcome is good, it is just because of luck.  Once you have made the decision right, the outcome may be subject to uncertainties.     What uncertainty means to us? The authors put it: " you may know what might happen, but you won't know what will happen ." This is because of uncertainty .  Uncertainties can be arisen from:  (a) information/ data uncertainties,  (b) model uncertainties,  (c) calculation/ mathematical uncertainties,  (d) result/ outcome uncertainties, etc.  Uncert

We have difficulty in decision making is because very often there are more than one alternative to choose from, where one alternative would better satisfy one objective but worse in the other. In a real world situation, we can't always have all goods in one alternative. In such a situation, we have to make trade-off, i.e. seek balance amongst all alternatives and make a relatively balanced decision. The more objectives and the more alternatives you have in your decision making process, the more trade-offs you will have to make, and more difficult a task the decision maker has to do.  An excellent method called "Even Swap Method" is useful to get one or more objectives removed from your consequence table so as to simply a complex decision, which adopts the concept of trade-off  . I term it "Cancel-Out" method .  The key to it is "compensation" . 

  In order to construct a consequence table, we must list out objectives (on rows) and alternatives (on columns) to be able to build a consequence table.   Objectives Setting Objectives are the criteria and your guide for your decision, so they are important in your decision process. Think about:  What are the things you most want, The concerns you want to address,  The outcomes you most want to avoid ,  Always ask "why" can help you to find out the fundamental objectives.  Using the fundamental objectives to evaluate and compare alternatives, From the fundamental objectives, you can think about some mean objectives to achieve those fundamental ones. Or you can grow some sub-objectives from one fundamental objectives (see Figure 1). Ask yourself, " are you happy with the alternative that satisfies the objectives you've listed? " If no, there may be some objectives missing, Ask yourself, "are the objectives you wrote just the means or the end?".  Des

  The following is the summary of  the PrOACT approach taken out from the book, Smart Choices, by Hammond et al (1999).  The first part of the book review: Smart Choices (1) | Focus and Defining Problem   As said in the first part, this PrOACT approach is to resolve a complex decision problem by breaking it into the following eight elements, think systematically, focus on those that are critical  to the problem.

不確定時 如果在完全沒有資料和數據下，我們唯有用自己的 本能 (instinct) 或 直覺 (gut feeling) ，作最合理的決策。因為有時有些事情，人的腦子不能逐一拆解，但能記下那複雜系統引伸的後果或記下用來處理的手法，這就形成了人的本能 (instinct) 或 直覺 (gut feeling)。這套思考習慣、捷徑又叫「捷思 Heuristic」。 Gerd Gigerenzer 提倡用直覺來解決複雜系統內的問題。例如：攬球員是用凝視捷思 Gaze Heuristic 來接下飛來攬球，而非運算那複雜數式來計算飛球的軌跡。所以在決策上，要善用自己的本能或直覺。 筆者要強調 用 直覺 進行的決策， 只限於 : 1) 高不確定性 high uncertainty 而 時間緊迫 時使用， 而非 在有明確數據資料顯示是高風險 high risk 又時間充裕時使用。因為如數據資料清晰，而後果又影響深遠時，我們必須經過適合思維模型進行理性分析、估 算 可能 和 最有可能 出 現的後果，判斷風險及自己的承受範圍後, 才可以下決定。相反，如要做出 即時決定 ，我們只能靠自己的直覺 (Heuristics) 作最快的計算來得出結果。 2) 樣品數量太少，不夠代表性 時 (Number of samples is too small to be representative)。因為數量太少我們不能依賴數據分析，得出 statistical significant 的機會率來協助做決定。在 沒有曆史數據或太少數據 的情況下，我們只能夠用 Uniform Distribution 來形容機率分布。亦即是說，假定是相同機率。Refer to < Principle of Insufficient Reason > 要知道， 可思考的時間愈短，犯錯的機會愈高 。因為時間充裕，你可以反覆思考關鍵條件，例如，需要甚麼的條件會導致災難，甚麼條件會是成功？那你可以轉注那些關鍵條件的出現。但若然要當下做 即時決定 ，可用 直覺 並以 保守 為原則來作決策。(保守的意思是盡量減低風險。) 若要運用到捷思來做即時決策時，最好要假設這個決策有佷高可能性會出錯，想像其後果，自己能否承受？若非，最好還是 Status quo。 即時決策可能只有數分鐘內便要下決定，請不要在這類性況下，作重