Free ebook
How to decide
Nobody teaches you how to decide. This free ebook shows you, one picture at a time: where your brain gets a decision wrong, how to put a number on an option, and what to do when you are stuck or two options look the same.
- 0136 ideas, each with a figure that shows the mechanism, not a paragraph about it
- 02Worked numbers you can reuse: a $100K NPV, a launch decision tree, a job-offer matrix
- 03A one-page cheat sheet: every tool and the one question it answers
- 04Read it in your browser, or download the 60-page PDF
What's inside
- Part 1
Your brain on decisions
Narrow framing, loss aversion, uncertainty aversion, System 1 and 2, the halo effect, utility.
- Part 2
Put a number on it
ROI, opportunity cost, compounding, NPV and its limits, sunk cost.
- Part 3
Biases in the data
Confirmation, anchoring, linear, survivorship and selection bias, mutual causality, regression to the mean.
- Part 4
Principles
Judge the decision, not the outcome; keep it simple; AI helps, you decide; bring in people who disagree.
- Part 5
Deciding under uncertainty
Expected value, decision trees, sensitivity analysis, decision matrices, utility, predictive analytics.
- Part 6
Before the spreadsheet
The Einstellung effect, first principles, the pre-mortem, second-order thinking, Buridan's donkey.