Decision Making

The Bounded Mind ← Series Home The Illusion of the Perfect Agent For generations, the archetypal manager was envisioned as a perfectly rational agent: a decision-maker equipped with flawless logic, infinite time, and endless computational capacity, whose sole aim was to maximize utility. This ideal, often rooted in classical economic models, placed instinct, emotion, and intuition in a corner of shame, separate from the pristine domain of analysis. Yet, the experience of modern leadership—especially amidst tsunami-like spikes of volatility, uncertainty, complexity, and ambiguity (VUCA), such as the 2020 pandemic—has rendered this classical image obsolete. We all possess the capacity to think, much as we know how to run, but aiming to win a marathon rather than merely catching a bus requires a structured method to upgrade our processes. The central paradox facing the contemporary manager is reconciling the myth of unbounded, flawless calculation with the messy reality of the “bounded mind”. The question is not whether we can achieve perfect rationality—we cannot—but how we can successfully integrate our inescapable limitations with a disciplined framework. ...

The Architecture of Choice ← Series Home The Scarcity of Attention The world of our hunter-gatherer ancestors was brutal, yet in one critical aspect, it was elegantly simple: survival left little room for contemplation of myriad options. When they ran out of game, they hunted; they ate whatever they could gather before it spoiled; and the extraordinarily violent nature of their environment meant few individuals worried about future careers or retirement savings. Their lives, though harsh, put relatively few cognitive demands on their brains. ...

Human Factory Settings: The Psychology of Conviction and Influence 1 Human Factory Settings - Part 1: The Chemistry of Conviction: Why We Are Wired to Be Swindled 2 Human Factory Settings - Part 2: Your Mind's Blind Spots: The Illusion of Rational Choice 3 Human Factory Settings - Part 3: The Charisma Algorithm: The Six Pillars of Influence ← Series Home The Illusion of Omniscient Choice The traditional economic view posits the ideal decision-maker—Homo economicus (Econ)—as a dispassionate, objective actor who makes faultless forecasts and rational choices, unfailingly optimizing outcomes by diligently weighing all evidence. This model, which often shapes policy prescriptions, assumes that if citizens are simply given the widest possible range of choices, they will naturally select the best possible outcome for themselves. Yet, decades of evidence demonstrate that this vision is a profound fiction. Humans are routinely fooled by visual illusions and predictable cognitive biases, confirming that our subjective reality diverges sharply and systematically from flawless calculation. ...

When Disaster Strikes 1 Part 1: Disasters Don't Create Inequality-They Reveal It 2 Part 2: Why Some Cities Burn (And Others Don't) 3 Part 3: The Sacrifice Calculus 4 Part 4: Elite Disaster Strategies 5 Part 5: Famine and Political Power 6 Part 6: Earthquakes and Governance 7 Part 7: Pandemic Politics 8 Part 8: Why We Forget ← Series Home Key Takeaways Triage is always happening: Disasters make explicit the resource allocation decisions that are implicit in normal times. Infrastructure is frozen triage: Decisions about levees, evacuation routes, and hospital locations pre-determine who can be saved. The "natural" framing hides choices: Calling disasters "natural" obscures the political decisions that shaped who became vulnerable. Sacrifice patterns are predictable: The poor, the elderly, the disabled, and the politically marginalized consistently bear the highest death rates. The Impossible Choice In the five days after Hurricane Katrina struck New Orleans, Dr. Anna Pou faced decisions no physician should have to make. At Memorial Medical Center, cut off from evacuation, without power for air conditioning or most medical equipment, she and her colleagues worked to keep patients alive. ...

The Logic of Successful Systems Decisions 1 The Logic of Successful Systems Decisions - Part 1: Defining Decision Quality and the Systems Imperative 2 The Logic of Successful Systems Decisions - Part 2: Problem Definition: Solving the Right Challenge 3 The Logic of Successful Systems Decisions - Part 3: Solution Design: Engineering Creativity and Feasibility 4 The Logic of Successful Systems Decisions - Part 4: Decision Making: Quantifying Value, Risk, and Tradeoffs 5 The Logic of Successful Systems Decisions - Part 5: Solution Implementation: Delivering the Promised Value ← Series Home Monte Carlo Simulation method to assess risk profiles and value uncertainty ...

The Engineering Journey ← Series Home The Road from “Want” to “What” The design journey, as we have established, is a systematic methodology for solving problems, leading to a quality product. Yet, the ultimate success of any design often hinges on overcoming a fundamental challenge: the translation of subjective, often vague, human desires into objective, measurable technical specifications. A customer might say they want a backpack that is “lightweight” and “durable,” but an engineer needs to know: “How much is lightweight?” and “How many years is durable?” ...

Audit Your Instincts: The Playbook for Engineering Unbiased Decisions The Hidden Trap in Your Brain Every day, you make countless decisions—from what to eat for lunch to which job offer to accept. For the most part, your brain uses a phenomenal shortcut system, which Nobel laureate Daniel Kahneman called System 1. This system is fast, intuitive, and runs on gut feeling. It’s efficient, but it’s also the source of predictable errors known as cognitive biases. ...

The Psychology of Scarcity & Abundance 1 The Psychology of Scarcity & Abundance - Part 1: The Scarcity Mindset's Paradoxical Power 2 The Psychology of Scarcity & Abundance - Part 2: The Bandwidth Tax: Scarcity Makes You 'Dumber' 3 The Psychology of Scarcity & Abundance - Part 3: The Scarcity Trap: Borrowing from Tomorrow 4 The Psychology of Scarcity & Abundance - Part 4: The Necessity of Waste: Why Slack Saves You 5 The Psychology of Scarcity & Abundance - Part 5: The Attention Famine in the Content Feast ← Series Home 2x More Likely Low-income shoppers think about trade-offs before buying—becoming experts in value ...

The Psychology of Scarcity & Abundance 1 The Psychology of Scarcity & Abundance - Part 1: The Scarcity Mindset's Paradoxical Power 2 The Psychology of Scarcity & Abundance - Part 2: The Bandwidth Tax: Scarcity Makes You 'Dumber' 3 The Psychology of Scarcity & Abundance - Part 3: The Scarcity Trap: Borrowing from Tomorrow 4 The Psychology of Scarcity & Abundance - Part 4: The Necessity of Waste: Why Slack Saves You 5 The Psychology of Scarcity & Abundance - Part 5: The Attention Famine in the Content Feast ← Series Home Payday Loans High-interest loans seem attractive under scarcity—costs fall outside tunnel vision ...

The Psychology of Scarcity & Abundance 1 The Psychology of Scarcity & Abundance - Part 1: The Scarcity Mindset's Paradoxical Power 2 The Psychology of Scarcity & Abundance - Part 2: The Bandwidth Tax: Scarcity Makes You 'Dumber' 3 The Psychology of Scarcity & Abundance - Part 3: The Scarcity Trap: Borrowing from Tomorrow 4 The Psychology of Scarcity & Abundance - Part 4: The Necessity of Waste: Why Slack Saves You 5 The Psychology of Scarcity & Abundance - Part 5: The Attention Famine in the Content Feast ← Series Home 13-14 IQ Points Cognitive decline from scarcity—equivalent to losing a night's sleep ...