How to Get Better at Making Decisions and Predicting the Future

We’ll also cover what you can do to put yourself in a position to make better calls and do a better job of predicting outcomes and assessing probabilities.The takeaway will be simple: If you do the right things, your decision-making ability will measurably improve — and a good number of those bad decisions can be changed for the better.A Decision-Maker’s Most Formidable Foe: UncertaintyThink about some of the decisions you’ve had to make in your life.If you went to college, you had to pick one..If you’re married, or engaged, you had to find a partner and decide to propose — or accept a proposal..In your job, maybe you had to decide what investment to make, or what actions to take..If you’re a business owner, you had to make a ton of important decisions that led to where you are today, for better or for worse.In every single one of those decisions, you didn’t know for sure what would happen..Even if you thought it was a 100% sure thing, it probably wasn’t, because there are few sure things in the world..When there is more than one possible outcome, and you’re not sure which one will occur, you experience something called uncertainty, and it can be quantified on a 0–100% scale (such as being 90% sure your partner is going to say yes to your proposal, or only 50% sure — the same as a coin flip — that your big investment is going to pay off.)Usually, hard decisions — the decisions that determine success versus failure — involve dozens of variables that lead to multiple possible outcomes..With each variable and potential outcome comes a great deal of uncertainty — so much at times, in fact, that it’s a wonder decisions are made at all.In short, we deal with uncertainty every single day, with every decision we make..The tougher the decision, the more uncertainty — or, should we say, the more uncertainty, the tougher the decision.Being better at assessing probabilities, making decisions, and predicting the future is all about reducing uncertainty as much as possible..If you can reduce the amount of uncertainty you face, whether you’re figuring out how likely something is to happen or trying to predict what will happen in the future, you’ll be more likely to make the right call.The trouble is, humans are bad at assessing probabilities and predicting the future..Research has shown why this is the case..Daniel Kahneman, with Amos Tversky, won a Nobel Prize in Economics for showing how humans are subject to a wide array cognitive biases based on how much we rely on erroneous judgmental heuristics.Researchers Baruch Fischhoff, Paul Slovic, and Sarah Lichtenstein found that humans are psychologically biased toward unwarranted certainty, i.e..we tend to be overconfident when we make judgments due to a variety of reasons, such as our memories being incomplete and erroneously recalled.. More details

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