A review of “How to Make Rational Decisions in the Face of Uncertainty” by Cheryl Strauss Einhorn
By Kevin Howard
Decision making on any level, from complex work-related tasks to simple daily life choices, can be an uphill battle for some.
The uncertainty caused by the COVID-19 pandemic complicates decision-making further by adding new layers of consideration. Cheryl Strauss Einhorn outlines four ways to help make more rational decisions during the pandemic in her article, “How to Make Rational Decisions in the Face of Uncertainty.”
STEP 1: PINPOINT HISTORICAL DATA USE
In the first of the four steps, the author describes how to identify the type of historical data needed for rational decision making. Historical data may be salient, contextual, or patterned.
Salient data includes noteworthy or surprising information that is particularly relevant for the scenario being analyzed. Contextual data provides context to a situation and is gleaned from the environment via interactions and other communication forums. For example, contextual data would explain that a customer who declined a service had a negative past experience with that service, leading them to decline today. Patterned data analyzes a set of information and identifies patterns that may be helpful with future decision making.
Gathering and using historical data that is either salient, contextual, or patterned is a critical first step in having the necessary information to help guide decision making.
STEP 2: FIND COGNITIVE BIASES
While having access to these different types of data, the author advises that each has the possibility to trigger biases. To minimize these biases, identify the data type and its related bias.
Salient data can show us salience bias, which occurs when we give more weight to new or noteworthy information. To illustrate a point about incomplete data and its effect on decision making, she highlights that the 94.3% plunge in airline passenger demand in April 2020 due to COVID-19 restrictions is shocking, but can’t be used to infer anything about the future of air travel.
Contextual data can restrict our thinking and lead to framing bias, which is when a decision is made in response to how the information was presented rather than the facts alone. For example, a customer may decline a service that is billed as “platinum” on the assumption that it must be expensive to be considered “platinum,” when in reality the service is affordable. Because of how the information was presented—as a luxury status—the customer assumed it was costly and declined without knowing the actual cost or value—the facts—of the service.
Patterned data can showcase clustering illusion, a process where we perceive random events as a way to predict future events. Our brains are wired to find patterns, even when they don’t exist.
These different biases must be considered and managed to make rational decisions.
STEP 3: WORK BACKWARD TO IDENTIFY WHAT YOU NEED TO KNOW
The third step in the rational decision process is to identify what information you need the most in your decision making. Do this by thinking of the desired end result of your decision and invert your problem solving—that is, consider what would need to happen in order to achieve the desired result. Evaluate historical data to help identify outcomes or trends that led to desirable and less-desirable results and use that historical data to guide your decision. Working backward can help you better forecast, plan, and estimate outcomes of decisions.
However, the author also notes that it is important to remember that using historical data to guide decision making can lead to “delusions of control” and neglect the reality that there are inherent unknowns in any scenario. Accepting that there are things you can not predict and know can help you be a more confident decision maker ready to accept any outcome.
STEP 4: USE THE RIGHT QUESTIONS
Crafting questions to help make decisions can be difficult. The author advises readers to organize questions into four main categories: behavior, opinion, feeling, and knowledge. Asking questions from each of these angles allows you to bring in a variety of perspectives in how you look at your data. Evaluating decisions from different perspectives allows you to tackle assumptions and judgements and provides better context for interpreting the different answers you will receive.
Making decisions can be an overwhelming process complicated by COVID-19 or other factors. To make the most rational decisions both at work and at home, consider adopting this four-step process.
Kevin Howard is a staff writer for PPS. He may be reached at email@example.com.