Making decesions

            Decision making has never been an easy process, there are so many “what if’s” involved in the decision making process. In our text it describes a way to put these “what if’s” into a sort of mathematical formula which might help us decide what is the best path to take when making decisions.

            The first step in the decision making process according to our text is to make an accumulation of knowledge. A firm which is trying to make a decision on which company they choose to use in a partnership might go through a trial period. Through a trial period a company can gain data on a certain service which they are receiving from a company. In the example used in the text a company is torn between two different providers, they are uncertain of who will give them the best coverage. The formula in the text works well because they use this trial period to make an educated guess on who will be the best provider.

            Once this firm has gone through the trial period they can then apply this knowledge into the formula which researchers use to solve multistage problems. They take the facts that they have on a prior providers potential for one year and then they take the accumulation of knowledge from the second provider and apply the potential for profit in one year. Once their formula is in place they are able to use information to decide if the new provider will offer them better coverage which will in turn give them a higher potential for profit.

            This is an interesting way of looking at decision making, in some ways we all use formulas when making decisions. In life we weigh the pros and cons of a decision and then come to a conclusion. I think that a lot of the decision making I make in life are either split second decisions done without much thought of decisions based on my passed experiences. During my decision making process I also incorporate how my feelings are on certain subject matter, it is usually an uneducated guess when I make decisions in this matter; this would be an optimal way of making decisions.

            I do believe that the formula in which researchers solve multistage problems would truly improve the types of decisions that I usually make. I think that if I actually get an accumulation of knowledge at the beginning of each decision that I make; I might see things in a much clearer light. As humans we make brash decisions and base them on emotional content rather than knowing the facts. If we take the time to stop and think about the future outcomes of our decisions instead of living in the now; better choices can be made. If I were to use this formula it would also increase my ability to succeed at forward planning, “studies find that people generally can plan no further than just one step beyond the current decision” (Wharton).

            One thing that I have found myself very interested in lately is current events and politics, I think that when you look at the politics of a country you can see where the future is headed. If I am using optimal dynamic decision analysis I am able to understand the future a bit better by looking at current events. Many times decision makers use these techniques to understand which route might their investments take based on the world around us. This is definitely a technique which would be very valuable to me, I would definitely apply this technique to the way that I make decisions for a company or myself. If we pay attention to current events we are empowering ourselves, to know the future one must have a good understanding of the past and present. I believe that if I am making decisions using this technique than I can break the pattern which many people have of not being able to think one step ahead.

 

Reference:

Hooch, S., & Keunruther, H. (2001). Bumbling Geniuses: The Power of Everday Reasoning in Multistage Decision Making. In Making Decesions (1 st ed., Vol. 1, p. 45). Hoboken: John Wiley and Sons.