Indecisiveness is frustrating and debilitating.
I am most frustrated when I find myself being indecisive about things that don’t matter, like what to have for dinner or choosing a parking space. These things won’t make a difference to my life tomorrow or in a week’s time.
Being decisive can be daunting in the moment especially when faced with numerous options and the fear of making the wrong decision.
But you know all this and, like me, experience it.
In this volume of Decide, I want to explore a few fascinating decision-making topics related to the optimal stopping theory:
- The 37 percent rule
- The secretary problem
- The explore vs exploit tradeoff
My hope is with these tools in hand, you’ll be equipped to overcome indecision and find a happy medium between gathering information and taking action, leading to better outcomes in your decisions.
Let’s dive in together.
Optimal stopping theory
Optimal stopping is a decision-making theory that aims to maximise the chances of selecting the best option from a series of choices, without the ability to return to previously rejected options.
The concept is often used in scenarios where we need to make a choice based on limited information and time.
The challenge lies in determining the optimal point at which to stop reviewing options and make a decision.
If we stop too early, we risk missing out on a better option. On the other hand, if we wait too long, we may lose the opportunity of the best option because it becomes no longer available.
The 37 percent rule
Imagine facing a multitude of options, unsure of which one to choose.
The 37% rule provides a method to alleviate the burden of choice and to enjoy a better outcome more efficiently.
By sampling and evaluating approximately 37% of the available options, you establish a benchmark.
This calibration period allows you to identify what works and what does not.
If a subsequent option surpasses the benchmark, it becomes the one to pursue, maximizing your chances of a favourable outcome and saving you time by not having to explore further options.
“If you want the best odds of getting the best apartment, spend 37% of your apartment hunt (eleven days, if you’ve given yourself a month for the search) noncommittally exploring options. Leave the checkbook at home; you’re just calibrating. But after that point, be prepared to immediately commit—deposit and all—to the very first place you see that beats whatever you’ve already seen. This is not merely an intuitively satisfying compromise between looking and leaping. It is the provably optimal solution.”
Brian Christian
The secretary problem
The Secretary Problem offers valuable insights into hiring the best candidate among a series of applicants.
The tricky part comes in reaching the middle ground between exploring candidates and committing to the right one.
By interviewing and rejecting the initial 37% of candidates, you establish a benchmark based on the best-so-far candidate.
Beyond that point, the optimal stopping theory suggests you should hire the first candidate who surpasses the benchmark, maximising your chances of selecting the best overall candidate.
The explore vs exploit tradeoff
Life presents us with the eternal dilemma of exploring new options versus exploiting known ones.
Exploring too much can lead to scattered efforts and missed opportunities for mastery, while exploiting too much promotes stagnation and limits growth.
The key is finding the point of balance where you gain the benefits of exploration while capitalising on the rewards of exploitation.
For example when job hunting:
Explore: You have multiple job oppourtunites on the table. Research companies, talk to employees, and evaluate benefits to gather information.
Exploit: After exploring, you’ve shortlisted three appealing oppourtunites. Do you decide whether to explore more or choose one of them. Time is limited and you need a new job.
The Tradeoff: Balance exploration and exploitation. Continue exploring to gain insights but don’t miss out on good opportunities. Commit to the best-fit job with confidence.
“We all need to decide whether to “play it safe” in life and worry about the downside, or instead take a chance, by being who we really are and living the life our heart desires. Which choice are you making?”
Charlie Badenhop
To conclude, my hope is that armed with these concepts, you can save time while navigating the complexities of decision-making.
Remember, indecision often stems from the fear of making the wrong choice, but by trying these strategies, you can overcome that fear and make choices that align with your values and goals.
As you move forward, I encourage you to put these strategies into practice.
Identify an upcoming decision or one you’ve been grappling with and apply the 37% rule.
Take the time to explore and evaluate a significant portion of your options, but be prepared to commit when a subsequent option surpasses your benchmark.
Lean into the excitement of finding the best outcome, knowing that you’ve found harmony between exploration and exploitation.
Enjoy the rest of your Wednesday, and I’ll see you next week.
Ty
P.S. Say hey on Twitter.
