A Practical Guide To Making Better Decisions

Your friends’ mother passes away.

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Source
  • Thinking in systems
  • Psychology

Probability

Thinking in systems & Psychology

Probability doesn’t work with complex systems because we have no idea about the range of possible outcomes.

Going beyond

Second-order is one step into the future. The principles are the same, if you want to go one level deeper, or eleven levels deeper. The deeper you go, the harder it gets. Anything after the second level in life becomes too uncertain. You’re multiplying small probabilities by smaller probabilities. This leads to even smaller probabilities for the events you’re considering. We get a long list of events that might occur, but we forget how small the probabilities are. This leads to analysis paralysis.

Second level problems

It’s not just your decisions that need second-order thinking. It’s your problems as well.

  1. The second level problem — the incentives
  2. The third level problem — the values

Written by

I write about Code and Life philosophies. Sometimes both. | https://neilkakkar.com | Engineer @Bloomberg | Write (Code). Create. Recurse.

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