Does it make sense? Can I explain the rationale?
Decision Focus 07 - Sound Reasoning with Weight and Rate Tables
Reasoning is the process of combining alternatives, information, and values to arrive at a decision.
It completes the sentence, “I am choosing this alternative because…“
Choosing an alternative for an important decision just because it feels right is not enough. Sound reasoning requires an explanation or rationale. For example, we can say we are choosing an alternative because it involves less risk and is better for people we care about than the other alternatives available. To back up this choice, we can articulate the alternatives considered, information taken into account (including risks), values and trade-offs considered, and method for combining all these to arrive at the chosen alternative.
Poor reasoning leads to poor decisions. For example, people frequently assume the upside is more likely and ignore the downside, e.g., “I’ll never get into an accident. Therefore, I’ll save money by not buying car insurance.”
How to reason soundly
- What is my approach to comparing and selecting my best alternatives?
- Is my analysis and selection among the alternatives consistent with my information and values?
- How could I explain this choice to others?
- Should I drop any alternatives for ethical reasons?
Ask your head
- Why is this the best alternative?
- What would it take to switch to another alternative?
- Have I used probabilities to describe uncertainty?
Ask your heart
- Do people I trust, respect, and/or care about agree with my logic/rationale?
- Does the answer feel right? If not, why not?
Tools and good practice
- List of pros and cons for each alternative
- Decision and probability trees
- Influence diagrams
- Computer/spreadsheet models, simulation
Traps to avoid
- Ignoring possibilities, “It won’t happen to me”
- Assuming there’s no uncertainty in potential outcomes
- Misinterpretation of factual information
- Ignoring information, alternatives, or values
- Relying on irrelevant information (e.g., sunk cost, regrets)
- Wishful thinking, “Because I want it, it will happen”
- Doing what I know how to do and ignoring something difficult but important
- Making logical errors
- Paralysis by analysis