Probability
Play games that teach decision analysis through probabilities and risk management.
Bets gamify commitment to focusing attention.
- Explore or exploit?
- One-way or reversible?
Bayesian
Always update your beliefs in light of new information.
- Use a Bayesian approach to decision-making. This involves weighing new information against your prior beliefs to come up with a new set of beliefs.
- Be aware of the potential for information asymmetry. This is when one party in a transaction knows more than the other party. When facing information asymmetry, it's important to try to build out your research capabilities and be willing to update your beliefs in a Bayesian way.
- Get feedback from others. Talk to people who you trust and respect to get their input on your decision.
- Don't be afraid to change your mind. If you learn new information that changes your perspective, don't be afraid to go back and make a different decision.
Bayesian decision theory and Game Theory share a common decision rule—maximizing expected utility—in decisions under risk—where the problem includes a well defined probability for all states of affairs. However, in decisions under uncertainty—where no such probability is given by the problem, which includes traditional problems of game theory—Game Theory insists that rational players satisfy an equilibrium criterion instead. Strategies for different players form a (Nash) equilibrium when, simultaneously, each is a best reply against the strategies adopted by the opponent(s)
Use Bayesian Thinking to understand the probability of certain scenarios playing out and adjust capital position to risk profile.
Your ego is the enemy when it comes to making good decisions
Execution
Knowns vs Unknowns. Plans vs capability to deliver by invention.
Any decision is only as good as your organisations ability to execute adequately to meet desired benchmarks that deem the experiment a success.