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Decision Frameworks

Common frameworks used to assist the decision making process.

Schema​

NABC​

Use Need Approach Benefit Competition to decide whether to start a journey.

  • Need: Frame the problem.
  • Approach: Engineer a plan.
  • Benefit: Quantify risk versus reward.
  • Competition: How sustainable are benefits?

SOTAP​

SOTAP Medical

  • Subjective
  • Objective
  • Treatment
  • Analysis
  • Plan

Six Hats​

Look at a decision from different perspectives lenses so that you don't overlook an important aspect.

Definition | Archetypes

Second Order Thinking​

  • What is the range of likely future outcomes?
  • What outcome do I think will occur?
  • What's the probability I'm right?
  • What does the consensus think?
  • How does my expectation differ from the consensus?
  • How does the current price for the asset comport with the consensus view of the future, and with mine?
  • Is the consensus psychology that's incorporated in the price too bullish or bearish?
  • What will happen to the asset's price if the consensus turns out to be right, and what if I'm right?

Definition

Confidence vs Speed and Quality​

In product development, speed and quality are two important variables. Prioritizing one is typically at the expense of the other. This tool will help you make that trade-off.

Definition

Eisenhower Matrix​

A prioritisation framework will help you organize your tasks and activities by importance and urgency.

Definition

Payoff Matrix​

Choose the best option by considering multiple factors. A payoff matrix is a way to express the result of players' choices in a game. A payoff matrix does not express the structure of a game, such as if players take turns taking actions or a player has to make a choice without knowing what choice the other will make.

Definition | Payoff Matrices

Hard Choice Model​

The hard choice model can help you see the kind of a decision you're making – whether it's a no-brainer, a hard choice or something in between. It will enable you to move forward with your decision.

Definition

Ladder of Inference​

We act and make decisions based on the conclusions we make. But we tend to jump to these conclusions and skip important parts of the reasoning process.

Definition

Markov Tree​

Markov Decision Process (MDP) is a foundational element of reinforcement learning (RL). MDP allows formalization of sequential decision making where actions from a state not just influences the immediate reward but also the subsequent state. It is a very useful framework to model problems that maximizes longer term return by taking sequence of actions.

Definition