Decision making is a multi-faceted subject. It goes beyond just deciding yes or no. As the resources below will show you, there are a number of ways to make decisions optimally.
Why do people do what they do? Behavioral economics seeks to combine economic theory and human behavior to answer why.
Daniel Kahneman is a giant in the field. Start with his work:
- Thinking, Fast and Slow is the book that won Kahnemann a Nobel Prize.
- Michael Lewis also wrote a book called The Undoing Project about Kahneman and his long time research partner, Amos Tversky. He does a great job of distilling Kahnemann and Tversky's theories in a way that can be understood by lay people.
- Noise: How to Overcome the High, Hidden Cost of Inconsistent Decision Making is a more recent article by Kahnenman.
We often think that we know what's best and it would be nice if we could just get people to see it our way. You can use subtle cues called "nudges" to push people towards what you want them to do.
- Nudge by Cass Sunstein is a great primer on nudging
- Economics, psychology, policy blog keeps up to date on nudging used in real life.
A niche area of decision theory is optimal stopping. Optimal stopping is meant to calculate the best point at which to stop seeking new choices and make a decision amongst your existing options. This is one of the few areas of mathematics where laypeople can understand the immediate significance of the concept.
- How I used mathematics to choose my next apartment
- If you have interest in the math, you can read this article.
- Algorithms to Live By is a great book that shows how you can use optimal stopping and other mathematical theories in your life.
No one is perfectly rational. By recognizing your cognitive biases, you can counteract the hidden impairments to making good decisions.
- The Cognitive Bias Cheat Sheet by Buster Benson is a great place to start.
- Root Out Bias From Your Decision-Making Process