One class I’m taking this quarter is ECON137: Decision Modeling and Information. Taught by the legendary Scott McKeon, this class focuses on the deterministic side of Economics – given some information, figure out the right decision a person should make. With this decision analysis comes a philosophical quandary: should we as a society reward decisions, or outcomes?
All too often, we can empirically observe that our society gives more weight to the outcome of an uncertainty than the process of a decision. Listen to how people phrase things in your life, and I guarantee you’ll hear something along the lines of “he/she made the wrong decision,” after an undesirable outcome has occurred. The difference may feel subtle, but it plays a fundamental role in how we perceive the world. We applaud a game show contestant for making a risky decision when it pays off handsomely, but disparagingly deride their choice as the “wrong decision” a bad outcome occurs. On the eve of the 2016 United States presidential election, many people were thourougly convinced of the predictive accuracy of Nate Silver and FiveThirtyEight, until an unexpected election result led people to question his statistical acumen.
In life, people have a bad habit of applauding those who are lucky over those who make informed decisions. We wait until after uncertainties are resolved before passing our judgement, when applause should be given to the person who makes a logically sound choice before the uncertainty becomes an outcome. This is a nice lesson to take to the business world: the person you should praise is the one who made the right decision and ended up with the bad outcome, rather than the person who made the wrong decision and lucked out with the good outcome.
I’ve certainly been guilty of applauding a good outcome over a good decision many times, and I’m sure I’ll do it again. In the meantime, I’m going to make an effort to celebrate the someone who spends time thinking through their uncertainties, regardless of what the eventual outcome may be.