As I was getting ready for the office (on zoom), I went to pick up my shirt. The blue shirt. Wait, will the white be better. How about the black t-shirt instead. We make decisions like these all through out our lives. These are important and relevant decisions for some of us, while some of us don’t even give them a second thought. To do away with making these routine decisions, Steve Jobs always sported black polo necks, Mark Zuckerberg is usually in a black or navy hoodie which he sometimes removes to reveal a grey T-shirt, Barack Obama wore only grey or blue suits, Sir Richard Branson wears the same pair of jeans and Elizabeth Holmes of Theranos (ill-)fame always wore black polo necks like Steve jobs.
Decisions we make can be routine ones that have a low impact or important ones that significantly impact our lives, and there are many in-between. So, how do we go about making these decisions? How do we ensure we are making the right decision? How do we know we are not making a mistake, an error?
In the real world, we never have complete information. Consequently, there will always be errors in our decision making. Let’s understand this with a real-world illustration. You are planning a vacation and have to undergo a COVID test before the airline allows you to board. Since no test is 100% certain, here is a simplistic representation of what follows:
The lower left box is a false positive since you don’t have the bug, but the result says you do. The airline doesn’t allow you to board, and you have to skip your vacation due to an error in the testing lab. This error is a Type 1 Error. The top right box is a false negative since you have the bug, but the result says you don’t. You are on your way to the much-awaited vacation but unknowingly infecting folks around you. This error is a Type 2 error.
As you can imagine, type 2 error seems like a serious matter, and we should avoid it. How? This is where probability steps in. A lab gets the test done by fixing a specific probability level for type 1 errors at a certain level, A and a certain probability for the occurrence of type 2 error, B. The lab can get stricter on its testing policies by having a zero-tolerance for type 2 error, but this will mean a lot more type 1 error occurring. Now we have a lot of people feeling miserable as they end up missing their vacations even though they didn’t have COVID.
Oprah: Nothing happens until you decide. Make a decision and watch your life move forward.
There is an obvious give and take here, a compromise. We have to arrive at a sustainable balance that doesn’t spoil the vacation for many people. For the sake of simplicity, let’s say that eliminating type 2 error would mean 10 units of type 1 error and elimination of type 1 error would mean 10 units of type 2 error on a scale of 1 to 10. It’s a sliding scale. Take a moment here: if you had to make this decision of how much of which error would be palatable, what would your verdict be? You can be at any point on this sliding scale from 1 to 10.
The message is clear: decision making is part of our lives, day in and day out. There are simple decisions to make and life-changing ones too. There is always a compromise involved. It is imperative that we start excelling at making good decisions as that leads to a life well-lived, a successful life.