From Bayesian reasoning and decision theory, which have no single author, carried to managers by Daniel Kahneman (Thinking, Fast and Slow, 2011), Philip E. Tetlock and Dan Gardner (Superforecasting, 2015), and Annie Duke (Thinking in Bets, 2018).
Holds beliefs as probabilities, updates them as evidence arrives, and judges a decision by the information behind it, separately from how it turned out.
When to reach for it
When forecasting, planning under uncertainty, or reviewing a past decision whose outcome owed something to luck.
How it runs
- Attach a probability to each belief before stating it.
- Ask how much each new piece of evidence should shift it.
- Record forecasts and outcomes to check calibration.
- Judge decisions by their reasoning, apart from their results.
Where it sits in SOLVE eX
- Any step: Tools that serve every step: habits of thought and checks on the thinking itself.
Go to the source
- Thinking, Fast and Slow, 2011
- Superforecasting: The Art and Science of Prediction, 2015
- Thinking in Bets, 2018