With technological advancements, there is more and more available information at a cheaper cost (actually information nowadays is free). Also, technology also gives us the impression that we live in a world that we can control. All it takes is enough information and we’ll be able to be successful in business. That is why you need to have the latest news, the newest gadget and follow the latest trend.
This kind of approach can live you astray! As you get access to more and more information, this also improves the noise exponentially. Thus, rather than getting better at making decisions you become way worst. With an even worse consequence: you’re not aware of that. The fact that you have a lot of data makes you believe that you know best.
Therefore, I believe there are three aspects to take into account in the modern, seemingly fast-changing world:
- have at your disposal a simple yet effective toolset for decision-making in the real world
- develop the ability to ignore information that isn’t needed
- know when to trust your gut feelings rather than relying on complex models
In this respect, three books can help you with that. Two books are from Gerd Gigerenzer, a German psychologist who has studied bounded rationality and heuristics in decision making. The third is from Nicholas Nassim Taleb, author of The Black Swan and the Incerto Book Series.
Risk Savvy: How to Make Good Decisions
In the past century, the leap forward for humanity was to teach to most of us how to read and write. If that was enough in a modern world where information was still scarce. Nowadays with the advent of social media and the increasing speed of the internet, there is another tool that anyone has to master to survive: statistical thinking. Risk Savvy helps you build the toolbox to become a better statistical thinker. Or to ask better questions that allow you to navigate through the noise of the modern world:
Gut Feelings: The Intelligence of the Unconscious
This book is an excellent introduction to the concept of bounded rationality and heuristics. It is also a fresh perspective on decision-making. Where current prevailing cognitive psychological theories focus on our biases and cognitive errors, this books focuses on why instead those heuristics make a lot of sense. In fact, gut feelings which are seen quite skeptically in the world of academia and corporations where big words are looked with more respect. This book shows you why gut feeling matters in business as in life:
Skin in the Game: Hidden Asymmetries in Daily Life
Skin in the Game is the bible for understanding how to get along in a world that is plenty of hidden asymmetries:
If you have other recommendation on unconventional books about decision-making, feel free to comment below.