Welcome to the second of what will be a recurring decision-making workshop. Making good decisions is synonymous with being effective in the world. The art of accurate decision-making is at the intersection of epistemic rationality (understanding the world) and instrumental rationality (taking action).

There is no pre-workshop reading or assignment. The following instructions apply to the cohort meeting.

Non-facilitators should avoid reading spoiler blocks — such as the one below — since they will contain answers and instructions for the facilitator.

## Warm Up [35 minutes]

### Review [5 minutes]

First, let's recall the steps to building a decision tree:

- List the options.
- List the critical variables.
- Bin the possible outcomes.
- Rank the possible outcomes.
- Assign utility values to all outcomes. (Use the Certain Equivalent trick to find utility valuations in situations where you're very uncertain of what the values should be.)
- Build the structure of your decision tree for one option.
- Assign probabilities to the tree branches.
- Calculate the expected value of each option. The option with the highest EV is the best option.
- Reflect on the decision. Does that feel right? If not, why not? Which of your probabilities or utility valuations are "wrong"?

Many have found Steps 1 and 2 to be the most difficult to employ in daily life, because these steps require subjective evaluation of ambiguous, muddy, or emotionally charged situations. Thus, we will practice quickly breaking down some mundane real-life scenarios into options and critical variables, but not going any further in the process.

If you're having trouble identifying the options and critical variables, remember that:

**options**are the elements that you have control over**critical variables**are the important uncertainties in the situation.

### The Party Problem [10 minutes]

You are holding a birthday party at your house later this afternoon. You need to start setting up the pinata and party games, but you're not sure where to do it. You enjoy the outdoors, and would like to hold the party in your backyard, but the sky looks a bit dark to the east, and you're concerned that it might rain.

Perhaps you could hold the party on your screened-in porch? You're not sure if it's big enough to comfortably accommodate all the guests, so perhaps you could set up in your living room instead.

Break this problem down into options and critical variables.

### Cooking [10 minutes]

You are hosting a gathering of friends at your home and would like to cook a meal for them. You want to impress them with your cooking skills. Your specialty is seafood gumbo. However, you're not sure if all your friends like seafood.

You also make a pretty good spaghetti and meatballs, but, while this would be delicious, you don't feel like that would be very impressive. You've cooked gourmet pizza before but you're not confident that it will turn out perfectly.

Break this problem down into options and critical variables.

### Job Interview [10 minutes]

You are on your way to an important job interview when you notice that your car's gas tank is dangerously close to empty. You are currently on the freeway and don't know where the nearest gas station is.

Break this problem down into options and critical variables.

## Main Activity [45 minutes]

### Choose Decisions [10 minutes]

Each cohort member should put forth a decision that they are thinking about. The decisions can be big or small. Whether you're pondering a change in career, waffling on whether to upgrade your PC, or deciding whether to dye your hair, if it's something you're having trouble making your mind up about, it's a valid decision to discuss. Everyone should put forth *something*.

### Decomposition [20 minutes]

Set a timer for this section. Everyone will now individually break their decision problem into a small number of choices, outcomes, and distinctions, attempting to build the structure of a decision tree. I suggest using Google Sheets or Slides for sharing purposes. **Do** **not** **worry about the probabilities or utilities at this point, only concern yourself with the structure.**

Aim for no more than 3 possible choices, and no more than 2 levels of distinction, each distinction having no more than 3 possibilities each. (3 choices with 2 distinctions at 2 possibilities each already results in 12 outcomes!) In other words, try to write down your decision problem as simply as possible without losing anything important. Your object is to create a tree that *communicates* your decision problem *clearly and effectively*.

### Sharing [15 minutes]

Return to the cohort session and share your decision tree. Describe your thought process in designing the tree. Remark upon whether you felt the exercise was helpful/clarifying in coming to a decision. The group should provide feedback, especially if something seems to be a mistake.

### Wrap up

If there's time remaining, begin filling in your outcome utilities and branch probabilities. If not, then consider completing the trees on your own time, if you conclude that it would be valuable to do so.