INTRODUCTION to "AI ADVISERS" and COMPUTER-AIDED DECISION-MAKING

ARE WE IN CONTROL OF OUR OWN DECISION-MAKING?

How are decisions made where you work? In your personal life? In government and politics?

Are we really in control of our own decision-making?

Is it a completely objective, fact-based, unemotional process? 

(If you answered "YES" you are almost certainly WRONG!)

EMOTION generally plays a key role in virtually all decision-making. As I was taught in IBM Marketing School "You buy WHAT you like from WHO you like!"


The image is from a great TED talk that asks the question: "Are we in control of our own decisions?"

The answer is NO!

This TED talk clearly demonstrates how our emotions and other non-rational factors control our decision-making much more strongly than reasonable logic.

For example, the person on the far left is "Tom" and the one on the far right is "Jerry". The figure in the top middle is a distorted version of "Jerry" to make him look ugly. The middle bottom is an ugly version of "Tom".

When presented with the top form, and asked who they would date, most picked good-looking Jerry. When shown the bottom form, they picked good-looking Tom. Amazingly, the ugly choice totally changed the results of the selection process!

The TED presenter, Dan Ariely, uses several other examples to show how our decision process may be totally altered by the presentation of undesirable, non-chosen alternatives.

HOW DOES THIS BEAR ON PROFESSIONAL DECISION-MAKING?

Well, if a decision is close between two alternatives, which is always the case for hard decisions in business (or the Supreme Court, where, by definition, cases are almost always close choices), a good strategy could be to introduce a slightly "ugly" version of the choice you want the deciders to make.

For example, a prosecutor could include the death penalty as an option, even if he or she thought a 20-year sentence is most appropriate. The "ugly" death penalty option would make it more likely the jurors would settle on a long sentence. Given a choice between 10 years and 20 years, they might pick 10. If the death penalty was added to the menu, they would be more likely to choose 20 years.

The other lesson I take from this TED talk is that professionals should adopt methodologies that, to the extent possible, exclude emotional factors.

FREE INTERACTIVE DECISION-AIDING "AI ADVISERS" YOU CAN USE

I have used Excel to construct several "AI Advisers" - Computer-Aided tools that you may use to reduce the emotional quotient in your personal and professional decision-making. They are all totally FREE (and well worth it :^).

Decision-Making In the Face of Uncertainty Utilizing Multiple Evaluation Factors and Weights

 my Decision tool "forces" the deciders to consider multiple factors and weights in reaching a decision.

Bayesian Inference (Inverse Probability)

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Nash Bargain (Setting the most advantageous price in a competitive market)

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Management Span of Control Based on Hierarchy Theory and Information Theory

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Visual Acuity

How big and what size fonts should you use for signs, PowerPoint presentations, and printed documents. How big should your new High Definition television display be in your living room, your den, your meeting room, etc.

Ira Glickstein

Bayesian Inference Adviser

Bayes Theorem has practical applications. Use it to make real world decisions.

Bayes Theorem is not just an obscure artifact of the statistics of probability handed down to us from centuries ago. You can use it now to make decisions that will affect your financial well-being.

A relatively simple Excel-based tool helps you choose the right course of action in the face of uncertain probabilities and inexact test results. It is available for FREE.

What can the Bayesian Inference Adviser Tool do for You?

I know you are probably not in the oil business (and neither am I), but the best way to understand an abstract concept is to go through a practical example. The example below has to do with oil exploration and drilling, but the Bayesian Inference Adviser can handle any problem where you know:

1) the probability of success if you take action without doing further testing,
2) the cost of further testing and the probability the test results will be reliable,
3) the cost of taking some action,
4) the financial benefit to you if the action is successful, and
5) the compensation you expect for taking the risk.

You can download the Bayesian Inference Adviser at:
https://sites.google.com/site/bigira/stuff-ira-knows/BayesianInferenceAdvisorV3.xls?attredirects=0&d=1

The Bayesian Inference Adviser will compute the most likely financial implications of your actions. What if you proceed without further testing? What if you get a positive test result and proceed? What if you get a negative test result and proceed? Several other examples in very different domains are included later in this posting, but for now, put on your hard hat and let us imagine we are in the oil business!