MEPX
Chapter 4 of 10All chapters
  1. 1Process over outcome
  2. 2Matching effort to stakes
  3. 3Framing the decision
  4. 4Working with uncertainty
  5. 5Where judgement bends
  6. 6Deciding in groups
  7. 7When to gather more
  8. 8Committing and changing course
  9. 9Personal decisions
  10. 10Reviewing decisions

Chapter 4 of 10

Working with uncertainty

Probabilities and base rates.

Start from the outside

Ask how similar cases usually turn out before reasoning about why this one is different. The reference class beats the narrative more often than people expect.

  • Most projects overrun; assuming yours will not needs a reason.
  • Express confidence as a number to make it checkable later.

Expected value

Multiply each outcome by its likelihood and compare. It is the right frame for repeated decisions and needs care where a single bad outcome is unrecoverable.