Exercises — Chapter 24: Decision-Making Under Uncertainty

Good decision-making is a learnable practice, not a talent. These exercises build the skills — biases awareness, probability thinking, values clarification — that separate reliable from unreliable decision-makers.

Part 1: Understanding Your Decision Patterns

Exercise 24.1 — The Resulting Audit

Identify three decisions you have made in the past two years — one with a good outcome, one with a bad outcome, and one with an ambiguous or mixed outcome.

For each:

(a) Outcome: What actually happened?

(b) Reasoning: What was the reasoning at the time of the decision? What information did you have? What alternatives did you consider? What did you think the likely outcome would be?

(c) Quality assessment: Based on the reasoning — not the outcome — was this a good decision? Could you, with the information available at the time, have reasonably expected a different outcome?

(d) The chapter describes "resulting" — evaluating decision quality by outcome quality. Looking at your three decisions: did the good outcome correspond to good reasoning? Did the bad outcome correspond to bad reasoning? Or were they decoupled?

(e) What would you have done differently, if anything, given the same information at the time — not given what you know now?

Exercise 24.2 — Bias Inventory

For each cognitive bias below, rate how frequently it appears in your own decision-making (1 = rarely; 5 = consistently), and identify one specific recent example where it influenced a decision:

(a) Which bias scored highest? In what domains does it most commonly appear?

(b) For your highest-rated bias: what is a specific decision coming up in the next month where this bias is likely to be active? What would you do differently to account for it?

Part 2: Cognitive Biases in Practice

Exercise 24.3 — The Disconfirmation Practice

Choose a belief you hold strongly about a decision, person, or situation.

(a) State the belief clearly: "I believe ___."

(b) Confirmation mode: List three pieces of evidence that support this belief.

(c) Disconfirmation mode: List three pieces of evidence that would be most troubling if you took them seriously. (Not evidence that's easy to dismiss — evidence that genuinely challenges the belief.)

(d) Has engaging with the disconfirming evidence changed your confidence in the belief? If not, why not — is the belief actually well-supported, or is the disconfirming evidence being dismissed?

(e) Apply disconfirmation to a current decision: "What would have to be true for my preferred option to be wrong?"

Exercise 24.4 — The Sunk Cost Audit

Identify one current commitment — a relationship, project, job, investment, habit, or course of action — that you continue primarily because of past investment rather than future value.

(a) How much have you invested (time, money, emotional energy) in this commitment?

(b) Ask the question: "If I were starting fresh today, with the same resources but without this prior investment, would I choose this?" Be honest.

(c) If the answer is no: what would stopping cost in future terms (not past)? What would continuing cost in future terms?

(d) What is preventing you from making a forward-looking decision? Is it the sunk cost reasoning, other factors, or both?

(e) The chapter notes that abandoning a sunk-cost commitment often feels like acknowledging failure. What would reframing "stopping" as a forward-looking choice (not a backward-looking admission) look like?

Exercise 24.5 — Anchoring Resistance

(a) Think of a recent negotiation, estimate, or decision that involved a number. What was the first number you encountered (the anchor)? Did that number influence your subsequent reasoning?

(b) Practice generating an independent estimate: - Choose something you would normally look up (a price, a fact, a quantity) - Before looking it up, generate your own estimate independently - Record it - Look up the actual answer - Compare

(c) In a current decision involving a number (salary, budget, timeline): generate your own estimate before consulting external reference points. Then consult the reference points. How much did your independent estimate differ from the anchor?

Part 3: Probability Thinking

Exercise 24.6 — Calibration Practice

This exercise trains the calibration between confidence and accuracy.

Answer the following 10 questions with a 90% confidence interval — a range within which you are 90% confident the true answer falls:

1. The year the Eiffel Tower was completed: _ to ___
2. The approximate population of Australia: _ to ___ million
3. The length of the Nile River in kilometers: _ to ___
4. The year Albert Einstein was born: _ to ___
5. The approximate number of bones in the adult human body: _ to ___
6. The year the Berlin Wall fell: _ to ___
7. The approximate speed of light in km/s: _ to ___ thousand
8. The year Shakespeare was born: _ to ___
9. The approximate land area of Canada in km²: _ to ___ million
10. The year the first iPhone was released: _ to ___

(Answers: 1889; ~26M; ~6,650 km; 1879; ~206; 1989; ~300,000 km/s; ~1564; ~10M km²; 2007)

After checking: (a) How many true answers fell within your 90% confidence intervals? If well-calibrated, approximately 9 of 10 should.

(b) If fewer than 7 fell within your intervals: you are overconfident — your intervals are too narrow. What would it mean to widen your uncertainty ranges in real-world estimates?

(c) Apply the calibration insight to a current decision: express your confidence as a probability ("I'm 65% confident that X is the better option"). What would have to happen to shift that probability 20 points in either direction?

Exercise 24.7 — Thinking in Bets

Apply the "decision as bet" framework to one current significant decision.

(a) What is the decision? What are the two or more options?

(b) For your preferred option: what is the probability distribution over outcomes? What are the most likely outcomes (assign rough probabilities), and what are the tail outcomes (very good or very bad) that are unlikely but possible?

(c) What is the expected value of your preferred option, broadly conceived? (Not necessarily monetary — what is the probability-weighted value across the likely outcome range?)

(d) What is the expected value of the best alternative?

(e) The chapter notes that a good bet that loses is still a good bet. If your preferred option produces a bad outcome: would the reasoning have been sound? Would you make the same bet again?

Part 4: Decision Frameworks

Exercise 24.8 — Pre-Mortem Analysis

Apply the pre-mortem to a significant upcoming decision or commitment.

(a) State the decision/commitment: what are you planning to do?

(b) The pre-mortem: Imagine it is one year later and the decision has produced the worst possible outcome. What went wrong? (Write this in past tense as if looking backward: "We failed because...")

Generate at least five distinct failure modes — not the obvious ones you've already planned for, but the ones that would be most surprising or that would be most difficult to recover from.

(c) Do any of the failure modes you identified change your approach to the decision — either the decision itself or how you would implement it?

(d) What is the one failure mode you would most want to prevent? What specific step could you take now to reduce its probability?

Exercise 24.9 — Steelmanning

Choose a decision where you have a clear preference.

(a) State your preferred option.

(b) The strawman: Write the weakest, easiest-to-dismiss argument against your preferred option.

(c) The steelman: Write the strongest, most troubling argument against your preferred option — the argument a thoughtful, well-informed person who disagreed would make. Take it seriously.

(d) Has engaging with the steelman changed your assessment of the decision? If not, why not?

(e) Apply this to a group decision you're part of: in the next meeting, when someone opposes the preferred option, try to steelman their position rather than waiting to rebut it.

Exercise 24.10 — The 10-10-10 Rule

Apply the 10-10-10 framework to a decision you are currently facing.

(a) How will you feel about this decision in 10 minutes?

(b) How will you feel about it in 10 months?

(c) How will you feel about it in 10 years?

(d) Which time horizon reveals the most important consideration? Is the decision's apparent difficulty located primarily in the 10-minute frame (present discomfort) or the 10-year frame (long-term consequences)?

(e) Is there a decision where the 10-minute and 10-year perspectives point in opposite directions? What does the long-term perspective reveal?

Part 5: Values and Identity

Exercise 24.11 — Source of Difficulty Diagnosis

Choose a decision you've been struggling with.

Diagnose the source of the difficulty:

(a) Information problem: Is the decision hard because you don't know what will happen? What specific information would resolve the uncertainty?

(b) Values conflict: Is the decision hard because two things you value are in tension and you can't fully satisfy both? Name the values in conflict.

(c) Fear-driven avoidance: Is the decision hard because you're afraid of being wrong, of judgment, or of commitment? (Chapter 23's procrastination framework applies here.)

(d) Based on your diagnosis: what is the most useful next step — gather more information, clarify your values, or address the emotional obstacle?

Exercise 24.12 — Values Clarification for a Hard Decision

For a decision where values are in conflict:

(a) Name the two (or more) values in tension.

(b) For each value: what would you be giving up if you prioritized the other?

(c) Identity question: If you knew the outcome would be the same either way, which decision would you be most proud of? (Not which outcome — which decision process.)

(d) Regret minimization: Project yourself to age 80, looking back. Which choice would produce more regret — acting or not acting?

(e) Write a one-paragraph account of the decision you would make if you were acting from your deepest values rather than your present anxiety.

Part 6: Decision Hygiene and Improvement

Exercise 24.13 — Starting a Decision Journal

Begin a decision journal. For each significant decision (career, financial, relational, strategic):

Record at the time of decision: - The decision made - The alternatives considered and why they were rejected - The key uncertainties at the time - Your prediction: what outcome do you expect? Assign a rough probability - Your reasoning: what are the three strongest arguments for this decision? - Your pre-mortem: what are the two most likely failure modes?

Return to the journal entry when the outcome is known: - What actually happened? - Was it within the range you predicted? - Was the reasoning sound, given what you knew then? - What would you do differently?

After six months: review all entries. What patterns appear? Which biases show up repeatedly? Which domains have your best calibration?

Exercise 24.14 — The Base Rate Question

For a current project, goal, or decision with a time or success expectation:

(a) State your inside-view estimate: "I expect this to take ___ / succeed at % / achieve ."

(b) Find the reference class: what category does this belong to? What is the base rate for this kind of project/decision/endeavor?

(c) If you don't know the base rate: who would know? How would you find out?

(d) Adjust your estimate toward the base rate. (Research suggests moving 30–50% of the way toward the base rate is typically appropriate when inside-view and outside-view conflict.)

(e) Does the adjusted estimate change your approach to the decision?

Part 7: Group Decisions

Exercise 24.15 — Groupthink Detection

Think about a group you are part of (team, family, community) that has made or is about to make a significant decision.

(a) Assess for groupthink conditions: - High cohesion? (Yes / No) - Insulation from outside perspectives? (Yes / No) - Strong directive leadership? (Yes / No) - Time pressure? (Yes / No)

(b) Groupthink symptoms: are any of the following present? - Self-censorship (people not saying what they actually think) - Illusion of unanimity (the group converges faster than the diversity of views would predict) - Stereotyping of dissenters as problematic or disloyal - Missing devil's advocate function

(c) If groupthink conditions are present: what specific structural intervention would help? - Designated devil's advocate? - Leader announces position last? - Anonymous pre-discussion vote? - Pre-mortem before commitment?

(d) For your next group decision: volunteer to steelman the dissenting position, even if you agree with the consensus. Notice what happens.