# Decision makers

# Human decision making

# How does the brain work

# Behavioral science

# Learning

“Good judgement is the result of experience and experience the result of bad judgement.” ― Mark Twain

# Conclusions

It is clear that there our knowledge about how we, humans, make decisions is still very limited. To attempt any conclusions on how we can improve decision-making, therefore, requires making certain leaps of faith, or as economists call it - assumptions.

Based on everything discussed before there are few assumptions I will treat as facts in everything that follows.

• First and foremost, I will embrace the key idea of the computational theory of mind that the human mind is an information processing system and that cognition is a form of computation.
• Second, we do not know how people make decisions or form preferences. In other words, we do not know the computation algorithm. Furthermore, none of the existing ideas on the functioning of human brains allows us to predict decisions confidently in a wide range of contexts. Human decision-making is completely intransparent to outsiders and decision-makers themselves and can be described as a “black-box”.
• Third, it is clear that people are not rational in a strict sense, however, rationality assumptions provide good approximation in many settings.
• Fourth, humans are overall outstanding decision-makers, however, quality of decisions is context-dependent. It is driven by both evolution and learning (nature and nurture) driven.
• Fifth, we learn best in the environments that provide frequent and immediate feedback. This, in general, applies to evolutionary learning as well.
• Sixth, our decision-errors could, as in the case of other algorithms, can be attributed to bias or variance, however, this attribution is hard in a large-world setting. There is no reliable way to distinguish between noise and bias triggered by some unknown factor. Furthermore, evidence suggests that our decisions are both sensitive to large-world contexts such as body environment (hormones, etc.) and external environment (hearing random number), even if consciously we agree that these factors are not decision-relevant and would not be included in the small-world of decision.