Ask most analysts and they’ll have a very straightforward theory about how decisions are made.
- They did up numbers.
- They put them into context.
- Decision makers make a decision based off those numbers and context.
Only that they don’t.
To summarize the Garbage Can Model:
- Institutions are organized anarchies.
- Problems, solutions, participants and energy go into a Garbage Can and shaken all around.
- Solutions really search for problems.
When you mix it with Arrow’s Impossibility Theorem, you get a much more complete picture of why groups of people don’t behave the way you think they do.
To summarize Arrow’s Impossibility Theorem:
- Individuals may have very straight forward preferences (Beef>Chicken>Pork), but when combined all together, the groups preferences frequently become circular. (Beef>Chicken>Pork>Beef>Chicken….)
- That circularity forces decision making algorithms to be sub-optimal.
- There is no perfect voting system.
- An algorithm that enables group decision making to be representative of the all the facts, opinions, and preferences to be rational, can not exist.
- People cause organized anarchies.
- Choice, itself, is ambiguous.
The first bullet point absolutely gutted me in my sophomore year. The second bullet saved my senior year. The third bullet point is putting a lot more wind into my sails.
There’s a dangerous underlining assumption that if organized anarchies (institutions, companies, departments) had better information, and make sense of it, that they would instantly make better decisions.
Is it really true that better informed people make better decisions?
I have anecdotes. (I make no claim that this is evidence.)
- I make better decisions in the gym when I have my notebook with a complete history of what I lifted, on what.
- I make far better eating decisions when I put in the effort to track it.
- I make better financial decisions because I track spending.
Those are individual decisions. I don’t consult anybody in making them. It’s a dictatorship of one.
Is it really true that better informed groups of people make better decisions?
I’m not so sure that that is always the case.
Given what you now know about group decision making – what do you think?
I’m Christopher Berry.
I tweet about analytics @cjpberry
I write at christopherberry.ca