If this project is critical, and it’s failure will sink the company, you really, really want to be in a position to handle the 25% cost overrun
So, to refine Decius’ formula from above, you’d want to add in a variable which represents expected marginal utility of costs.
Thinking in terms of statistics, without any actual details attached, is one of the BIG failure modes I see from rationalists
I don’t think the problem here is thinking in terms of statistics; I think that the problem is attempting to use a simple model for a complicated decision.
I don’t think the problem here is thinking in terms of statistics; I think that the problem is attempting to use a simple model for a complicated decision.
Both geeks and laypeople seem to use overly simply models, but (in my experience) they simplify in DIFFERENT ways: Geeks/”rationalists” seem to over-emphasize numbers, and laypeople seem to under-emphasize them. Geeks focus on hard data, while laypeople focus on intuition and common sense.
“Intuition and common sense” sound more like styles of thought process, not models. The models in question might be called “folklore” and “ordinary language” — when thinking “intuitively” with “common sense”, we expect the world to fit neatly into the categories of ordinary language, and for events to work out in the way that we would find plausible as a story.
So, to refine Decius’ formula from above, you’d want to add in a variable which represents expected marginal utility of costs.
I don’t think the problem here is thinking in terms of statistics; I think that the problem is attempting to use a simple model for a complicated decision.
[edited for grammar]
Both geeks and laypeople seem to use overly simply models, but (in my experience) they simplify in DIFFERENT ways: Geeks/”rationalists” seem to over-emphasize numbers, and laypeople seem to under-emphasize them. Geeks focus on hard data, while laypeople focus on intuition and common sense.
“Intuition and common sense” sound more like styles of thought process, not models. The models in question might be called “folklore” and “ordinary language” — when thinking “intuitively” with “common sense”, we expect the world to fit neatly into the categories of ordinary language, and for events to work out in the way that we would find plausible as a story.