Use the 37% Rule to Make Better Decisions

When it comes to making decisions, are you the type of person who knows what they want right away, makes quick decisions, and rarely guesses right? Or are you more inclined to make decisions to “go to the bottomless pits of the internet to explore all available options before sinking into the despair of analysis paralysis”?

If you are the first, please accept my sincere congratulations. You are either extremely self-confident and zen, or extremely disciplined; either way, you are blessed. For those of us who tend to spend days making scrupulous lists of pros and cons before giving up, discarding said lists and starting over, there is the fascinating and effective 37% rule.

What is the 37% rule?

The 37% rule comes from the theory of optimal stopping in mathematics, which determines the optimal time to take a certain action in order to maximize reward and minimize costs (in other words, the best time to stop looking for additional options and pull the trigger). According to mathematicians, this moment comes immediately after you have seen or studied the first 37% of the options.

Of course, you need to come up with your shared universe first in order to calculate what 37% of your choices will be. You can do this by setting a maximum limit or a time-based deadline.

For example: if you are buying a car and decide that you would like to see 10 cars before making a decision, you should plan to see the first 3-4 without the intention of buying them. After studying them, your research period has reached a point of diminishing returns, and the next machine that is better than those first three becomes the keeper.

Alternatively, you can set a time period for the search, as author and programmer Brian Christian describes in his book Algorithms for Life: Computer Science of Human Decisions :

“If you want the best chance of getting the best apartment, spend 37% of your apartment search (eleven days if you gave yourself a month to search) noncommittally researching options. Leave your checkbook at home you are just calibrating. But after that, be ready to immediately commit – deposit and all – to the very first place you see, which is superior to anything you have already seen. It’s not just an intuitively pleasing compromise between looking and jumping. This is a provable optimal solution.”

This rule can be applied to decisions of any kind, from dating or choosing a vacation spot to buying a house and hiring a secretary (or any other job candidate). According to mathematicians, following this rule will save you from unnecessary bogging down in collecting information and analyzing data, get you involved in action and increase your chances of success.

Rule Limits 37%

Of course, when it comes to big financial decisions and matters of the heart, this rule doesn’t take into account feelings, gut instincts, instant chemistry, and the power of recommendations. (For example, when a very attractive, fun-loving person is sitting next to you, who was checked out and proposed by a close friend, even if this is the first date you go on in a year.)

While this doesn’t apply to all situations, and you shouldn’t give up apparently better options simply because of a mathematical theory, if you tend to make hasty but regrettable decisions or study all your options too long, it’s a useful rule. The next time you’re faced with competing options, remember that about the first third of your decision-making process should be information gathering, after which the best choice is the next great option you encounter.

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