Tough decision? Flip a coin

Flip a CoinSometimes we all have trouble making decisions – even the most simple ones.  But what if the decision you face involves a major life change:

  • Should you quit your job?
  • Should you get married / break up from a relationship?
  • Which house should you buy?

These are the kinds of decisions that can paralyze us with fear and keep us up at night.  There are pros and cons to any of the choices.  You know your life will be different whichever path you take, but will it be better?

If only there were a service that could help…

Freakonomics Experiments says, “Let the coin decide.”

The brains and brawn behind the successful Freakonomics franchise, economist Steven Levitt and author Stephen Dubner have created just that, with the launch of a website called FreakonomicsExperiments.com.

First introduced during their bi-weekly segment on the Marketplace radio program, and described in detail in the most recent full-length episode of their Freakonomics Radio podcast, Freakonomics Experiments seeks to study the process and outcomes of making major decisions, while eliminating the potential regret of making a bad choice.

The website takes you through a brief questionnaire, tailored to your particular predicament, the answers to which may help you solidify your position on your own.

And if that fails, they’ll flip a coin for you.  That’s right… your life-changing decision will come down to a random call of ‘heads-or-tails’.

Establishing a methodology for major decisions

But here’s the catch.  By letting the coin decide your fate, you agree to take part in a long-term study that tracks your outcome over time.  And if only for the sake of the study, you now have a reason to follow through with your decision.

Levitt’s team at the University of Chicago will pore over the anonymized data gathered from these real-life situations in an effort to learn whether there are any systematic rules about the process that goes into making major decisions, and to create a framework for making these decisions easier.

In the podcast Levitt explains, “So let’s just say over thousands of people making real-world big decisions we find that the changers, the ones who shake up the status quo, do better. Well if that’s true, then that’s a really important message, because what that means is whenever you’re on the margin, you should have a default rule, which is I go for the change.”

Correlation vs. causality

One major factor that Levitt hopes to learn is the difference between correlation and causality.  Does a big decision make people happy, or do happy people make big decisions?  He explains:

“The beauty of the coin toss is because we’re isolating it down to the people who truly could go either way and are happy to do either one, they just don’t know what to do, that we’re really going to get something that’s like a causal effect.

“I mean, as you know, I’ve spent my entire career trying to distinguish between correlation and causality. And through this coin toss, we are going to have the best mechanism that I’ve ever heard of for figuring out whether big decisions are made properly or not.”

Crowdsourcing research subjects

By making its website open to the general public, Freakonomics Experiments is using the wide reach of the internet to crowdsource their research data.

They’re expanding their universe of willing research subjects – likely previously limited to the number of Freshmen in the University of Chicago Economics department – to as much of the earth’s population as will hear of their service.

“So it’s really for me, what gets me excited, and I’m sure you can sense my excitement, is the idea that we’re taking economic research to a place it’s never been done before and really in some ways democratizing it to the extent that anyone can now be part of this process,” Levitt says in the podcast.

And in doing so, they’re allowing a host of real-world decisions to enter the realm of study.  But after all, this study isn’t about the specific decisions being made, it’s about the methodology and the outcomes.

But is it right for business?

What I like about Freakonomics Experiments is that it’s not anti-analytics – it’s anti-stasis.  It favors making that hard decision one way or the other, and moving on.  This may be fine in a personal situation where you can recover from a wrong step, and where your support system will catch you if you fall.

But is this the right approach to take in your business life, where investors, employees, customers, perhaps even whole communities depend upon your success?

  • Should we expand into a new market?
  • Should we close that factory?
  • Should we launch / eliminate that product line?

It’s one thing for a manager to go with the data, and another to go with the gut. But the random coin toss…

You may have worked for a boss who was unable to make the hard decisions.  My experience has been that the anxiety this creates can be more poisonous than the potential negative result.  Is it better to take action – ANY action – without regret and move forward as an organization?

Are you game?

Do you have a major decision that you’ve been agonizing over?  Maybe the outcome will be better simply because you acted.  That’s what Freakonomics Experiments will try to show.

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Categories: Crowdsourcing

Author:Doug Evans

Doug Evans is an accomplished marketing leader with wide-ranging experience in diverse business environments including non-profit, small private business, major national bank, and Silicon Valley software company. He has a knack for bringing together teams from across geography and organizational lines. He keeps active by playing and coaching soccer, and is also Marketing/PR Director for an acoustic music concert series in his hometown of Columbus, Ohio.

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4 Comments on “Tough decision? Flip a coin”

  1. February 1, 2013 at 6:40 am #

    In our negotiations training, one of the resolution methods that we dicuss is the coin toss. It is for situations such as the one you describe – where resolution cannot be reached because the parties cannot decide which option is better.

    This suggestion causes violent reactions among students – essentially they suggest it is a ridiculous idea. THey seem unable to specify why it is ridiculous, excpet perhaps feeling unable to explain to senior management why this approach was followed. So your article – and the Freakonomics study – are of great interest and perhaps more frequent relevance than we realise.

  2. February 1, 2013 at 7:27 am #

    Thanks for your reply Tim. Like many of the Freakonomics topics, I found this to be counterintuitive. But stepping back to view it from an economist’s perspective, and relating it to my own experience, it makes sense.

    For me, there’s nothing worse than to sit around and wait for a decision… Even if it’s bad news in the near-term, I’d much rather just get it over with and look forward than to worry about it every day.

  3. schwartz
    February 27, 2013 at 8:55 am #

    Interesting indeed , sometimes speed is key in decision , and the probability to be wrong or right being equal so let the coin decide and move forward

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