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John Spacey, October 03, 2016 updated on January 14, 2023
The sure thing principle is a decision making guideline that suggests there is no need to consider uncertainty in a decision that wouldn't impact the decision anyway. This is used to counter the common tendency to worry about uncertainties that are practically irrelevant to a particular choice. It is common to avoid choices that involve uncertainty or spend a great deal of effort considering probabilities. The sure thing principle is a basic sanity check that potentially simplifies decisions by dropping unnecessary considerations.
ExampleAn investor is considering buying a stock but she is worried about an upcoming election. There are two candidates running A and B. If A wins she will be happy and will buy the stock. If B wins she will be disappointed but would still like to own the stock. In such a scenario, the uncertainty of the election is obscuring the fact that the investor would like to purchase the stock, either way the election turns out.
Decision Making
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