Smart Choices

CHAPTER 7

Uncertainty

IN THE PRECEDING CHAPTERS, we’ve laid out a comprehensive approach to making smart choices when, for practical purposes, you can know the consequences of each alternative before deciding. We now turn to situations in which—no matter how much time and thought you expend—you won’t know what the consequences will be until after deciding. They’re uncertain. When you choose, you may know what might happen, but you won’t know what will happen.

Because life is full of uncertainties, many of the decisions you make will involve calculated risks: investing in a mutual fund, accepting a blind date, deciding to have a child, asking for a raise or promotion, starting a business, launching a new product. You can’t snap your fingers ...