Mathematics for Decision-making: The 37% Rule

Have you ever been stuck between multiple options and simply unable to make a decision?

Of course, you have — you’re a human being. While the human brain is the most complex computing system known to man, people are still prone to finding big life decisions difficult. Nobody likes being paralyzed by a decision, yet it happens to all of us. What if we told you there was a magic number, a decision statistic, that could help you out of those difficult moments?

Mathematicians have discovered a number that they believe we can use to make any type of difficult decision. Whether you’re deciding figure which of your 10 dates are the best pick, which house you should buy or which job to choose, this rule can help.

The 37% Rule

The underlying tenet is that if you have to choose among 100 possibilities, you should sample the first 37 and ignore (or postpone) the rest. The 37% rule is not some automated, unthinking process. It’s a phase of calibration where you figure out what works and what doesn’t. We select the finest from the rejected 37% and preserve that knowledge in our thoughts going ahead. If any future possibilities outperform that benchmark standard, you should choose them in order to get the greatest possible result.

The mathematically-minded may check out a more in-depth explanation of this weirdly specific advice. Mathematicians maintain that following this rule will increase your chances of selecting the best decision.

Exploit Versus Explore

The “explore/exploit” trade-off in psychology and economics. This questions if you should choose a surefire win (exploit) or take a chance choosing a different route with an unknowable result (explore). Certain variables, like how curious or risk-averse you are, influence how much you will investigate or exploit.

The extremes of being very exploratory or overly exploitative put us at a disadvantage. A person who investigates excessively runs the danger of becoming a “jack of all trades, master of none,” whereas a person who exploits excessively may develop habits. So, how does it work in real life?

How to Apply the 37% Rule

Mathematicians think that we can use this rule in every area of life. To come to a statistically optimal decision on anything, you can apply it and know you’re in the hands of science. Here are a few real-life examples of how to use this rule.

Dating

This rule says that if you’re planning to go on 10 dates, you should enjoy the first three (3.7) but don’t make any commitments. Then, the very next person you date who is better than any of those three should be the one you choose to settle with. According to the research, this is the perfect statistical balance between being exploratory and exploitative.

Job Hunting

If you plan on doing 100 job interviews, this rule says that you do 37 noncommittally, without having the intention to take any of them. Then, when you find the first thing that beats any of those first 37 options, take that one.

Humans are naturally analytical, but we can’t always do the right thing. There’s always an optimal decision to be made, but our tendencies to be risk aversion or overly exploratory might sometimes steal it from us. You can apply this to your personal and business decisions to avoid missing out on the optimal choice. If you benefit from topics like this, consider joining the local chamber of commerce in our region.