There is a little known concept that rules every decision you make, and the person you eventually become. If you do not properly conceptualize what I am about to tell you, you could let this decay your life into disappointment.
This article will be an exploratory exercise into the concept of value. Value is a loaded word with many undertones within it, but throughout the next few minutes you will understand just how powerful your perception of value is over your behavior.
To begin, reflect on the following questions
If you struggle to answer these questions, finding yourself uncomfortable from the fact that most of your daily actions are unconscious, then you are going to want to stick around and learn what you can do today to act in alignment with your values.
Whether you are consciously aware of it or not, you make decisions based upon what it is that you value. When you are considering what to have for dinner, someone who chooses a salad over a Mcdonald's big mac values their health more than a delicious, instantly gratifying meal. But it is not as simple as just what you value, it is how you expect that value to materialize overtime. You may value your health, but eating a singular big mac does not make or break your physical health. You expect that if you make the decision to eat the big mac now, and continue to make similar decisions, your health will trend in the downwards direction. Whether it be for your health, your career, or even your relationships, everything you do is driven by expected value.
The issue is, our expected value analysis is often ill informed. It is important that you pause and take the time to bring awareness over how you make decisions and what variables you give weight to. Without this awareness, our decisions will be made for us subconsciously, which often results in a suboptimal outcome. The goal of bringing awareness to the decision making process is to highlight how often our decisions are based on insufficient data. We are driven astray through false beliefs which influence us to pursue 1 direction when another might be far more beneficial. It is impossible to know what the true value of a decision might be, that is why the concept is called expected value. When making a prediction, there will always be a level of uncertainty. Your objective is to improve your confidence interval and make the best decision you can with the information at your disposal.
If you are still not convinced that expected value rules your life, let's cover a brief history lesson. Throughout all of human history, our ancestors had to predict what action would give them the greatest likelihood of survival. Through thousands of years of struggle, expected value analysis has been encoded into our DNA. They had to constantly estimate if the potential benefits from the resources they were in pursuit of justified how much it cost to receive. Back in the day, they risked their lives to find the next meal and if they made an ill informed decision, it could mean the difference between life and death for their family. Today, the stakes are a lot lower, but it is still your life so you choose how seriously you want to take it. Before humans had even developed language, they were performing these expected value analyses. Although they may not have been able to describe their thought process fully, the ancestors who were successful definitely abided by the value equation.
The crucial equation that drives expected value is simply the balance between how good of an outcome you could retrieve, compared to how much you could have to sacrifice to retrieve it. The key word here is could. We do not know for certain if we will be rewarded for our efforts and therefore are making a hypothesis. As we have discussed, our perception of something's value is not always reflected perfectly in reality. As we learn more about the world we exist in, we strive to become better predictors of expected value. Some concepts are so difficult to derive accurate insights from that we pay experts to provide us their opinion. Think about the profession of financial investing. Their entire career is based upon giving you an educated opinion on the expected value of one fund over another. There are plenty of other examples of expected value at play. When you vote in the presidential election, you are voting with the expectation that one candidate will provide more value to the country than another. When you choose a career, you are evaluating what job will provide you the most income and fulfillment as opposed to its difficulty and reduction in autonomy. Even decisions as simple as what movie to watch off Netflix is driven by the amount of entertainment you could derive.
Hopefully now you can see how expected value drives your life and decisions. To put this theory into practice, let's cover a more specific equation that will really help you narrow your focus on the most important questions to ask yourself when weighing your options. The following equation is a framework from Alex Hormozi. He is a successful entrepreneur who analyzed how himself and buyers make decisions. When crafting this article on value, it was hard to argue with the equation that Alex has put together. There are 4 core concepts that drive your expected value. The first being your desired outcome. What is it that you want to achieve? For a hunter, it could be a meal for the family by hunting a wooly mammoth. For each decision you are making, clearly define on paper what it is that you hope to achieve. The next variable is perceived likelihood of achievement. Yes, we all have desired outcomes, but do you believe that if you applied effort, you would retrieve it? Killing a wooly mammoth certainly would provide a very desirable outcome, but an experienced hunter would realize that his chances of success are low. You might have the desired outcome of marrying a supermodel, but unless you look like Chris Hemsworth you will perceive this as unlikely. These two variables are what drive the value. The next two values drive what you have to sacrifice in order to get it. Value is always a balance between these two concepts. You must take into account both if you want to make an educated decision. The third variable is time delay. How long from the time you commit to a direction will it take to retrieve the end reward? If a hunt for a wooly mammoth takes 2 months, your family could be starved far before you ever make the kill. This dramatically reduces the expected value of the hunt. Your dream career might require 8 years of education to retrieve, while other careers are available to you in just 2 years of apprenticeship. The final variable is the amount of perceived effort that must be exerted to achieve the desired outcome. This one is where a lot of people go wrong. We overestimate how difficult something will be to retrieve, and never take steps towards our desired outcomes. We may value something very highly, but not expect that we have what it takes to follow through with it, and therefore have a low total expected value.
With the knowledge of this equation, reflect on each variable and consider what are your bottlenecks on success.
For myself, I have realized that most of my decisions are driven by faulty data. I have limiting beliefs and false assumptions which drive me into what I perceive to be safer bets. By structuring your thoughts into a framework such as this one, you can become more aware of your own psyche. This is a primary mission of Pscyence, to help use Science to understand the Psyche. By taking the time to write out on paper what your perception of value is, you can begin to understand what is the limiting factor. Talking through an important decision with a friend is also a great way to bring forward your true thoughts about the matter.
Through this exercise, it is inevitable that you will come to the conclusion that at least some of your daily actions are driven by a broken expected value equation. Take a look at some of the most prominent addictions. When someone is addicted to cigarettes, alcohol, or even food, they have convinced themselves that they will get more value from a substance than they truly will. In most cases, these addictions take more than they give, leading to a life full of needless suffering. Addictions are perpetuated through faulty programming in our brains which can only be overcome with conscious, critical thought. By being honest with yourself regarding what stimuli add or take away net value from your life, you can begin to make progress towards a healthier, more free existence. A less serious addiction, but one that is certainly prominent in the modern day, is social media. I remember a few years ago my irrational addiction to the platform of Twitter. I would justify my consumption of the platform as me staying up to date on what others were saying for topics I cared about such as sports. Overtime, I realized that when I turned off the app, I was filled with negative emotion from the outlandish comments people were making. I expected the app to provide me pleasure, while in reality it was delivering pain. Only through self awareness can you remedy a problem such as this. We get caught into a conditioned feedback loop where we continue to act counter intuitively because of a false assumption we previously had made. We often too suffer from a gamblers fallacy where we want to see something we committed to ride out instead of cutting our losses. These mindsets are corrosive and lead to more suffering for yourself and those around you.
Through self experimentation and unbiased observation you can achieve a better balance in your life, ultimately shifting what it is you value and how that value assumption drives your behavior. It is impossible in your current state to make all the right decisions. Otherwise, you would have already solved all your problems and would not be reading this article. Recognize that you are in the position you are because of the accumulation of your past actions, and that you have the power to improve your condition by experimenting with new actions. These new actions must be educated through a reflection on expected values, which was clearly outlined in this article. I trust that you can structure your thoughts into the value equation and begin making more educated decisions on the trajectory of your life.
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