Decision Making: Only to Relevant Information

Serves only to Relevant Information: This information is that which reduces uncertainty when making a decision and that its cost is lower than the benefit it brings. However, we sometimes use other information that is not relevant and leads to bad decisions. For example, biased information, the captain of the Titanic made a biased use of the 17 messages warning of icebergs that area before the crash was because he was not interested in slowing down or modifies the path to show the world that was a very fast boat.

Another is the historical information, which in turn might be relevant but currently is not helpful and only makes it more difficult decisions. The high cost information on the benefit is one that actually produce more cost than the benefits it brings, such as market studies are carried out and cost more to implement the project and see if it is genuine or not. And finally, the legendary information, based on assumptions and that does not distinguish between facts and value judgments. Paradigmatic example is the loss of leadership of the Swiss watch industry. With a market share of 90% before the 70, the prestige of these watches was unquestionable. However, when the Japanese copied the quartz mechanism with the same precision that the Swiss and cheaper, their share fell to 20% in just ten years. The Swiss fell on the assumption that only they knew how to make the best watches. Another mythical assumption is the one made in 1997 a manufacturer of computers: "There is no reason why an individual should have a computer at home."