The View | Taxi reform in Hong Kong? Start by paying drivers more
- Proposals to restructure Hong Kong’s taxi system will not necessarily give us better service and could prompt drivers to leave the industry
The perfect is the enemy of the good. Our behavioural instincts seek the very best answer to a problem but optimal decision-making requires a great deal of thought, which self-justifies the need to do even more analysis and makes reaching the final decision even harder.
Herbert Simon theorised that decisions that are good enough can be made by companies most of the time using only partial information. There is not enough time to collect all of the data, even if all of it could be collected. Plain common sense is more relevant than pencil-sharp decision-making based on dodgy data. He called these decisions that are good enough “satisficing”.
Gerd Gigerenzer developed a decision-making theory about fast and frugal problem-solving – the making of decisions using fractional information. A gut-feeling decision, like that of a fire department chief sending firefighters in at close range, is actually founded on an assessment of risk based on experience. In a split second, the risks of different solutions are mentally calculated and the relatively riskier solutions instantly discarded. The psychologist Daniel Kahneman summarised the spectrum of decision-making in his book, Thinking, Fast and Slow.
Senior individuals responsible for a final decision should make it on the basis of all that research and analysis, but ironically often rely on instinct. Unfortunately, their instinct is seldom borne of real-world experience, unlike warhorses like the fire department chief.
