"It's time for Macy to move home. She's scored a promotion and she's tired of hearing the man in the apartment above play his French horn. So, she books a few viewings with her real estate agent and starts looking at houses. After looking at three places, she falls in love: It's a house with a huge backyard and a nice open-plan kitchen. What's more, the school down the road has a great reputation. She's all set to put in an offer."
"Mathematicians have given us an answer: 37%. The basic idea is that, if you need to make a decision from 100 different options, you should sample and discard (or hold off on) the first 37. The 37% rule is not some mindless, automatic thing. It's a calibration period during which you identify what works and what does not. From the rejected 37%, we choose the best and keep that information in our heads moving forward."
Macy considers moving after a promotion and dislikes noise in her apartment; she views houses and quickly finds one with a large backyard, open-plan kitchen, and a well-regarded nearby school. Doubt arises about whether a better house might appear later. Similar dilemmas occur with job offers, car purchases, or dating. The optimal stopping problem addresses how long to sample options to maximize the chance of a successful final choice. The 37% rule recommends sampling and rejecting roughly the first 37% of options to establish a benchmark, then selecting the first later option that surpasses that benchmark. This balances learning about available choices with preserving the opportunity to pick a superior option.
Read at Big Think
Unable to calculate read time
Collection
[
|
...
]