If you’re old enough, you probalby remember the days before GPS. Back in those days, when you planned a road trip, you’d look at a paper map, and choose a route.

Sometimes you’d have a choice to make. Should you take route A or route B? A looks longer, but straighter. B is shorter, but windy. Which do you take?

Let’s suppose you choose A, assuming that the windy road through the mountains is likely to have more traffic jams, or other delays.

Half way through your journey, you discover that the straight road is under construction, and you’re stuck in a traffic jam for 2 hours.

“I guess we made the wrong decision.”

But did you?

Not so fast!

There’s a big difference between a good decision and a good outcome.

You may have made the right decision, and still had a bad outcome. Or you could have made the wrong decision, and still had a good outcome.

Let’s consider a more obvious example:

Someone presents you with a shuffled deck of cards, and makes an offer: Draw one card, and if it’s the Ace of Spades, you’ll win $100. If it’s any other card, you must pay $100.

Should you take the bet?

Probably not.

But we can assume that if enough people do take the bet, 1 out of 52 of of them will win $100.

Can we say that those who won the bet made a good decision, simply because they had a good outcome?

No.

A good decision is good, regardless of the outcome, if it’s the best decision that could have been made with the information available at the time.