Exploit or Explore

Mathematics offers us the best answer to the “optimal stopping problem.” But there’s just one big issue with it: Humans are not rational probability-crunching machines. In fact, the opposite is usually true. We’re beautifully, infuriatingly, creatively, and messily chaotic.

In psychology and economics, there is what’s known as a “explore/exploit” tradeoff. This asks whether you should go with a guaranteed “win” (the exploit) or risk going somewhere else for an unknown outcome (explore). The degree to which someone will explore or exploit will depend on our curiosity and risk appetite.