Question
Not balancing exploration and exploitation can lead to inefficiencies and missed opportunities. If you focus too much on exploration, you might miss out on exploiting known resources or strategies that can yield benefits. On the other hand, if you focus too much on exploitation, you might miss out on new opportunities or innovations that could potentially lead to greater rewards. It's about finding the right balance between trying new things (exploration) and sticking with what works (exploitation).
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The "37% rule" refers to a series of steps, or algorithms, that someone must follow to make the best decision within a set amount of time. Someone allots 37% of their time to research before they make a decision, then commits to the very next "best choice" they find. The "explore/exploit" trade-off refers to the need to balance the tried and tested with the new and risky. The payoff of this algorithm depends entirely on how much time you have to make decisions. People are more likely to visit their favorite restaurant on their last night in town than risk something new. Developed in 1952 by mathematician Herbert Robins, the "Win-Stay, Lose-Shift" algorithm uses slot machines as a metaphor. Choose a machine at random and play it until you lose. Then switch to another machine; this method was proven to be more reliable than chance. A psychology study found that given choices, people often "over explore" rather than exploit a win. Given 15 opportunities to choose which slot machine would...
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