### Tags

# Optimal stopping theory – how maths can help you maximise your decisions by Max Eskell

In life and business, there are many problems where the main issue is that there is a high number of available choices. In business, these could be finding deciding on a **primary contractor**, choosing a **joint venture partner **or even** recruiting key individuals.**

Optimal stopping theory possibly provides help. Briefly, optimal stopping theory suggests that you should **reject the first 37% of all options**, and then take the **next option which was better than all previous options.**

For example, if you have five weeks to choose a primary contractor. You could expect to see possibly four a week; that is an anticipated **total of 20 suppliers**. If you selected **normally** and selected the first ‘good enough’ option, the probability of finding the optimum supplier is just** 5%**. However, if you rejected the first 37% suppliers, in this case, 18 suppliers, and then selected the next supplier that was better than all the previous suppliers, then your **odds of selecting the optimum supplier would increase to 40%**.

You can now use this four-step formula to make better decisions:

- Take a realistic guess on how many options you want to
**consider** - Times that by
**0.37** **Reject**this number of options**Then**, accept the next option which is**better than all previous options**

While I would **not recommend this approach for every decision**, you could use **optimal stopping theory to maximise your choice when you are faced with a problem where there is a high number of potential options.**