Explore First, Exploit Later

The explore/exploit tradeoff is something I read about recently in Algorithms to Live By, a recent book bringing together psychology and computer science. It’s one of those useful constructs to mentally flip back to and keep in mind. (And I really recommend the book!)

Basically, how inward-looking are you?

In effect, you’re exploring when you embrace novelty and deliberately seek out new things to behold. Babies do this naturally, children continue to do it, and adults do this a lot less. Mostly, adults tend to let their exploratory sides lag behind, maybe seeking out a new restaurant or a new hobby sometimes but largely sticking to what is comfortably familiar.

For the elderly, it’s all about exploiting. They’re all about familiarity. This means they’re exploiting knowledge they already have acquired, rather than taking it in constantly the way babies do. They’ve already been around and seen a thing or two.

By old age, people are ready to focus on the things that matter most to them, not potentially running into something new and cool. Learning new skills or making new friends aren’t necessarily top of mind. They prize only their closest relationships and activities.

Why this difference between old adults and young children is important is what it says about how we humans make choices. It all depends on our time horizon.

The interval is everything.

People tend to make decisions in isolation from each other, thinking only about the best thing at the moment, rather than think about decisions as grouped together as part of a lifetime.

If you have ten years left in a city, odds are you will care more about trying new things locally. If you’re moving out next week, the best place to find you is your old standby.

Buying a stock to own for ten days is a far cry from buying and holding for ten years. This is the difference between technical and fundamental investors. It’s a whole ‘nother game; the interval makes the difference.

This is why it makes so much sense that older people weed out their lesser social connections. It’s (maybe) not because they’re cognitively declining or being antisocial. They’re being efficient, getting rid of what’s less important. They’re clearing out the email inbox.

Whether to explore something new or exploit what you know matters everywhere, not just in computer science or with regard to age. The interval is what matters. The fact that unless you’re on the verge of being ready to cash in, it’s better to explore is an important point for all of us.

We need continual prodding to embrace the new and stay away from complacency, and this book was great reminder of that for me. It seems kind of obvious and intuitive--but then again, so do most good ideas after you know about them: We humans have to continually and consciously choose to be optimistic and embrace our inner explorer until the relevant time horizon starts growing short--and then take advantage of everything we’ve got.

Thanks for reading, Steemit!