When faced with tradeoffs, you should value the ones that mean you still get to make more trades. Never put that on the line.
What about this: you can press button A or button B. If you press button A, you get a million dollars but then have to sit out round two. In button B, you play a game of chess against someone and the winner gets $10. Surely you should press A?
The heuristic you've described is probably good in a lot of situations but it's definitely not universally applicable.
On average I think people suffer more from the opposite mistake. Refusing to go all in on something and commit, because they want to keep optionality open.
It could be drifting from one relationship to another, pushing off having children (but freezing eggs just in case), never buying a house and settling down in a community you like, never giving up everything to get that job you've always dreamed of, whatever it is that matters to you.
Life is often much richer and more fulfilling when you give up optionality for the sake of having your best shot on the things that are most important to you.
That said the extent these things remove your optionality is overstated. You can always get divorced, sell your house, move locations, find a new job, go back home, put your kid up for adoption, etc. Scrap that last one, having a child really does pretty permanently limit your optionality. But they go better when your mindset is one where making this work is your only option, there are no other alternatives.
For example marriage goes best when:
Doing so requires a kind of doublethink, but most people are capable of it fairly easily.
There's a lesson I first read in Harry Potter and the Methods of Rationality, whose importance I did not realize for a decade.
There can only be one king upon a chessboard, Harry Potter, only one piece that you will sacrifice any other piece to save.
Spoilers for Methods of Rationality abound. Beware.
The line "one king upon [the] chessboard" appears twice in HPMOR. The first time, it's in a conversation that is about tradeoffs.
"Are you familiar with the economic concept of 'replacement value'?" The words were spilling from Harry's lips almost faster than he could consider them. "Hermione's replacement value is infinite! There's nowhere I can go to buy another one!"
Now you're just talking mathematical nonsense, said Slytherin. Ravenclaw, back me up here?
"Is Minerva's life also of infinite worth?" the old wizard said harshly. "Would you sacrifice Minerva to save Hermione?"
"Yes and yes," Harry snapped. "That's part of Professor McGonagall's job and she knows it."
"Then Minerva's value is not infinite," said the old wizard, "for all that she is loved. There can only be one king upon a chessboard, Harry Potter, only one piece that you will sacrifice any other piece to save. And Hermione Granger is not that piece. Make no mistake, Harry Potter, this day you may well have lost your war."
Harry just paid a lot of money in order to protect a friend of his.
On my first reading I thought the mistake being made was about making trades, haggling over price, and about incentivizing people to blackmail you. Which is the surface text involved here, and the situation in this scene! Dumbledore has said something which sounds deep and wise and yet doesn't quite connect usefully to the situation, which is this bit about chess and sacrificing. Notice, though, that Dumbledore doesn't actually say what the king is.
The second time we get that line, it's later in the story. Dumbledore's final message, read posthumously[1] is talking about the end of the world. Dumbledore has used a method of seeing the future to learn
I listened to every prophecy that had ever been recorded.
And so I learned that my troubles were far worse than Voldemort.
From certain seers and diviners have come an increasing chorus of foretellings that this world is doomed to destruction.
And you, Harry James Potter-Evans-Verres, are one of those foretold to destroy it.
By rights I should have ended your line of possibility, stopped you from ever being born, as I did my best to end all the other possibilities I discovered on that day of terrible awakening.
Yet in your case, Harry, and in your case alone, the prophecies of your apocalypse have loopholes, though those loopholes be ever so slight.
Always 'he will end the world', not 'he will end life'.
Even when it was said that you would tear apart the very stars in heaven, it was not said that you would tear apart the people.
After talking about the actions Dumbledore took based on the prophecies, the message continues.
There can only be one king upon the chessboard.
There can only be one piece whose value is beyond price.
That piece is not the world, it is the world's peoples, wizard and Muggle alike, goblins and house-elves and all.
While survives any remnant of our kind, that piece is yet in play, though the stars should die in heaven.
And if that piece be lost, the game ends.
Know the value of all your other pieces, and play to win.
(emphasis mine)
That's the key insight I didn't realize; Dumbledore is done being cryptic and trying to give Harry the best practical advice that he can, and his last words are about when the game actually ends. Dumbledore is saying this after he himself has been removed from the board and can no longer take actions.
The most important piece, the one with infinite value, is the one that means you still get to take a turn.
When faced with tradeoffs, you should value the ones that mean you still get to make more trades. Never put that on the line.
It's like the Kelly criterion says, you never bet your entire bankroll. Once you lose a bet like that, you don't get to make any more bets, and there's no way to recover.
Games are generally designed so that as long as you're still sitting around the table, you still get to affect the outcome. Games with many players might have someone lose and be eliminated, and then that player sometimes spectates and sometimes wanders off to finish the last of the pizza or goes home for the night.
(I want to note another reading where this is supposed to be talking about the people of Earth being the objective. As long as we live, we're still racking up points.)
But once there's nobody left on your team who can take actions, you're locked into whatever the current state of the board happens to be. Even a very good position in chess, one where you've got both your rooks and both your bishops and the other fellow only has three pawns and a knight total, is not going to be a victory for you if you stop being allowed to make moves and they are.
Sometimes in a team game it can make sense to trade away your individual actions if you help your team and trust them to carry you all to victory. This is essentially what Dumbledore did, sacrificing himself for Harry. But you really have to have a team mentality, and even then you're not sitting at the table able to steer.
When I'm making decisions and tradeoffs these days, one of my prime considerations is whether a move means I'm no longer able to influence a situation.
(To be clear, I'm not generally faced with tradeoffs where I wouldn't be able to take any actions anywhere - or at least, not more than most of us do deciding whether to risk the chance of heart attack and eat that next slice of bacon.)
That can come in many forms.
In a game of Magic: The Gathering, I need to keep cards in my hand and creatures on the field. The game mostly assures me that I'll get to keep having turns (unless the other person does something very odd and specific, like chaining together Time Walks) but those turns might not let me do anything but draw and pass. When contemplating tradeoffs, I lean towards keeping at least one option open in case a better tradeoff comes along.
When helping manage a conflict, if everyone involved stops listening to me I stop being able to influence things. If they stop telling me things, then I lose the ability to even know what's going on. This leads me to prioritize leaving doors open at least a crack.
When I'm messing with a computer system, I'm careful to keep track of what needs to be operational in order for me to keep changing things. Once upon a time I was remoted into a system, sent a shutdown command thinking I'd just turn it off and on again, and then realized I had turned it off without having a way to turn the thing back on again. (Server farms have answers for this, but a desktop sitting in my apartment while I'm on my laptop hundreds of miles away does not.) Anyone who has ever messed up something low level and important in their operating system has had that sinking feeling where you're working through what you need to do to fix the thing that lets you type words into a file.
When I'm running operations for an event, it is tempting sometimes to leave HQ or worse, the venue. Doing so has the danger that, even though it's temporary, I'm no longer able to change course as easily. Even if I am the best suited person to handle something, I still often delegate to keep myself able to react. And this is a very temporary situation!
And of course, you should keep your eye on the larger game.
"He had decided to live forever or die in the attempt, and his only mission each time he went up was to come down alive."
Catch-22, Joseph Heller
If I die, I stop getting to make decisions.
For me, my decisions no longer mattering and where I can't even theoretically change things is pretty scary. I don't like that feeling. I will sometimes make what look like strange lopsided tradeoffs just to stay in the game, and when I'm not doing that it's generally after staring at the board and making my last best move to try and lock things into the best course I can before turning away from that game.
Organizationally, that means I spend a lot of time shoring up and empowering adjacent organizations. I don't need my team to have all the keys. I'm cheerful about the usual capitalist competition and when I was in for-profit companies I was on board with outselling and out-earning everyone else, but I also wrote up a lot of what I was working on and swapped general tips with engineers at other companies.[2] The king on the chessboard for the company is avoiding going bankrupt. (Though for the people involved of course it's their own careers.)
Professionally, that means planning for succession. If I get hit by a truck tomorrow, I always want my role to be reassigned, thinking of my job description as the active thing that will still try and make decisions.
On a personal level, I really, really do not want to die. I don't really trust other people to make the actions I would make.
Dumbledore has more fellow feeling for other people than I do, I think. It probably helps that he's gotten to nurture Harry, that he leaves behind a legacy of other people he trusts to try and make the world better by his lights.
Consider if there's some feature of the landscape where, if you lose it, you no longer get to take actions.