Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

by Annie Duke

Telling someone how a story ends encourages them to be resulters, to interpret the details to fit that outcome. If I won a hand, it was more likely my group would assess my strategy as good. If I lost, the reverse would be true. Win a case at trial, the strategy is brilliant. Lose, and mistakes were made. We treat outcomes as good signals for decision quality, as if we were playing chess. If the outcome is known, it will bias the assessment of the decision quality to align with the outcome quality. If the group is blind to the outcome, it produces higher fidelity evaluation of decision quality. The best way to do this is to deconstruct decisions before an outcome is known. Attorneys can evaluate trial strategy before the verdict comes in. Sales teams can evaluate strategy before learning whether they’ve closed the sale. Traders can vet process prior to positions being established or prior to options expiring. After the outcome, make it a habit when seeking advice to give the details without revealing the outcome.