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

by Annie Duke

If part of corporate success consists of providing the most accurate, objective, and detailed evaluation of what’s going on, employees will compete to win on those terms.

“Don’t shoot the message,” for some reason, hasn’t gotten the same historical or literary attention, but it addresses an equally important decision-making issue: don’t disparage or ignore an idea just because you don’t like who or where it came from.

When I had the impulse to dismiss someone as a bad player, I made myself find something that they did well.

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.

Anyone can provide the narrative only up to the point of the decision under consideration, leaving off the outcome so as not to infect their listeners with bias. And outcomes aren’t the only problem. Beliefs are also contagious. If our listeners know what we believe to be true, they will likely work pretty hard to justify our beliefs, often without even knowing they are doing it. They will develop an ideological conflict of interest created by our informing our listeners of our beliefs. So when trying to vet some piece of information, some fact or opinion, we would do well to shield our listeners from what our opinion is as we seek the group’s opinion.

What I’ve generally found is that two people whose positions on an issue are far apart will move toward the middle after a debate or skilled explanation of the opposing position.

Yet true skepticism is consistent with good manners, civil discourse, and friendly communications.

Skepticism is about approaching the world by asking why things might not be true rather than why they are true. It’s a recognition that, while there is an objective truth, everything we believe about the world is not true. Thinking in bets embodies skepticism by encouraging us to examine what we do and don’t know and what our level of confidence is in our beliefs and predictions. This moves us closer to what is objectively true.

That should also be its communications guide, because true skepticism isn’t confrontational. Thinking in bets demands the imperative of skepticism. Without embracing uncertainty, we can’t rationally bet on our beliefs.

We engage this way simply because that is faithful to uncertainty. Organized skepticism invites people into a cooperative exploration. People are more open to hearing differing perspectives expressed this way.

First, express uncertainty.

Second, lead with assent.

“And” is an offer to contribute. “But” is a denial and repudiation of what came before.

We can think of this broadly as an attempt to avoid the language of “no.” In the performance art of improvisation, the first advice is that when someone starts a scene, you should respond with “yes, and . . .” “Yes” means you are accepting the construct of the situation. “And” means you are adding to it. That’s an excellent guideline in any situation in which you want to encourage exploratory thought.

Third, ask for a temporary agreement to engage in truthseeking.

Finally, focus on the future.

When we validate the other person’s experience of the past and refocus on exploration of the future, they can get to their past decisions on their own.

Accountability to a truthseeking group is also, in some ways, a time-travel portal. Because we know we will have to answer to the group, we start thinking in advance of how that will go.

When making decisions, isolating ourselves from thinking about similar decisions in the past and possible future consequences is frequently the very thing that turns us into a blob, mired by in-the-moment thinking where the scope of time is distorted. As decision-makers, we want to collide with past and future versions of ourselves.

Just as we can recruit other people to be our decision buddies, we can recruit other versions of ourselves to act as our own decision buddies.

In addition, we can make the best possible decisions and still not get the result we want. Improving decision quality is about increasing our chances of good outcomes, not guaranteeing them.

temporal discounting.*

We are willing to take an irrationally large discount to get a reward now instead of waiting for a bigger reward later.

The future we imagine is a novel reassembling of our past experiences. Given that, it shouldn’t be surprising that the same neural network is engaged when we imagine the future as when we remember the past. Thinking about the future is remembering the future, putting memories together in a creative way to imagine a possible way things might turn out.

The problem isn’t so much whether regret is an unproductive emotion. It’s that regret occurs after the fact, instead of before. As Nietzsche points out, regret can do nothing to change what has already happened. We just wallow in remorse about something over which we no longer have any control. But if regret occurred before a decision instead of after, the experience of regret might get us to change a choice likely to result in a bad outcome.

“Every 10-10-10 process starts with a question. . . . [W]hat are the consequences of each of my options in ten minutes? In ten months? In ten years?”

We can build on Welch’s tool by asking the questions through the frame of the past: “How would I feel today if I had made this decision ten minutes ago? Ten months ago? Ten years ago?”

Coming to peace with a bad outcome in advance will feel better than refusing to acknowledge it, facing it only after it has happened.

In our decision-making lives, we aren’t that good at taking this kind of perspective—at accessing the past and future to get a better view of how any given moment might fit into the scope of time.

We would be better off thinking about our happiness as a long-term stock holding.

The way we field outcomes is path dependent. It doesn’t so much matter where we end up as how we got there. What has happened in the recent past drives our emotional response much more than how we are doing overall.

By recognizing in advance these verbal and physiological signs that ticker watching is making us tilt, we can commit to develop certain habit routines at those moments. We can precommit to walk away from the situation when we feel the signs of tilt, whether it’s a fight with a spouse or child, aggravation in a work situation, or losing at a poker table.

This action—past-us preventing present-us from doing something stupid—has become known as a Ulysses contract.

Signs of the illusion of certainty:

Overconfidence:

Irrational outcome fielding:

Any kind of moaning or complaining about bad luck just to off-load it, with no real point to the story other than to get sympathy.

Generalized characterizations of people meant to dismiss their ideas:

Other violations of the Mertonian norm of universalism, shooting the message because we don’t think much of the messenger.

Signals that we have zoomed in on a moment, out of proportion with the scope of time:

Expressions that explicitly signal motivated reasoning, accepting or rejecting information without much evidence,

The word “wrong,” which deserves its own swear jar.

“Wrong” is a conclusion, not a rationale.

Lack of self-compassion:

Signals we’re being overly generous editors when we share a story.

Infecting our listeners with a conflict of interest,

Terms that discourage engagement of others and their opinions,

For us to make better decisions, we need to perform reconnaissance on the future.

The reason why we do reconnaissance is because we are uncertain. We don’t (and likely can’t) know how often things will turn out a certain way with exact precision. It’s not about approaching our future predictions from a point of perfection. It’s about acknowledging that we’re already making a prediction about the future every time we make a decision, so we’re better off if we make that explicit. If we’re worried about guessing, we’re already guessing.

In fact, if two people in the group are really far off on an estimate of the likelihood of an outcome, that is a great time to have them switch sides and argue the other’s position. Generally, the answer is somewhere in the middle and both people will end up moderating their positions. But sometimes one person has thought of a key influencing factor the other hasn’t and that is revealed only because the dissent was tolerated.