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

by Annie Duke

Life Is Poker, Not Chess

Why are we so bad at separating luck and skill? Why are we so uncomfortable knowing that results can be beyond our control? Why do we create such a strong connection between results and the quality of the decisions preceding them?

To start, our brains evolved to create certainty and order. We are uncomfortable with the idea that luck plays a significant role in our lives.

MÜLLER-LYER ILLUSION

Chess, for all its strategic complexity, isn’t a great model for decision-making in life, where most of our decisions involve hidden information and a much greater influence of luck.

James Clerk Maxwell: “Thoroughly conscious ignorance is the prelude to every real advance in science.”

In most of our decisions, we are not betting against another person. Rather, we are betting against all the future versions of ourselves that we are not choosing.

We form beliefs in a haphazard way, believing all sorts of things based just on what we hear out in the world but haven’t researched for ourselves.

“filter bubble”

make the massive shift in our opinion of ourselves from 100% right to 100% wrong, or (b) ignore or discredit the new information. It feels bad to be wrong, so we choose (b). Information that disagrees with us is an assault on our self-narrative. We’ll work hard to swat that threat away. On the flip side, when additional information agrees with us, we effortlessly embrace it. How we form beliefs, and

It turns out the better you are with numbers, the better you are at spinning those numbers to conform to and support your beliefs.

We hear something; We believe it; Only sometimes, later, if we have the time or the inclination, we think about it and vet it, determining whether or not it is true.

Not much is ever certain. Samuel Arbesman’s The Half-Life of Facts is a great read about how practically every fact we’ve ever known has been subject to revision or reversal. We are in a perpetual state of learning, and that can make any prior fact obsolete.

The answer is that while experience is necessary to becoming an expert, it’s not sufficient.

Experience can be an effective teacher. But, clearly, only some students listen to their teachers. The people who learn from experience improve, advance, and (with a little bit of luck) become experts and leaders in their fields.

We can’t just “absorb” experiences and expect to learn. As novelist and philosopher Aldous Huxley recognized, “Experience is not what happens to a man; it is what a man does with what happens to him.” There is a big difference between getting experience and becoming an expert. That difference lies in the ability to identify when the outcomes of our decisions have something to teach us and what that lesson might be.

The influence of this paper and its negative effects on America’s eating habits and health provides a stunning demonstration of the imperative of disinterestedness. It was recently discovered that a trade group representing the sugar industry had paid the three Harvard scientists to write the paper, according to an article published in JAMA Internal Medicine in September 2016. Not

The term “devil’s advocate” developed centuries ago from the Catholic Church’s practice, during the canonization process, of hiring someone to present arguments against sainthood. Just as the CIA has red teams and the State Department has its Dissent Channel, we can incorporate dissent into our business and personal lives.

ad hoc

reticent