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

by Annie Duke

Signals that we have zoomed in on a moment, out of proportion with the scope of time: “worst day ever,” “the day from hell.”

Expressions that explicitly signal motivated reasoning, accepting or rejecting information without much evidence, like “conventional wisdom” or “if you ask anybody” or “Can you prove that it’s not true?” Similarly, look for expressions that you’re participating in an echo chamber, like “everyone agrees with me.”

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

Lack of self-compassion: if we’re going to be self-critical, the focus should be on the lesson and how to calibrate future decisions. “I have the worst judgment on relationships” or “I should have known” or “How could I be so stupid?”

Infecting our listeners with a conflict of interest, including our own conclusion or belief when asking for advice or informing the listener of the outcome before getting their input.

Terms that discourage engagement of others and their opinions, including expressions of certainty and also initial phrasing inconsistent with that great lesson from improvisation—“yes, and . . .” That includes getting opinions or information from others and starting with “no” or “but . . .”

This is by no means a complete list, but it provides a flavor of the kinds of statements and thinking that shoul...

“When faced with highly uncertain conditions, military units and major corporations sometimes use an exercise called scenario planning. The idea is to consider a broad range of possibilities for how the future might unfold to help guide long-term planning and preparation.”

The important thing is that we do better when we scout all these futures and make decisions based on the probabilities and desirability of the different futures.

Oettingen recognized that we need to have positive goals, but we are more likely to execute on those goals if we think about the negative futures. We start a premortem by imagining why we failed to reach our goal: our company hasn’t increased its market share; we didn’t lose weight; the jury verdict came back for the other side; we didn’t hit our sales target. Then we imagine why. All those reasons why we didn’t achieve our goal help us anticipate potential obstacles and improve our likelihood of succeeding.

People can express their reservations without it sounding like they’re saying the planned course of action is wrong. Because of that, a planning process that includes a premortem creates a much healthier organization because it means that the people who do have dissenting opinions are represented in the planning.

A premortem forces us to build out that side of the tree where things don’t work out.

used the judge’s reminder that we tend to assume that, once something happens, it was bound to happen.

That’s what hindsight bias is, and we’re all running amok through the forest with a chainsaw once we get an outcome. Once something occurs, we no longer think of it as probabilistic—or as ever having been probabilistic. This is how we get into the frame of mind where we say, “I should have known” or “I told you so.” This is where unproductive regret comes from.