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by
Annie Duke
Started reading
April 13, 2022
what a bet really is: a decision about an uncertain future.
treating decisions as bets
Treating decisions as bets, I discovered, helped me avoid common decision traps, learn from results in a more rational way, and keep emotions...
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The promise of this book is that thinking in bets will improve decision-making throughout our lives.
We can get better at separating outcome quality from decision quality, discover the power of saying, “I’m not sure,” learn strategies to map out the future, become less reactive decision-makers, build and sustain pods of fellow truthseekers to improve our decision process, and recruit our past and future selves to make fewer emotional decisions.
Mistakes, emotions, losing—those things are all inevitable because we are human.
The approach of thinking in bets moved me toward objectivity, accuracy, and open-mindedness.
That movement compounds over time to create significant ch...
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out: the quality of our decisions and luck.
Learning to recognize the difference between the two is what thinking in bets is all about.
Why did so many people so strongly believe that Pete Carroll got it so wrong?
the play didn’t work.
“resulting.”
Drawing an overly tight relationship between results and decision quality affects our decisions every day, potentially with far-reaching, catastrophic consequences.
It sounded like a bad result, not a bad decision.
Automatic processing originates in the evolutionarily older parts of the brain, including the cerebellum, basal ganglia, and amygdala.
Our deliberative mind operates out of the prefrontal cortex.
“We have this thin layer of prefrontal cortex made just for us, sitting on top of this big animal brain. Getting this thin little layer to handle more is unrealistic.” The prefrontal cortex doesn’t control most of the decisions we make every day. We can’t fundamentally get more out of that unique, thin layer of prefrontal cortex. “It’s already overtaxed,”
The big decisions about what we want to accomplish recruit the deliberative system.
Most of the decisions we execute on the way to achieving those goals, however, occur in
reflexive...
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It turns out that poker is a great place to find practical strategies to get the execution of our decisions to align better with our goals.
And the value of poker in understanding decision-making has been recognized in academics for a long time.
Dr. Strangelove
John von Neumann
Theory of Games and Economic Behavior in 1944.
John von Neumann
‘Chess is not a game. Chess is a well-defined form of computation. You may not be able to work out the answers, but in theory there must be a solution, a right procedure in any position.
Incomplete information poses a challenge not just for split-second decision-making, but also for learning
from past decisions. Imagine my difficulty as a poker player in trying to figure out if I played a hand correctly when my opponents’ cards were never revealed. If the hand concluded after I made a bet and my opponents folded, all I know is that I won the chips. Did I play poorly and get lucky? Or did I play well?
If we want to improve in any game—as well as in any aspect of our lives—we have to learn from the results of our decisions. The quality of our lives is the sum of decision quality plus luck. In chess, luck is limited in its influence, so it’s easier to read the results as a signal of decision quality. That more tightly tethers chess players to rationality. Make a mistake and your opponent’s play points it out, or it is capable of analysis afterward. There is always a theoretically right ans...
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making. You’ll almost never hear a chess player say, “I was robbed in that game!” or, “I played perfectly and caught some terrible breaks.” (Walk the hallways during a break in a...
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That’s chess, but life doesn’t look like that. It looks more like poker, where all that uncertainty gives us the room to deceive ourselves and misinterpret the data. Poker gives us the leeway to make mistakes that we never spot because we win the hand anyway and so don’t go looking for them, or the leeway to do everything right, still lose, and treat the losing result as proof that we made a mistake. Resulting, assuming that our decision-making is good or...
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Making better decisions starts with understanding this:
uncertainty can work a lot of mischief.
Westley tells her, “They were both poisoned. I’ve spent the last two years building up immunity to iocane powder.”
Now if that person flipped the coin 10,000 times, giving us a sufficiently large sample size, we could figure out, with some certainty, whether the coin is
fair. Four flips simply isn’t enough to determine much about the coin.
When someone asks you about a coin they flipped four times, there is a correct answer: “I’m not sure.”
“I’m not sure”: using uncertainty to our advantage
“I don’t want to be the man who learns. I want to be the man who knows
We are discouraged from saying “I don’t know” or “I’m not sure.” We regard those expressions as vague, unhelpful, and even evasive. But getting comfortable with “I’m not sure” is a vital step to being a better decision-maker. We have to make peace with not knowing. Embracing “I’m not sure” is difficult. We are trained in school that saying “I don’t know” is a bad thing. Not knowing in school is considered a failure of learning.
Write “I don’t know” as an answer on a test and your answer w...
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Of course, we want to encourage acquiring knowledge, but the first step is understanding what we don’t know.
Ignorance.”)
“Thoroughly conscious ignorance is the prelude to every real advance in science.”
What makes a decision great is not that it has a great outcome. A great decision is the result of a good process, and that process must include an attempt to accurately represent our own state of knowledge. That state of knowledge, in turn, is some variation of “I’m not sure.”
What good poker players and good decision-makers have in common is their comfort with the world being an uncertain and unpredictable place. They understand that they can almost never know exactly how something will turn out. They embrace that uncertainty and, instead of focusing on being sure, they try to figure out how unsure they are, making their best guess at the chances that different outcomes will occur.
An expert in any field will have an advantage over a rookie. But neither the veteran nor the rookie can be sure what the next flip will look like. The veteran will just have a better guess.
There are many reasons why wrapping our arms around uncertainty and giving it a big hug will help us become better decision-makers. Here are two of them. First, “I’m not sure” is simply
