Eric Lin's Reviews > Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

tl;dr Acknowledge the (omni)presence of uncertainty in every decision we make, and recognize that "everything is a bet" - even decisions we're very confident in.

In poker, luck is acknowledged as a major factor in every hand. If you have a 50% chance to win a $100 hand, it is a sound decision to bet anything under $50 on the hand. Make this decision enough times, and you will eventually come out ahead (spending anything less than the expected ROI: $50 is net positive). But we have trouble thinking this way in real life, Annie Duke argues. We don't look too closely at our successes, chalking them up to our great skill at decision making, and we don't look too closely at our failures either, usually trying to explain the outcome on bad luck instead.

This book isn't really breaking new ground, necessarily. Thinking, Fast and Slow has covered much of this (and is referred to several times), and I found a bit of The Signal and the Noise: Why So Many Predictions Fail - But Some Don't, and Playing to Win: Becoming the Champion in here as well.

The point is - a lot of the ideas that Duke lays out have been discussed before individually (or even together), but she ties these phenomena together into something resembling a framework for better decision making, with some advice on how to get out of the bad habits she points out. To hit some of the major points:

1. We should try to decouple our assessment of the quality of a decision from the outcome (AKA "resulting").

2. We're wired to always be looking for ways to support our internal narrative that we 'are doing good'. When we make a decision and things go well, it's because "we're smart". When we make a decision and things go poorly, we blame bad luck. This impairs our ability to learn when we make bad decisions (once we start attributing poor outcomes to bad luck, we're divesting ourselves of blame).

3. We can improve... but to do that we have to adopt new habits when making decisions (see highlights for some examples).

As a professional poker player since 1992, Annie Duke has seen millions of poker hands played out. Due her access to other poker pros who make similar decisions, and the undeniable impact of luck on the game, she's been able to see the long view, and understand that good outcomes can come from bad decisions, and vice versa. There are advantages to assessing our decisions as if they were poker hands, and we make better decisions when we acknowledge that we don't (and perhaps will never) know.

Four stars for tying these theories from behavioral psych into a coherent framework, plus an extra star for validating my support for Pete Carroll's decision to throw it on 2nd down on the last play of Super Bowl XLIX.