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

One of author Annie Duke’s key insights is: ‘life is more like poker than chess.’

Meaning, we often make decisions and negotiate in an atmosphere of tension and deceit, without all of the information, based on probability (like poker).

As opposed to making choices and deals in a rational, formal, mechanistic context, where all of the information is available, and based on game theory, where we can reasonably assume the other player will make their best move (like chess).

Annie Duke splits lanes between her knowledge and appreciation for academic and experimental psychology, and the hard earned street wisdom she gained as professional high stakes poker player.

The book is basically one cross reference after another between the two worlds, with the intent of animating and clarifying the oft counter intuitive world of statistical probability and behavioral economics.

One of the most important points the author makes is that people frequently judge decisions based on outcomes. And in both life and poker, luck plays a HUGE role. In other words, you can make really good decisions and get unlucky, and vice versa.

The quality of a decision is somewhat independent of the outcome, and if you change course on a good decision based on an unlucky outcome, you’re compounding the problem.

Conversely, if you stay with a bad strategy because it bounces well once, you’re bound to loose in the long run due to regression to the mean (the tendency for anomalous or improbable outcomes to correct to average over many iterations).

In other words, strategies need to be evaluated independently from outcome. And accurately parsing skill from luck is a fraught endeavor.

We tend to attribute our own good outcomes to skill, and our competitors good outcomes to luck. Just to avoid difficult feelings.

But if we can manage to tease the two apart, and accurately assess our own skill (+/-) luck, we can use this clear view as feedback for improvement.

In other words, we trade out the comfort afforded by our own self protective biases, for genuine improvement in skill and wisdom.

According to the author, this all but necessitates gaining the wise counsel of other experts.

In other words, it’s hard to see our own bullshit, but it’s easy to see each others bullshit. And we can trade the favor. We can be bullshit detectors for one another.

Hear hear!

It’s a cool book. The author is interesting and eminently likable. The subject matter is fascinating.

But the book is poorly designed in places and could have been edited down to be less repetitive, or more effective in its summary of previously made points.

I may have given the book a 3.5, or a 3.75 if I had that option. But it’s better than 3 stars, so my hand is forced: 4 ⭐️ ⭐️ ⭐️ ⭐️’s it is.