Thinking in Bets Quotes

“A premortem is an investigation into something awful, but before it happens.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“Let’s say an enterprise wants to develop a three-year strategic plan to double market share, from 5% to 10%. Each person engaged in the planning imagines holding up a newspaper whose headline reads “Company X Has Doubled Its Market Share over the Past Three Years.” The team leader now asks them to identify the reasons they got there, what events occurred, what decisions were made, what went their way to get the enterprise to capture that market share. This enables the company to better identify strategies, tactics, and actions that need to be implemented to get to the goal. It also allows it to identify when the goal needs to be tweaked. Backcasting makes it possible to identify when there are low-probability events that must occur to reach the goal. That could lead to developing strategies to increase the chances those events occur or to recognizing the goal is too ambitious. The company can also make precommitments to a plan developed through backcasting, including responses to developments that can interfere with reaching the goal and identifying inflection points for re-evaluating the plan as the future unfolds.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“When we identify the goal and work backward from there to “remember” how we got there, the research shows that we do better. In a Harvard Business Review article, decision scientist Gary Klein summarized the results of a 1989 experiment by Deborah Mitchell, J. Edward Russo, and Nancy Pennington. They “found that prospective hindsight—imagining that an event has already occurred—increases the ability to correctly identify reasons for future outcomes by 30%.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“Imagining the future recruits the same brain pathways as remembering the past. And it turns out that remembering the future is a better way to plan for it. From the vantage point of the present, it’s hard to see past the next step. We end up over-planning for addressing problems we have right now. Implicit in that approach is the assumption that conditions will remain the same, facts won’t change, and the paradigm will remain stable. The world changes too fast to assume that approach is generally valid. Samuel Arbesman’s The Half-Life of Facts makes a book-length case for the hazards of assuming the future is going to be like the present.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“For the decision swear jar, we identify the language and thinking patterns that signal we are veering from our goal of truthseeking. When we find ourselves using certain words or succumbing to the thinking patterns we are trying to avoid because we know they are signs of irrationality, a stop-and-think moment can be created. You can think about this as a way to implement accountability”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“Now imagine if you had gone for that night of blackjack a year ago. When you think about the outcomes as having happened in the distant past, it is likely your preference for the results reverses, landing in a more rational place. You are now happier about the $100 win than about the $100 loss. Once we pull ourselves out of the moment through time-traveling exercises, we can see these things in proportion to their size, free of the distortion caused by whether the ticker just moved up or down.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“The way we field outcomes is path dependent. It doesn’t so much matter where we end up as how we got there. What has happened in the recent past drives our emotional response much more than how we are doing overall. That’s how we can win $100 and be sad, and lose $100 and be happy. The zoom lens doesn’t just magnify, it distorts. This is true whether we are in a casino, making investment decisions, in a relationship, or on the side of the road with a flat tire. If we got a big promotion last week and have a flat tire right now, we are cursing our lives, complaining about how unlucky we are. Our feelings are not a reaction to the average of how things are going. We feel sad if we are breaking even (or winning) on an investment that used to be valued much higher. In relationships, even small disagreements seem big in the midst of the disagreement. The problem in all these situations (and countless others) is that our in-the-moment emotions affect the quality of the decisions we make in those moments, and we are very willing to make decisions when we are not emotionally fit to do so.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“We can use our past- and future-selves to pull us out of the moment and remind us when we’re watching the ticker, looking at our lives through that lens on extreme zoom. When we view these upticks and downticks under the magnification of that in-the-moment zoom lens, our emotional responses are, similarly, amplified. Like the flat tire in the rain, we are capable of treating things that will have little effect on our long-term happiness as having significant impact. Our decision-making becomes reactive, focused on off-loading negative emotions or sustaining positive emotions from the latest change in the status quo. We can see how this can result in self-serving bias: fielding outcomes to off-load the negative emotions we feel in the moment from a bad outcome by blaming them on luck and sustaining the positive emotions from good outcomes by taking credit for them. The decisions driven by the emotions of the moment can become a self-fulfilling prophecy, degrading the quality of the bets we make, increasing the chances of bad outcomes, and making things worse.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“The problem isn’t so much whether regret is an unproductive emotion. It’s that regret occurs after the fact, instead of before. As Nietzsche points out, regret can do nothing to change what has already happened. We just wallow in remorse about something over which we no longer have any control. But if regret occurred before a decision instead of after, the experience of regret might get us to change a choice likely to result in a bad outcome. Then we could embrace Thoreau’s view and harness the power of regret because it would serve a valuable purpose. It would be helpful, then, if we could get regret to do some time traveling of its own, moving before our decisions instead of after them. That way, regret might be able to keep us from making a bad bet. In addition, it wouldn’t, as Nietzsche implied, rear its head later by causing us to make a remorse-fueled second mistake.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“Hall of Fame football coach John Madden, in a documentary about Vince Lombardi, told a story about how, as a young assistant coach, he attended a coaching clinic where Lombardi spoke about one play: the power sweep, a running play that he made famous with the Green Bay Packers in the 1960s. Lombardi held the audience spellbound as he described that one play for eight hours. Madden said, “I went in there cocky, thinking I knew everything there was to know about football, and he spent eight hours talking about this one play. . . . I realized then that I actually knew nothing about football.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“We treat outcomes as good signals for decision quality, as if we were playing chess. If the outcome is known, it will bias the assessment of the decision quality to align with the outcome quality.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“I developed an exercise to practice and reinforce universalism. When I had the impulse to dismiss someone as a bad player, I made myself find something that they did well. It was an exercise I could do for myself, and I could get help from my group in analyzing the strategies I thought those players might be executing well. That commitment led to many benefits.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“If you want to pick a role model for designing a group’s practical rules of engagement, you can’t do better than Merton. To start, he coined the phrase “role model,” along with “self-fulfilling prophecy,” “reference group,” “unintended consequences,” and “focus group.” He founded the science of sociology and was the first sociologist awarded the National Medal of Science.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“Accountability, like reinforcement of accuracy, also improves our decision-making and information processing when we are away from the group because we know in advance that we will have to answer to the group for our decisions.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“We don’t win bets by being in love with our own ideas. We win bets by relentlessly striving to calibrate our beliefs and predictions about the future to more accurately represent the world. In the long run, the more objective person will win against the more biased person. In that way, betting is a form of accountability to accuracy. Calibration requires an open-minded consideration of diverse points of view and alternative hypotheses. Wrapping all that into your group’s charter makes a lot of sense.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“In addition to accountability and an interest in accuracy, the charter should also encourage and celebrate a diversity of perspectives to challenge biased thinking by individual members. Jonathan Haidt, a professor at New York University’s Stern School of Business, is a leading expert in exploring group thought in politics. Haidt, in his book The Righteous Mind: Why Good People Are Divided by Politics and Religion, built on Tetlock’s work, connecting it with the need for diversity. “If you put individuals together in the right way, such that some individuals can use their reasoning powers to disconfirm the claims of others, and all individuals feel some common bond or shared fate that allows them to interact civilly, you can create a group that ends up producing good reasoning as an emergent property of the social system. This is why it’s so important to have intellectual and ideological diversity within any group or institution whose goal is to find truth.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“Lerner and Tetlock offer insight into what should be included in the group agreement to avoid confirmatory thought and promote exploratory thought. “Complex and open-minded thought is most likely to be activated when decision makers learn prior to forming any opinions that they will be accountable to an audience (a) whose views are unknown, (b) who is interested in accuracy, (c) who is reasonably well-informed, and (d) who has a legitimate reason for inquiring into the reasons behind participants’ judgments/choices.” Their 2002 paper was one of several they coauthored supporting the conclusion that groups can improve the thinking of individual decision-makers when the individuals are accountable to a group whose interest is in accuracy.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“This makes us more compassionate, both toward ourselves and others. Treating outcome fielding as bets constantly reminds us outcomes are rarely attributable to a single cause and there is almost always uncertainty in figuring out the various causes.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“In the movie, the matrix was built to be a more comfortable version of the world. Our brains, likewise, have evolved to make our version of the world more comfortable: our beliefs are nearly always correct; favorable outcomes are the result of our skill; there are plausible reasons why unfavorable outcomes are beyond our control; and we compare favorably with our peers. We deny or at least dilute the most painful parts of the message. Giving that up is not the easiest choice. Living in the matrix is comfortable. So is the natural way we process information to protect our self-image in the moment. By choosing to exit the matrix, we are asserting that striving for a more objective representation of the world, even if it is uncomfortable at times, will make us happier and more successful in the long run.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“The benefits of recognizing just a few extra learning opportunities compound over time. The cumulative effect of being a little better at decision-making, like compounding interest, can have huge effects in the long run on everything that we do.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“Thinking in bets triggers a more open-minded exploration of alternative hypotheses, of reasons supporting conclusions opposite to the routine of self-serving bias. We are more likely to explore the opposite side of an argument more often and more seriously—and that will move us closer to the truth of the matter. Thinking in bets also triggers perspective taking, leveraging the difference between how we field our own outcomes versus others’ outcomes to get closer to the objective truth. We know we tend to discount the success of our peers and place responsibility firmly on their shoulders for their failures. A good strategy for figuring out which way to bet would be to imagine if that outcome had happened to us.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“Charles Duhigg, in The Power of Habit, offers the golden rule of habit change—that the best way to deal with a habit is to respect the habit loop: “To change a habit, you must keep the old cue, and deliver the old reward, but insert a new routine.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“Ideally, our happiness would depend on how things turn out for us regardless of how things turn out for anyone else. Yet, on a fundamental level, fielding someone’s bad outcome as their fault feels good to us. On a fundamental level, fielding someone’s good outcome as luck helps our narrative along. This outcome fielding follows a logical pattern in zero-sum games like poker. When I am competing head-to-head in a poker hand, I must follow this fielding pattern to square my self-serving interpretation of my own outcomes with the outcomes of my opponent. If I win a hand in poker, my opponent loses. If I lose a hand in poker, my opponent wins. Wins and losses are symmetrical. If I field my win as having to do with my skillful play, then my opponent in the hand must have lost because of their less skillful play. Likewise, if I field my loss as having to do with luck, then my opponent must have won due to luck as well. Any other interpretation would create cognitive dissonance.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“If our only options are being 100% right or 100% wrong, with nothing in between, then information that potentially contradicts a belief requires a total downgrade, from right all the way to wrong. There is no “somewhat less sure” option in an all-or-nothing world, so we ignore or discredit the information to hold steadfast in our belief.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“When we field our outcomes as the future unfolds, we always run into this problem: the way things turn out could be the result of our decisions, luck, or some combination of the two.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“Rats get tripped up by uncertainty in a way that should appear very familiar to us. Classical stimulus-response experiments have shown that the introduction of uncertainty drastically slows learning. When rats are trained on a fixed reward schedule (for example, a pellet for every tenth press of a lever), they learn pretty fast to press that lever for food. If you withdraw the reward, the lever-pressing behavior is quickly extinguished. The rats figure out that no more food is on its way. But when you reward the rats on a variable or intermittent reinforcement schedule (a pellet that comes on average every tenth lever press), that introduces uncertainty. The average number of lever presses for the reward is the same, but the rat could get a reward on the next press or not for thirty presses. In other words, the rats are rewarded the way humans usually are: having no way to know with certainty what will happen on the next try. When you withdraw the reward from those rats, the lever-pressing behavior extinguishes only after a very long time of fruitless lever pushing, sometimes thousands of tries.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“Outcomes don’t tell us what’s our fault and what isn’t, what we should take credit for and what we shouldn’t. Unlike in chess, we can’t simply work backward from the quality of the outcome to determine the quality of our beliefs or decisions. This makes learning from outcomes a pretty haphazard process. A negative outcome could be a signal to go in and examine our decision-making. That outcome could also be due to bad luck, unrelated to our decision, in which case treating that outcome as a signal to change future decisions would be a mistake. A good outcome could signal that we made a good decision. It could also mean that we got lucky, in which case we would be making a mistake to use that outcome as a signal to repeat that decision in the future.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“The way our lives turn out is the result of two things: the influence of skill and the influence of luck.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“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.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

“I can say that Nick the Greek lost a lot of money based on his beliefs—or, more accurately, because he ignored lots of feedback that his strategy was a losing one. He eventually went broke because he didn’t recognize learning opportunities as they arose.”
― Annie Duke, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts