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Thinking in Bets

Thinking in Bets

by Annie Duke

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ANNIE DUKE

“In most of our decisions, we are not betting against another person. Rather, we are betting against all the future versions of ourselves that we are not choosing.”

ANNIE DUKE

“Improving decision quality is about increasing our chances of good outcomes, not guaranteeing them.”

ANNIE DUKE

“Thinking in bets starts with recognizing that there are exactly two things that determine how our lives turn out: the quality of our decisions and luck. Learning to recognize the difference between the two is what thinking in bets is all about.”

Resulting means judging the quality of a decision based on the quality of the result.

Our tendency is to equate the quality of a decision with the quality of its outcome. The prevents us from accurately assessing the quality of our decisions and the role of luck in the ...

Life is Poker, Not Chess

Life is not like chess. Chess contains no hidden information and very little luck.

Life is more like poker. You could make the smartest, most careful decision and still have it blow up in your face.

A bet is a decision about an uncertain future. Thus, most of the decisions in your life – switching jobs, choosing a partner, selecting your field of study, not doing something – are bets.

They’re choices that you make in the face of an uncertain future.

ANNIE DUKE

“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 n...

How We Form Our Beliefs

This is how we think we form our beliefs:

  • We hear something
  • We think about it and then determine whether if it is true or false
  • We form our belief

This is how we actually form our beliefs:

    People are better at recognizing biased reasoning in others but are blind to bias in themselves. 

    • Being smart can actually make bias worse. Blind-spot bias is worse the smarter you are.
    • Being smart and aware of your capacity for irrationality alone doesn’t help...

    The Rashomon Effect

    Even when people experience the same event at the same time, if you ask them about it, you will often get two very different accounts about what happened.

    That’s because the way we interpret the world is not only a function of the objective experience but includes how we see and ch...

    It is important to have a go-to group of people with a common interest in thinking in bets.

    The characteristics of a good group to practice truth-seeking with:

    • A focus on accuracy (over confirmation), which includes rewarding truth-seeking, objectivity, and open-mindedness wi...

    • Express uncertainty: If we start by making clear our uncertainty, our audience is more likely to understand that the discussion held does not always have to be about right or wrong but about openness to different perspectives.
    • Lead with assent: Every...

    Scenario Planning

    Scenario planning is a productive skill to develop in decision making because:

    • It reminds us that the future is uncertain, giving a more realistic view of the world
    • It prepares us for how to respond to different outcomes that might respond from our initial decisions
    • Ant...

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