The value of accepting the unknown - Deepstash

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The value of accepting the unknown

A poor understanding of good or bad luck can derail the decision making of bankers, judges, and athletes. Being aware of probability will prevent you from reading too much into random events, or 'spotting' trends when there are none.

In the current pandemic, where governments design policies based on limited data, we could all do with a better understanding of uncertainty and how to think about it under pressure.

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Tilting means realizing that your emotions are not separate from the logic of your decision making - for example, the despair that comes from bad luck, or the overconfidence that comes from a win.

You can learn to cope better by regularly checking in with yourself...

  • Much of what you need to know in life is hidden from you. You need to make decisions, but is still the victim of chance or uncertainty.
  • We tend to over-estimate the role of our own skills. The more people overestimate the importance of their own ab...

To avoid the trap of overestimating our own skill, we need to start thinking probabilistically. That means estimating the odds and adapting your decision-making accordingly.

Even if the decision had a good outcome, we still need to objectively analyse the quality of the de...

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Gambler’s Fallacy

The odds are always fifty-fifty. But most of us anticipate better odds, or better luck, after a bad streak, as if now we are due for good luck.

This ‘Gambler’s Fallacy’ assumes that probability as a whole has memory, and if the coin is flipped ten times and shows ‘head...

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People have a natural tendency to conflate the quality of a decision with the quality of its outcome. They're not the same thing. 

You can make a smart, rational choice but still get poor results. That doesn't mean you should have made a different choice; it simply means that other f...

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  • Annie uses the example of poker, but it applies to other areas as well. There are uncertain systems where outcomes and decisions are loosely linked.
  • In poker, you can have the best hand and get crushed or a poor hand and win
  • How do you separate yourself from the outcomes and ...

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