Thinking In Bets -Making Smarter Decisions When You Don’t Have All the Facts is a book written by Annie Duke, a former poker champion. Duke mastered the art of distinguishing decisions from outcomes and not getting rattled when good decisions go awry.
Now she teaches her clients and audiences at her speaking engagements how to abandon the impossible quest for certainty and get better at evaluating facts, choices, and probabilities.
In nearly every decision, from sports to business to personal relationships, there are factors we can control and predict- and others we can’t. Whether we realize it or not, we practice what Annie Duke calls “Thinking in Bets.”
- How sure am I that this plan will work?
- What is the range of possible outcomes?
- Does the possible rewards justify the risk?
A 5 out 6 chances of success might be great for an investment, but not for the Russian roulette.
Thinking in Bets draws on a wide range of fascinating examples that illustrate powerful (yet virtually maths-free) tools that anyone can implement.
This helps a person to identify lucky mistakes and unlucky moments of brilliance, so one is less vulnerable to reactive emotions, knee-jerk biases, and destructive habits.
Let us dive into interesting points from her book, Thinking in Bets, that stood out in the first chapters.
Woow’s and Ahha points
"I am not sure" : We use this phrase to our advantage.
We are discouraged from saying “I don’t know” or “I am not sure.” We regard those expressions as vague, unhelpful, and even evasive, But getting comfortable with “I am not sure” is a vital step to being a better decision-maker. We have to make peace with not knowing.
"'I don't know' is not a failure but a necessary step toward enlightenment."
~Stuart Firestein (Neuro Scientist).
"Thoroughly conscious ignorance is the prelude to every real advance in science."
~James Clerk Maxwell (physicist)
Two of many reasons why wrapping our arms around uncertainty and giving it a big hug will help us become better decision makers:
1st: “I am not sure” is simply a more accurate representation of the world.
2nd: When we accept we can’t be sure, we are less likely to fall into the trap of black-and-white thinking
As we learn more about how our brains operate, we recognize that we don’t perceive the world objectively. But our goal should be to try.
Redefining Wrong
- Decisions are bets on the future, and they aren’t “right” or “wrong” based on whether they turn out well on any particular iteration.
- An unwanted result doesn’t make our decision wrong if we through about the alternatives and probabilities in advance and allocate our resources accordingly.
- Do not fall in love or even date anybody if you want positive results. The world will give you lots of opportunities to feel bad about being wrong. If we want to measure ourselves by outcomes. Don’t fall for it
- The world is a pretty random place. The influence of luck makes it impossible to predict exactly how things will turn out, and all the hidden information makes it even worse. If we don’t even change the mindset, we are going to have to deal with being wrong a lot. It’s built into the equation.
- Being wrong hurts us more than being right feels good. Being right feels like winning and being wrong feels like losing.
- Getting comfortable with the alignment and all the good things that follow, starts with recognising that you’ve been betting all along.
The book “Thinking in Bets” has interesting points that can help every person to be a great decision-maker. It touches on things we feel bad about when making decisions such as bad luck, uncertainty, risks, rejection, being wrong, losing, failure, and many more. There is a comprehensive understanding of how to critically analyze the existing facts before making decisions and still deciding when no facts at all.
Annie Duke has devoted her life to the study of decision-making under pressure. During her career as a professional poker player, she won over $4 million in tournaments, earned a World Series of Poker bracelet, and is the only woman to have won the WSOP Tournament of Champions and the NBC National Heads-up Poker Championship. Retired from poker since 2012, she is now a corporate speaker and consultant on decision strategy, merging her poker experience and her graduate-level research in psychology at the University of Pennsylvania. She has authored five books, is a co-founder of HowIdecide.org, serves on the board of After-school All-Stars, and is a trustee of the Franklin Institute. She has also won a televised championship in rock paper-scissors.
