Thinking In Bets: Making Smarter Decisions When You Don’t Have All the Facts
By: Annie Duke
Portfolio (February 6, 2018)
Thinking In Bets is about just that, making decisions like a poker player would. Annie Duke shows us the difference in binary predictions vs probabilistic ones. In short, for each decision we make, one can have made #1: A good decision, or bad decision, #2: Have good luck, or bad luck, and #3: Have a good outcome, or a bad outcome. The problem here is that many people judge decisions based on outcomes. But the best decision is the best decision, regardless of what happens later.
Two of my favorite quotes:
I fell in love with poker right away. It wasn’t the bright lights of Vegas that lured me in, but the thrill of playing and testing my skills in the basement of a Billings bar named the Crystal Lounge. I had a lot to learn, but I was excited to learn it. My plan was to earn some money during this break from school, stay on the academic path, and continue playing poker as a hobby. My temporary break turned into a twenty-year career as a professional poker player. When I retired from playing in 2012, I had won a World Series of Poker gold bracelet, the WSOP Tournament of Champions, and the NBC National Heads-Up Championship, and earned more than $ 4 million in poker tournaments.
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 not sure.” “I’m not sure” does not mean that there is no objective truth. Firestein’s point is, in fact, that acknowledging uncertainty is the first step in executing on our goal to get closer to what is objectively true. To do this, we need to stop treating “I don’t know” and “I’m not sure” like strings of dirty words.