Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts

Thinking in Bets

Authors: Annie Duke,

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Annie Duke shows you a smarter approach to decision-making, where you analyze the odds of your decision failing and prepare for failure as well. Not only will this guarantee success in the long run, it will also boost your confidence and help you remain calm even when circumstances change completely.

Quotes & Tips from Thinking in Bets

The Promise of this book
The promise of this book is that if we follow the example of poker players by making explicit that our decisions are bets, we can make better decisions and anticipate (and take protective measures) when irrationality is likely to keep us from acting in our best interest.

The Process
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.

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

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 thought about the alternatives and probabilities in advance and allocated our resources accordingly 

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.

Luck

The quality of our lives is the sum of decision quality plus luck.

Making better decisions starts with understanding this: uncertainty can work a lot of mischief

Poker & Decisions

The value of poker in understanding decision-making has been recognized in academics for a long time

Motivated Reasoning
Once a belief is lodged, it becomes difficult to dislodge. It takes on a life of its own, leading us to notice and seek out evidence confirming our belief, rarely challenge the validity of confirming evidence, and ignore or work hard to actively discredit information contradicting the belief. This irrational, circular information-processing pattern is called motivated reasoning. The way we process new information is driven by the beliefs we hold, strengthening them. Those strengthened beliefs then drive how we process further information, and so on

Thinking in bets
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.

Reflexive vs Deliberative Thinking
Our thinking can be divided into two streams, one that is fast, automatic,and largely unconscious, and another that is slow, deliberate, and judicious. The first system, the reflexive system, seems to do its thing rapidly and automatically, with or without our conscious awareness. The second system, the deliberative system . . . deliberates, it considers, it chews over the facts. 

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