"Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts" by Annie Duke
A Book Review by Jon Bircher
1-minute summary
"Thinking in Bets" is one of my favourite books on decision-making. It is straightforward, engaging, and highly practical. Annie Duke, a former poker champion turned decision strategist, has crafted a compelling read. Her core insight is that making real-life decisions closely resembles poker. Decision-making, much like poker, involves complexity, uncertainty, ambiguity, risk, bluffing, second-guessing, and often the influence of other people.
Duke argues that, unlike chess, poker (and life) is a game of incomplete information, with some of the most critical data concealed by other players. Given the hundreds of hands and decisions a poker player makes in an evening, let alone a lifetime, poker is an excellent laboratory for honing decision-making skills that can be applied to life.
Duke suggests that the quality of our lives hinges on the quality of our decisions and luck. Luck, by its nature, is beyond our control, but we can enhance our decision-making skills through practice, observation, and adaptation. In light of this truth, Duke adeptly explores the misconception that we judge decisions based on outcomes, a bias that results. Given the uncertainty and ambiguity of the future and the role of luck, our best chance for a positive outcome is a well-informed decision followed by effective implementation.
Duke firmly advocates for decision-making based on probability, objectivity, and rationality, rather than relying on 'flawed' intuition or 'emotion'. While I don't entirely agree with this approach, as I believe we should also tap into our intuition, emotions, bodies, and experiences as additional sources of data alongside rational thinking, it doesn't diminish the book's value for me, especially as someone who historically relied heavily on gut instincts.
Treating decisions as bets, as I discovered, helps in avoiding common decision traps, learning from results in a more rational way, and minimizing emotional involvement in the process (page 3).
After introducing the concept and her philosophy, Annie Duke provides a series of tools and techniques to equip all of us as decision-makers to make better choices. One way to achieve this is by considering decisions as probabilities, a concept she intriguingly simplifies with the phrase, "Wanna bet?"
3 Insights
Insight #1 We must engage in some brain training, which begins with admitting "I don't know" or "I am unsure."
Recognising our inherent irrationality and biases is a useful starting point. While much has been written about System 1 (fast, automatic, unconscious) and System 2 (slow, deliberate, careful) thinking, as popularized by Daniel Kahneman in his 2011 bestselling book "Thinking, Fast and Slow," I appreciate Duke's use of language borrowed from Gary Marcus, who describes the reflexive mind and the deliberative mind.
The reflexive system works quickly and automatically, while the deliberative system analyses and considers all the facts. The crucial question for me is how we can become more decisive, like a poker player, when awareness of these systems alone is insufficient. This is where Annie Duke's book becomes invaluable.
Our goal is to ensure that our reflexive minds align with the best intentions of our deliberative minds (page 16).
By embracing the ambiguity and uncertainty of decision-making and avoiding black-and-white right or wrong answers, we foster greater curiosity and collaboration. We begin to experiment, learn from others, calibrate our confidence, and evolve over time. Acknowledging that our decisions are essentially bets based on the available data allows us to make visible the risks, learn from our choices, and challenge and revise our flawed beliefs. This shift in mindset, supported by systems to track and review our decisions, can turn every decision into a brain training opportunity, making us better decision-makers in the future. Of course, we can supplement this process by observing and learning from other people's decisions.
Another reflection on training our reflexive minds to act on our deliberative minds' intentions is to maintain clarity about our vision, our desired future selves, our values, and our character. While it's important to stay curious and update our beliefs in the face of compelling evidence, we also need clarity about who we are becoming, as each decision casts a vote for our future selves.
💡 Top Tip: Duke encourages us to recognise that while these strategies begin with our slower, more deliberative minds and require practice, over time, they become habitual and automatic.
Insight #2: You can create a truth-seeking decision pod to assist you in making and adhering to better decisions.
Annie Duke's proposed buddy system is a brilliant concept, sharing common features with the decision groups we conduct at Salt & Light Coaching.
In essence, it involves bringing together friends, family, co-workers, professional networks, or personal boards where members can engage in discussions about decision-making. The primary aim is to introduce greater objectivity, diversity, and exploratory thinking into the decision process, counteracting our individual confirmatory biases and expanding our options and alternatives.
Once within a group that regularly promotes exploratory thought, this practice becomes reflexive, operating on its own. Exploratory thought transforms into a new habit of thinking, one that is self-reinforced (page 134).
However, to ensure that the group functions effectively according to its purpose, certain specific factors should be considered:
Ensure there are at least three members, two to disagree and one to act as a referee.
Establish a charter focused on seeking truth and making better decisions.
Prioritise accuracy over confirmation, maintain objectivity and avoid echo chambers.
Foster openness to a variety of ideas and alternatives.
Ensure accountability within the group and responsibility for our decisions.
💡 Top Tip: Consider establishing your own decision pod or reach out to us for information on joining one of ours or creating one for yourself.
Insight #3: It is possible to move regret ahead of the decision.
The goal in decision-making is to enhance the quality of choices over time, increasing the likelihood of better outcomes, though not guaranteeing them. In light of this, I find the concept of moving regret ahead of the decision intriguing, as it incorporates aspects of values and character often overlooked in the decision-making process.
Duke offers various tools to assist with this approach. If regret is experienced before making a decision, rather than after, it can prompt a change of choice, potentially avoiding a negative outcome. In this context, regret becomes a valuable and purposeful guide (Page 187).
When we make decisions in the heat of the moment, without considering the past or the future, we are more prone to impulsive, irrational, and poor decision-making. At the very least, we fall prey to temporal discounting, where our current self is favoured over our future self.
Duke recommends introducing decision interruptions to incorporate the experience and objectivity of our past and future selves into the current decision, akin to time-travelling. Simple questions can interrupt our thought process, provide perspective, and challenge our exaggerated emotional responses to in-the-moment situations. These thought experiments help us anticipate negative outcomes and move regret ahead of the decision, leading to better decisions. Straightforward frameworks, such as Suzy Welch's 10-10-10 questions, can be extremely beneficial, whether projected forward or backwards: What are the consequences of this decision 10 minutes, 10 months, 10 years from now? Or, how would I feel if I made this decision 10 minutes ago, 10 months ago, 10 years ago?
One concept I wasn't previously aware of is the idea of "tilt," where a poker player becomes emotionally unhinged due to excessively good or bad outcomes, distorting their decision-making.
Similar to a pinball machine's system to prevent players from tilting the table, we can recognise when we're in tilt as our emotional responses override our cognitive control, leading to irrational, overreactive decisions. Recognising the verbal and physiological signs of tilt, we can pre-commit to stepping away or asking ourselves questions like, "What happened in the past when I felt this way?" We can even establish pre-commitment contracts with ourselves or our decision groups to hold ourselves accountable for behaving rationally.
Other methods to move regret ahead of the decision include creating tangible future scenarios as test beds for different decision outcomes, employing backcasting to work backwards from our vision of success, and using premortems to work back from a place of failure. These techniques interrupt the present moment and help us make better-informed decisions.
💡 Top Tip: Identify the verbal, emotional, and physiological signs of being unfit for decision-making and establish a plan to interrupt decision-making in the moment. Document your learning throughout this process.
My best next step is to delve more intentionally into decision interruptions. I plan to establish stronger accountability within my decision-making group, particularly with Mark, by creating a clearer pre-commitment contract. This will involve recognising when I'm in a state of tilt and becoming curious about the underlying causes, especially in my role as a parent. Beyond that, I intend to write a couple of posts discussing some of the time travel tools presented in this book and elsewhere.