Annie Duke headshot with red Thinking in Bets cover

Thinking in Bets: insights on decision science from the 2018 book by Annie Duke

Life is poker, not chess.

We operate with limited information and are outcomes are heavily influenced by others with varied priorities. That’s the setup for the 2018 book Thinking in Bets by poker player Annie Duke. She was near to several poker scandals but has since focused on decision science — with her poker past as an effective storytelling device.

It was popular in business circles. The book is effective in conveying a clear overall point and synthesizing relevant research. I enjoyed it and would recommend it.

Below I share notes for my future reference.

Here are my notes:

  • A bet is “a decision about an uncertain future”
  • Outcome quality and decision quality are different. Poker players caution against this by calling it “resulting”. Review your process, recognizing outcomes are influenced by that beyond your control.
  • Getting home safely after driving drunk is a bad decision with a good outcome.
  • Our reflexive fast brain (older brain) and deliberative brain (slow, prefrontal cortex ). Daniel Kahneman and Gary Marcus among other academics popularized this distinction.
  • John von Neumann (1903-1957): He influenced game theory and was the inspiration for the Strangelove character, and so much more (Author says he was a poker player too)
  • Von Neumann: chess is a computation; poker is a game, like life, of deceit and competition
  • “Chess contains no hidden information and very little luck”
  • Author praises the use of responding honestly with “I’m not sure”
  • “What makes a great decision 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 their own state of knowledge. That state of knowledge, in turn, is some variation of ‘I’m not sure”
  • Our first-held beliefs are strongly held: In 1994 Hollyn Johnson’s research in Journal of Experimental Psychology: Subjects read a news article with an assumed cause of the fire. Then later are given a correction but their assumptions are still not changed.
  • “They Saw A Game” is a famous 1954 study showing we bring bias; 2011 Stanford They Saw a Protest study showed again
  • Motivated reasoning: we find tools to back up our beliefs
  • Eli Pariser coined “filter bubble” in his 2011 book (and continues activism)
  • As Kaheman points out: we either swing from 100% right to 100% wrong on a belief, or just ignore or explain away new facts. (B) is easier. (So don’t count yourself 100% anything)
  • 2012: psychologists Richard West, Russel Meserve and Keith Stanovich blind spot analysis shows smarter people are more biased because they construct narratives to defend : “Furthermore people who are aware of their own biases were not better able to overcome them”
  • Dan Kahn’s motivated reasoning work showed more numerate people did worse with political data: “This pattern of polarization… does not abate among high numeracy subjects. Indeed it increases.”
  • Most of our learning process follows three steps:
    • We hear something
    • We believe it
    • Only later do we challenge it, maybe. (Saying “wanna bet” makes us do that)
  • “We would be better served as communicators and decision-makers if we thought less about whether we are confident in our beliefs and more about how confident we are.” (68)
  • Using a percentage (I am 62% sure) makes it a lot easier to back down than 100%. She calls this “belief calibration”
  • Aldous Huxley wrote “experience is not what happens to a man; it is what a man does with what happens to him.”
  • Dan Ariely “predictably irrational”
  • Fritz Heider “self serving bias”
  • We call it bad luck and good skill, which keeps us from learning
  • Poker player Phil Hellmuth famously said “ i’d win every time if it wasn’t for luck”
  • In the foreword to the 1976 Richard Dawkins classic Selfish Gene, Robert Trivers wrote how self deception is likely helpful for evolution (we get better partners if we deceive them and to deceive them we have to deceive ourselves).
  • Jean Cocteau: “We must believe in luck. For how else can we explain the success of those we don’t like?”
  • Sonja Lyubomirsky’s research shows objective goals (having a comfortable home, our health, etc) account for just 8-15% happiness, far more is about whom we compare ourselves to
  • Habit: cue, routine and reward
  • Charles Duhigg from his 2012 book Power of Habit: “To change a habit he must keep the old queue, and deliver the old reward, insert a new routine.”
  • Confirmatory thought vs exploratory thought : Phil Fetlock and Jennifer Lerner
  • Get a friend to push you past confirmation bias into exploratory thought (two to disagree and one to referee)
  • Truth seeking group: 1) focus on accuracy; 2. accountability; 3. Openness to ideas
  • Examples of challenging behavior: State department has a dissent channel; American foreign service association has four awards for dissent; the CIA introduced red teams to challenge them, which involved in Osama bin Laden raid intelligence; Devils advocate from Catholic Church against canonization
  • New York Times 2010 story on Supreme Court justices that once employed clerks of various political ideologies. No longer does so (author says this stopped with Justice John Roberts in 2005) Clarence Thomas only ever hired clerks from Republican appointed judges
  • Heterodox Academy to fight liberal bias in sociologists
  • The Reproducibility Project focused on psychology with behavioral economist Anna Dreeber. She found that in traditional peer review psychologists correctly guessed whether an experiment would be replicated 58% of the time, but when she set up a betting market they predicted correctly 71% of the time. (Bets are taxes on bullshit!)
  • South Philadelphia bred Meyer Schkolnick changed his name and became an influential physiologist for CUDOS. He coined the terms role model, self-fulfilling prophecy, reference group, unintended consequences and focus group.
  • “Without free access to information, it is impossible to make a reason assessments of our government”
  • Roshomon Effect
  • Plutarchlife of Lucille’s shoot the messenger origins
  • 1967 New England journal of medicine article argued influentially that fat was worse than sugar; in 2016 was it determined those Harvard researchers had been paid by the sugar lobby
  • Outcome blind analysis a wave for more accurate science
  • Richard Feynman lean over backwards
  • Endel Tulving’s chronesthesia
  • Temporal discounting
  • Time travel is effective when you think about past, present and future view. Nietzsche said that remorse was “adding to the first act of stupidity a second. “ But Thoreau said “make the most of your regrets; never smother your sorrow, but tendon cherish it till it comes to have a separate an integral interest. To regret deeply still live a fresh.”
  • Suzy Welch 10-10-10: What are the consequences for this in 10 minutes, 10 months and 10 years?
  • “it doesn’t so much matter where we end up as how we got there. What is happening in the recent past drives are emotional response much more than how we are doing overall”
  • My own aside: tell me what your job has lots of jargon for and I’ll know what you do a lot of. (Surfers have 20 words for different waves, neuro oncology have 120 words for tumors and carpenters have a dozen words for nails. In poker they have words for bad outcomes that mess with your emotions, like tilt.)
  • Ulysses contract (ie auto retirement savings )
  • Scenario planning: for budgets this means multiplying revenue by likelihood of getting that Revenue. This is probabilistic cash flow projections
  • We can’t assume current conditions will remain stable
  • “Prospective hindsight” : imagining the event has already happened and working backward from how. This is backcasting. “We achieved our goal!” Now how did we get there
  • Premortem is the opposite: imagining what could go wrong.
  • The percentage likelihood you imagine between the good and the bad can only equal 100% likelihood
  • Hindsight bias : the human tendency to believe whatever happened was inevitable
  • Probabilities: Nate silver called 2016 election as 70% likely for Clinton, not a guarantee
  • “Life is one long game of poker”

Leave a Reply