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Thinking in Bets

Making Smarter Decisions When You Don’t Have All the Facts

By Annie Duke
13-minute read
Audio available
Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by Annie Duke

In any situation, the best decision isn’t guaranteed to work out, and even terrible decisions can sometimes turn out to be the right ones. So when things go wrong, who do we blame and why? And what about when things go right? In Thinking In Bets: Making Smarter Decisions When You Don’t Have All the Facts (2018), poker champion, author and business consultant Annie Duke shows how our addiction to outcomes leads to irrational thinking and the confusion of luck with skill.

  • Gamblers
  • Decision-phobes
  • Anyone who wants to stop making the same mistakes over and over

For over two decades, writer, coach and speaker Annie Duke was one of the world’s top poker players. In 2004, she earned a World Series of Poker (WSOP) gold bracelet ahead of 234 other players, and in 2010 she won the WSOP Tournament of Champions and the NBC National Heads-Up Poker Championship.

Duke holds a master’s degree in cognitive psychology from the University of Pennsylvania, where she also completed her doctoral coursework before beginning her career in poker. She currently works as a consultant, speaker and author. Her autobiography, Annie Duke: How I Raised, Folded, Bluffed, Flirted, Cursed, and Won Millions at the World Series of Poker, was published in 2005.

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Thinking in Bets

Making Smarter Decisions When You Don’t Have All the Facts

By Annie Duke
  • Read in 13 minutes
  • Audio & text available
  • Contains 8 key ideas
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Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts by Annie Duke
Synopsis

In any situation, the best decision isn’t guaranteed to work out, and even terrible decisions can sometimes turn out to be the right ones. So when things go wrong, who do we blame and why? And what about when things go right? In Thinking In Bets: Making Smarter Decisions When You Don’t Have All the Facts (2018), poker champion, author and business consultant Annie Duke shows how our addiction to outcomes leads to irrational thinking and the confusion of luck with skill.

Key idea 1 of 8

Human minds tend to confuse decisions with their outcomes, which makes it hard to see mistakes clearly.

Super Bowl XLIX ended in controversy. With 26 seconds left in the game, everyone expected Seattle Seahawks coach Pete Carroll to tell his quarterback, Russell Wilson, to hand the ball off. Instead, he told Wilson to pass. The ball was intercepted, the Seahawks lost the Super Bowl, and, by the next day, public opinion about Carroll had turned nasty. The headline in the Seattle Times read: “Seahawks Lost Because of the Worst Call in Super Bowl History”!

But it wasn’t really Carroll’s decision that was being judged. Given the circumstances, it was actually a fairly reasonable call. It was the fact that it didn’t work.

Poker players call this tendency to confuse the quality of a decision with the quality of its outcome resulting, and it’s a dangerous tendency. A bad decision can lead to a good outcome, after all, and good decisions can lead to bad outcomes. No one who’s driven home drunk has woken up the next day and seen it as a good decision just because they didn’t get into an accident.

In fact, decisions are rarely 100 percent right or wrong. Life isn’t like that. Life is like poker, a game of incomplete information – since you never know what cards the other players are holding – and luck. Our decision-making is like poker players’ bets. We bet on future outcomes based on what we believe is most likely to occur.

So why not look at it this way? If our decisions are bets, we can start to let go of the idea that we’re 100 percent “right” or “wrong," and start to say, “I’m not sure.” This opens us up to thinking in terms of probability, which is far more useful.

Volunteering at a charity poker tournament, the author once explained to the crowd that player A’s cards would win 76 percent of the time, giving the other player a 24 percent chance to win. When player B won, a spectator yelled out that she’d been wrong.

But, she explained, she’d said that player B’s hand would win 24 percent of the time. She wasn’t wrong. It was just that the actual outcome fell within that 24 percent margin.

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