12 great quotes from Annie Duke’s “Thinking in Bets”

Annie Duke wrote an excellent book that teaches you how to make better decisions by thinking of each choice you make as a bet. When you start thinking in bets, a few things start to happen to the quality of your decision-making, the most important of these is that you learn to separate processes from outcomes.

This is an essential skill for many professions, but perhaps none more than high stakes professional poker players. Duke honed her abilities at the poker table, earning more than $4,000,000 in tournament earnings. She is also a World Series of Poker Champion, having won the 2004 $3,000 Omaha High-Low 8/OB. She also served as a consultant to Logic, a company that developed online poker software for multiplayer poker websites.

Today she lectures on behavior decision science and cognitive psychology, using lessons from the poker table to help everyone improve the quality of their decisions. The following are some of the best quotes and ideas from her book, Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts.

Decision-making process

“Drawing an overly tight relationship between results and decision quality affects our decisions every day, potentially with far-reaching, catastrophic consequences.”

“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.””

“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.”

The power of truthseeking

“Truthseeking, the desire to know the truth regardless of whether the truth aligns with the beliefs we currently hold, is not naturally supported by the way we process information. We might think of ourselves as open-minded and capable of updating our beliefs based on new information, but the research conclusively shows otherwise. Instead of altering our beliefs to fit new information, we do the opposite, altering our interpretation of that information to fit our beliefs.”

“It’s also helpful to recognize that people serve different purposes in our lives. Even if we place a high value on truthseeking, that doesn’t mean everyone in our lives has to adopt that or communicate with us in that way. Truthseeking isn’t a cult; we don’t have to cut off people who don’t share that commitment. Our pilates friends or our football friends or any of our friends shouldn’t have to take the red pill to remain our friends. Different friends fill different needs and not all of them need to be cut from the same cloth.”

“Any attempt at accuracy is bound to fall short if the truthseeking group has only limited access to potentially pertinent information. Without all the facts, accuracy suffers.”

Hindsight bias

“Hindsight bias is the tendency, after an outcome is known, to see the outcome as having been inevitable. When we say, “I should have known that would happen,” or, “I should have seen it coming,” we are succumbing to hindsight bias.”

“Just as we have problems with resulting and hindsight bias, when we evaluate decisions solely on how they turn out, we have a mirror-image problem in making prospective decisions. We get only one try at any given decision—one flip of the coin—and that puts great pressure on us to feel we have to be certain before acting, a certainty that necessarily will overlook the influences of hidden information and luck.”

Backcasting and Premortems

“Backcasting and premortems complement each other. Backcasting imagines a positive future; a premortem imagines a negative future. We can’t create a complete picture without representing both the positive space and the negative space. Backcasting reveals the positive space. Premortems reveal the negative space. Backcasting is the cheerleader; a premortem is the heckler in the audience.”

“Despite the popular wisdom that we achieve success through positive visualization, it turns out that incorporating negative visualization makes us more likely to achieve our goals.”

“A premortem is an implementation of the Mertonian norm of organized skepticism, changing the rules of the game to give permission for dissent. Being a team player in a premortem isn’t about being the most enthusiastic cheerleader; it’s about being the most productive heckler.”

“Remember, the likelihood of positive and negative futures must add up to 100%. The positive space of backcasting and the negative space of a premortem still have to fit in a finite amount of space. When we see how much negative space there really is, we shrink down the positive space to a size that more accurately reflects reality and less reflects our naturally optimistic nature.”