Friday, December 1, 2023

ALL your decisions are really bets

We are used to the idea of poker players and sports fanatics betting but in truth all decisions meet the criteria to be called bets.  Annie Duke's perspective is from her background as a professional poker player.  Outsiders think it is either luck or cheating that allows some to win large amounts of money.  She feels that yes luck does play a role, but so does skill.  Knowing what to do with limited information divides the good players from the poor.  For the rest of us we daily make decisions with incomplete information.   

Most people evaluate decisions on outcomes.  Example of the Seattle Seahawks Super Bowl loss is used.  On the one yard line and second down.  Logically a rush seemed best choice, but the coach opted for a pass and it was intercepted.  Was it really a bad decision?  The decision is covered at different points in the book and in the end one could conclude that it was a good decision with a bad outcome.

Getting caught when drunk driving was considered a matter of bad luck.  I know because decades ago I and most of my friends indulged in that practice.  A better decision was to have a designated driver, a role my daughter was the first to fulfill.    

Quoting the author:  "...getting comfortable with 'I'm not sure" is a vital step to being a better decision maker.  We have to make piece with not knowing."  She quotes physicist James Clerk Maxwell, "Thoroughly conscious ignorance is the prelude to every real advance in science."

The person who wins bets over the long haul is the one with the more accurate beliefs.  Expressing uncertainty can give one more credibility and invites collaboration.  We tend to think good outcomes are the result of our skill while bad outcomes are due to bad luck.  

Habits too often guide our decision making.  Habits are hard to change.  By Charles Duhigg, "To change a habit, you must keep the old cue, and deliver the old reward, but insert a new routine."

A lot of our thinking (and how we make decisions) comes from the people we hang around with.  We are usually attracted to friends who think similar to ourselves.  The author points out we need know people who think differently.  As a bit of sideview the author talks about the changes in the American Supreme Court.  It used to be that each judge would make it a point to hire clerks who had a different political slant.  That has changed and a consequence has been more homogeneity.

Jonathan Haidt advocates for diverse group members provided they can speak up when challenging other viewpoints.  He even is concerned about his own field of social psychologists that is too top heavy with liberal thinkers.  Haidt pointed out one of my prejudices against right wingers.   See

To improve your chances of better decision outcomes we need to improve our processes.  That is get more information, not assume that all bad outcomes are solely the result of bad luck.  Bad luck is common if we look how many losers there are in lotteries.

 Meticulous planning went into two major events Annie notes  The Normandy Invasion and the assassination of Osama bin Laden.  They tried to anticipate what could go wrong and how best to deal with it.  Luck mostly co-operated, but some things did not go as hoped, but remedies helped to keep the projects going forward.  Jimmy Carter was in a deep corner with the Iran hostage crisis and had decided to send military helicopters, but as you might recall the weather did not co-operate and mechanical failures helped scuttle the project.  Hopefully the authorities learned a few lessons.

The author does not guarantee good outcomes, she has lots of advice on how to improve the process

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