Annie Duke’s Thinking In Bets is a thorough examination of decision-making. Her book studies the way people make decisions and offers suggestions for how we can improve our decision-making in the future. A bet, which she defines as a decision about an uncertain future, is a manner of making decisions that she is familiar with from her career as a poker player and much of her book focuses on the mental techniques she used in her playing days to determine whether or not to wager on a given hand.
This book is basically about how to apply a gambler’s thought process to all manners of decision making. The underlying assumption of Thinking In Bets is that bettors tend to make better predictions about the future than those who only make predictions without betting. It isn’t perfectly clear to me why this is the case but it certainly feels true to me after decades of reading and observation. The simplest explanation is probably the best one – when people wager, they have more at risk than those who do not. Therefore, they work harder to make a correct prediction because their bet acts as a way to protect and profit from a prediction.
One common mistake Duke warns against is equating the quality of a decision with the quality of the outcome. I suspect most people know this intuitively but often forget it as soon as a decision leads to a particularly poor (or good) outcome. Over a couple of upcoming posts, we’ll take a closer look at the way Duke recommends analyzing outcomes before considering how this analysis can improve our decision making skills.
