I just finished reading Thinking In Bets by poker player Annie Duke. I found myself highlighting the book in a lot of places, and overall I thought it was a good book. The main idea is to think about decision making through the lens of poker and bets. She introduces a number of poker and psychology terms that encapsulate lots of the big ideas from the book.
One good idea from the start is resulting, or equating the quality of a decision with the quality of its outcome. Basically the concept being that just because something bad happened you think that is a bad decision, when really there is a skill and luck component, and you could have approached it well and made a good decision but gotten unlucky.
So the key here is being diligent to separate good and bad results with good and bad decisions–they are not the same thing.
She introduces the idea of challenging someone to a bet as a way to revisit our beliefs. Essentially people may have a lot of beliefs that aren’t based on anything solid or are just wrong. For a lot of reasons, when people hear things, they default to thinking they are true. So these misconceptions can carry on for a long time. When someone challenges you with the sentence: “wanna bet?” it causes you to revisit your assumptions. How do you know what you know? Are you sure? What was the source on that? So just even thinking about betting makes you revisit and improve those beliefs and facts.
She also spends a lot of time in the book talking about “mental time travel.” This essentially is the idea of imagining a future or possible futures, or thinking about the probability of certain events as a way to evaluate them. Or to time travel into the past to separate yourself from the emotion of the decision in the present moment. Poker players may be on “tilt” when they are so caught up emotionally that they could make bad decisions. So you can imagine into the future. Or you can go to the future and imagine a good outcome and figure out how you got there – that would be backcasting. You could also imagine into a future where things didn’t go right and think about what may have gone wrong in advance, that would be a premortem. She talks about the idea of a Ulysses contract – basically making a decision at a calmer moment to set a cap or restriction to make it more likely to make a good decision in the heat of the moment. This comes from Ulysses asking to have his hands tied when they passed the Sirens in the Odyssey.
So overall an interesting book that I would recommend.
Notes and highlights for Thinking in Bets
INTRODUCTION: Why This Isn’t a Poker Book
Highlight (yellow) – Page 3 · Location 113
Over time , those world – class poker players taught me to understand what a bet really is : a decision about an uncertain future .
Highlight (yellow) – Page 4 · Location 132
Thinking in bets starts with recognizing that there are exactly two things that determine how our lives turn out : the quality of our decisions and luck . Learning to recognize the difference between the two is what thinking in bets is all about .
CHAPTER 1: Life Is Poker, Not Chess
Highlight (yellow) – Pete Carroll and the Monday Morning Quarterbacks > Page 7 · Location 163
Pete Carroll was a victim of our tendency to equate the quality of a decision with the quality of its outcome . Poker players have a word for this : “ resulting . ” When I started playing poker , more experienced players warned me about the dangers of resulting , cautioning me to resist the temptation to change my strategy just because a few hands didn’t turn out well in the short run .
Highlight (yellow) – Pete Carroll and the Monday Morning Quarterbacks > Page 7 · Location 169
Why are we so bad at separating luck and skill ? Why are we so uncomfortable knowing
Highlight (yellow) – Pete Carroll and the Monday Morning Quarterbacks > Page 7 · Location 170
Why do we create such a strong connection between results and the quality of the decisions preceding them ?
Highlight (yellow) – The hazards of resulting > Page 8 · Location 180
best and worst results rather than their best and worst decisions .
Highlight (yellow) – The hazards of resulting > Page 9 · Location 198
It sounded like a bad result , not a bad decision .
Highlight (yellow) – The hazards of resulting > Page 10 · Location 208
In the exercise I do of identifying your best and worst decisions , I never seem to come across anyone who identifies a bad decision where they got lucky with the result , or a well – reasoned decision that didn’t pan out .
Highlight (yellow) – Quick or dead: our brains weren’t built for rationality > Page 12 · Location 231
When we work backward from results to figure out why those things happened , we are susceptible to a variety of cognitive traps , like assuming causation when there is only a correlation , or cherry – picking data to confirm the narrative we prefer . We will pound a lot of square pegs into round holes to maintain the illusion of a tight relationship between our outcomes and our decisions .
Highlight (yellow) – Dr. Strangelove > Page 19 · Location 320
Theory of Games and Economic Behavior in 1944 .
Highlight (yellow) – Dr. Strangelove > Page 20 · Location 333
And the important thing for this book is that John von Neumann modeled game theory on a stripped – down version of poker .
Highlight (yellow) – Poker vs. chess > Page 21 · Location 343
Trouble follows when we treat life decisions as if they were chess decisions .
Highlight (yellow) – “I’m not sure”: using uncertainty to our advantage > Page 27 · Location 434
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 . ”
Highlight (yellow) – Redefining wrong > Page 33 · Location 516
“ Those people haven’t gotten all their chips in a pot with a pair against a straight draw and lost . ” Or , more likely , they’ve had those things happen throughout their lives and didn’t realize that’s what 30 % or 40 % feels like .
Highlight (yellow) – Redefining wrong > Page 35 · Location 544
If we aren’t wrong just because things didn’t work out , then we aren’t right just because things turned out well .
Highlight (yellow) – Redefining wrong > Page 36 · Location 558
that losses in general feel about two times as bad as wins feel good . So winning $ 100 at blackjack feels as good to us as losing $ 50 feels bad to us .
CHAPTER 2: Wanna Bet?
Highlight (yellow) – Hearing is believing > Page 50 · Location 753
People are credulous creatures who find it very easy to believe
Highlight (yellow) – Hearing is believing > Page 51 · Location 754
and very difficult to doubt . In fact , believing is so easy , and perhaps so inevitable , that it may be more like involuntary comprehension than it is like rational assessment . ”
Highlight (yellow) – Hearing is believing > Page 51 · Location 756
Two years later , Gilbert and colleagues demonstrated through a series of experiments that our default is to believe that what we hear and read is true . Even when that information is clearly presented as being false , we are still likely to process it as true .
Highlight (yellow) – Being smart makes it worse > Page 62 · Location 908
Surprisingly , being smart can actually make bias worse .
Highlight (yellow) – Being smart makes it worse > Page 64 · Location 936
Just as we can’t unsee an illusion , intellect or willpower alone can’t make us resist motivated reasoning .
Highlight (yellow) – Wanna bet? > Page 65 · Location 945
When someone challenges us to bet on a belief , signaling their confidence that our belief is inaccurate in some way , ideally it triggers us to vet the belief , taking an inventory of the evidence that informed us .
Highlight (yellow) – Wanna bet? > Page 66 · Location 959
Only sometimes , later , if we have the time or the inclination , we think about it and vet it , determining whether or not it is true . “ Wanna bet ? ” triggers us to engage in that third step that we only sometimes get to .
Highlight (yellow) – Wanna bet? > Page 66 · Location 970
The more we recognize that we are betting on our beliefs ( with our happiness , attention , health , money , time , or some other limited resource ) , the more we are likely to temper our statements , getting closer to the truth
Highlight (yellow) – Redefining confidence > Page 67 · Location 980
The Half – Life of Facts
Highlight (yellow) – Redefining confidence > Page 72 · Location 1045
Confidence in the results is expressed through both p – values , the probability one would expect to get the result that was actually observed ( akin to declaring your confidence on a scale of zero to ten ) , and confidence intervals ( akin to declaring ranges of plausible alternatives ) .
CHAPTER 3: Bet to Learn: Fielding the Unfolding Future
Highlight (yellow) – Working backward is hard: the SnackWell’s Phenomenon > Page 87 · Location 1221
We might imagine the rats thinking , “ I bet the next lever press will get me a pellet . . . . I’ve just been getting unlucky . . . I’m due . ”
Highlight (yellow) – “If it weren’t for luck, I’d win every one” > Page 89 · Location 1240
we take credit for the good stuff and blame the bad stuff on luck so it won’t be our fault .
Highlight (yellow) – “If it weren’t for luck, I’d win every one” > Page 89 · Location 1241
“ Self – serving bias ”
Highlight (yellow) – People watching > Page 97 · Location 1344
Where we blame our own bad outcomes on bad luck , when it comes to our peers , bad outcomes are clearly their fault . While our own good outcomes are due to our awesome decision – making , when it comes to other people , good outcomes
Highlight (yellow) – Other people’s outcomes reflect on us > Page 104 · Location 1435
Daniel Gilbert’s Stumbling on Happiness , and Jonathan Haidt’s The Happiness Hypothesis ,
Highlight (yellow) – Reshaping habit > Page 107 · Location 1466
“ To change a habit , you must keep the old cue , and deliver the old reward , but insert a new routine . ”
Highlight (yellow) – Reshaping habit > Page 107 · Location 1473
Our brain is built to seek positive self – image updates . It is also built to view ourselves in competition with our peers .
Highlight (yellow) – “Wanna bet?” redux > Page 112 · Location 1542
With enough practice , reinforced by the reward of feeling good about ourselves , thinking of fielding outcomes as bets will become a habit of mind .
CHAPTER 4: The Buddy System
Highlight (yellow) – Not all groups are created equal > Page 129 · Location 1741
most likely to be activated when decision makers learn prior to forming any opinions that they will be accountable to an audience ( a ) whose views are unknown , ( b ) who is interested in accuracy , ( c ) who is reasonably well – informed , and ( d ) who has a legitimate reason for inquiring into the reasons behind participants ’ judgments / choices . ”
Highlight (yellow) – Not all groups are created equal > Page 129 · Location 1744
groups can improve the thinking of individual decision – makers when the individuals are accountable to a group whose interest is in accuracy .
Highlight (yellow) – The group rewards focus on accuracy > Page 132 · Location 1786
productive decision group can harness this desire by rewarding accuracy and intellectual honesty with social approval
Highlight (yellow) – The group rewards focus on accuracy > Page 132 · Location 1787
Motivated reasoning and self – serving bias are two habits of mind that are deeply rooted in how our brains work .
Highlight (yellow) – The group rewards focus on accuracy > Page 134 · Location 1808
Identifying mistakes in hands I won reinforced the separation between outcomes and decision quality .
Highlight (yellow) – Wanna bet (on science)? > Page 150 · Location 2031
People are more willing to offer their opinion when the goal is to win a bet rather than get along with people in a room .
CHAPTER 5: Dissent to Win
Highlight (yellow) – CUDOS to a magician > Page 153 · Location 2047
Robert Merton’s ideal – type model of a self – correcting epistemic community , one organized around the norms of CUDOS . ” Per the BBS paper , CUDOS stands for Communism ( data belong to the group ) ,
Highlight (yellow) – CUDOS to a magician > Page 154 · Location 2050
Universalism ( apply uniform standards to claims and evidence , regardless of where they came from ) , Disinterestedness ( vigilance against potential conflicts that can influence the group’s evaluation ) , and Organized Skepticism ( discussion among the group to encourage engagement and dissent ) .
Highlight (yellow) – Disinterestedness: we all have a conflict of interest, and it’s contagious > Page 167 · Location 2235
“ Wait ! How did the hand turn out ? ” I gave them the red pill : “ It doesn’t matter . ”
Highlight (yellow) – Disinterestedness: we all have a conflict of interest, and it’s contagious > Page 167 · Location 2237
Anyone can provide the narrative only up to the point of the decision under consideration , leaving off the outcome so as not to infect their listeners with bias .
Highlight (yellow) – Organized skepticism: real skeptics make arguments and friends > Page 169 · Location 2261
Thinking in bets embodies skepticism by encouraging us to examine what we do and don’t know and what our level of confidence is in our beliefs and predictions . This moves us closer to what is objectively true .
Highlight (yellow) – Organized skepticism: real skeptics make arguments and friends > Page 170 · Location 2278
can create a pod whose job ( literally , in business , or figuratively , in our personal life ) is to present the other side , to argue why a strategy might be ill – advised , why a prediction might be off , or why an idea might be ill informed . In so doing , the red team naturally raises alternate hypotheses .
Highlight (yellow) – Communicating with the world beyond our group > Page 173 · Location 2307
When we lead with assent , our listeners will be more open to any dissent that might follow . In addition , when the new information is presented as supplementing rather than negating
CHAPTER 6: Adventures in Mental Time Travel
Highlight (yellow) – Night Jerry > Page 181 · Location 2409
This tendency we all have to favor our present – self at the expense of our future – self is called temporal discounting
Highlight (yellow) – Moving regret in front of our decisions > Page 187 · Location 2474
But if regret occurred before a decision instead of after , the experience of regret might get us to change a choice likely to result in a bad outcome
Highlight (yellow) – Moving regret in front of our decisions > Page 187 · Location 2485
One of our time – travel goals is to create moments like that , where we can interrupt an in – the – moment decision and take some time to consider the decision from the perspective of our past and future .
Highlight (yellow) – Moving regret in front of our decisions > Page 188 · Location 2492
[ W ] hat are the consequences of each of my options in ten minutes ? In ten months ? In ten years ? ”
Highlight (yellow) – A flat tire, the ticker, and a zoom lens > Page 193 · Location 2544
Our problem is that we’re ticker watchers of our own lives .
Highlight (yellow) – A flat tire, the ticker, and a zoom lens > Page 193 · Location 2546
We would be better off thinking about our happiness as a long – term stock holding .
Highlight (yellow) – “Yeah, but what have you done for me lately?” > Page 195 · Location 2572
The way we field outcomes is path dependent .
Highlight (yellow) – Ulysses contracts: time traveling to precommit > Page 200 · Location 2639
The plan worked perfectly . This action — past – us preventing present – us from doing something stupid — has become known as a Ulysses contract . ( Most translations of Homer use the hero’s ancient Greek name , Odysseus
Highlight (yellow) – Backcasting: working backward from a positive future > Page 220 · Location 2894
The most common form of working backward from our goal to map out the future is known as backcasting . In backcasting , we imagine we’ve already achieved a positive outcome , holding up a newspaper with the headline “ We Achieved Our Goal ! ” Then we think about how we got there .
Highlight (yellow) – Backcasting: working backward from a positive future > Page 221 · Location 2909
Imagining a successful future and backcasting from there is a useful time – travel exercise for identifying necessary steps for reaching our goals .
Highlight (yellow) – Premortems: working backward from a negative future > Page 221 · Location 2913
A premortem is an investigation into something awful , but before it happens .
Highlight (yellow) – Premortems: working backward from a negative future > Page 222 · Location 2917
Backcasting and premortems complement each other . Backcasting imagines a positive future ; a premortem imagines a negative future .
Highlight (yellow) – Premortems: working backward from a negative future > Page 223 · Location 2933
consistently finding that people who imagine obstacles in the way of reaching their goals are more likely to achieve success , a process she has called “ mental contrasting . ”
Highlight (yellow) – Premortems: working backward from a negative future > Page 224 · Location 2943
Oettingen recognized that we need to have positive goals , but we are more likely to execute on those goals if we think about the negative futures .