how to decide, by annie duke

Having read Annie Duke’s first book Thinking in Bets, I found How to Decide to be a nice refresher, but also a little repetitive. I think my summary of Thinking in Bets covers the most important topics, so this synopsis will be short and bulleted.

• Resulting is when we use the outcome of a decision to determine if the decision itself was good or not
• Luck exerts its influence on virtually all decisions
• Resulting can make us lack compassion for ourselves and others, primarily because we blame bad outcomes on poor decisions
• Hindsight bias is the tendency to believe that an event was predictable or inevitable, after it has occurred
• The paradox of experience → experience is necessary for learning, but individual experiences often interfere with learning because we place too much emphasis on them
• A few steps to better decision making:
  • Identify the reasonable set of outcomes
  • Identify your preference using the payoff for each outcome (payoff size matters)
  • Estimate the likelihood of each outcome unfolding (as a %)
  • Assess the relative likelihood of outcomes you like and dislike
  • Compare options
• Smart people tend to be better at motivated reasoning. This leads to them reasoning about information to confirm prior beliefs and arrive at a desired conclusion
• The Happiness Test → ask yourself if the outcome of a decision will impact your happiness in a month, a year, or a week. The shorter time period for which it might have an impact, the less important it is
• Quit-to-itiveness → the lower the cost to quit, the faster you can go because it’s easier to unwind the decision and choose a different option (including options you may have rejected in the past)
• Decision Stacking → this is when you find ways to make low importance, easy to quit decisions in advance of a high impact, harder to quit decision

• Mental Contrasting → this is when you imagine what you want to accomplish and confront the obstacles that might stand in the way of accomplishing it
• Pre-mortem → imagining yourself at some time in the future having failed to achieve a goal, and looking back at how you arrived at that destination
• Beliefs are contagious. Elicit feedback prior to sharing your opinions, so as to not bias the opinions you receive​