thinking in bets, by annie duke

This book teaches you how to think. That’s important because put simply, two things determine how our lives turn out: luck and the quality of our decisions. If we make better quality decisions, we live better lives. And a bet is ultimately a decision about an uncertain future. So if we think in bets, we can make smarter decisions and live better lives.

The first step is to acknowledge uncertainty. This is key because it brings us closer to the objective truth. As humans, we have a tendency to equate the quality of decisions with the quality of their outcomes. This is known as resulting. If we can accept uncertainty, we can limit resulting. And this allows us to form better beliefs. This is how we think we form beliefs:

Hear It → Vet It → Form Belief

This is how we actually form beliefs:

Hear It → Believe It → Sometime later on, we might vet it and determine if it's true/false

We do this because we find it very easy to believe and very difficult to doubt. Almost everyone believes myths about who baldness is inherited from or the length of dog years. The entire education system is predicated on students believing what they are told, without actually vetting that information.

From an evolutionary standpoint, this makes sense. It was only when complex language evolved that we gained the ability to form beliefs about things we hadn't experienced. Before language, the whole "I'll believe it when I see it" adage actually applied. But language changed this and as a result, our minds did not evolve to be skeptical.

So, in order to prevent pre-existing beliefs influencing the way we experience the world, it is useful to express beliefs with a level of confidence on the belief. This shifts us away from regarding information that disagrees with us as a threat, to viewing it as an opportunity to better truth-seek.

The same thing applies to outcomes. Outcomes are driven by both luck and skill, and it is hard to know which one to attribute them to. We field outcomes in a predictably irrational manner - we take credit for the good stuff and blame the bad stuff on luck. With this mindset, we don't learn well from experiences. By betting on what we believe, we make explicit what is already implicit. This moves us away from the outcome-oriented instinct of focusing on seeking credit and avoiding blame, and brings us closer to the truth.

It's difficult to do this in practice. A group of friends, family, or colleagues all committed to truth-seeking can help. Just keep in mind that groups can either improve decision quality by exploring alternatives and recognizing biased thinking, or they can exacerbate our tendency to confirm what we already believe. If you're ever unsure if this is happening, consult Mills Bedrock Principle: We can't know the truth of a matter without hearing the other side.

Within these group settings, it helps to be a data sharer. The more details there are, the closer you move towards accuracy. It also helps to deconstruct decisions before the outcome is known. Being blind to the outcome produces higher fidelity evaluations of decision quality. And when communicating your thoughts, use and’s, not but’s. And is an offer to contribute, but is a repudiation of what came before.
​
One final take away (and one I am certainly guilty of) - don't just dream of yourself reaching your goals. Studies have shown that people who imagine obstacles in the way of reaching their goals are more likely to achieve them. The imagined obstacles will make you jump out of bed and spring into action!