Capital Allocators – Inside the Institutional Investment Industry Annie Duke – How to Decide (Capital Allocators, EP.156)
5 snips
Sep 14, 2020 
In this engaging discussion, Annie Duke, a former professional poker player turned decision-making expert, shares insights from her new book, 'How to Decide.' She outlines a six-step framework for better choices and emphasizes the crucial balance between thoroughness and timeliness. Annie explores the power of negative thinking, warning against overconfidence, and the importance of navigating group dynamics to avoid groupthink. Her practical strategies aim to enhance decision quality while recognizing the emotional challenges that often cloud judgment.
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Paradox of Experience
- Experience is necessary but insufficient for good decisions, as individual experiences can hinder learning.
- Embrace counterfactual thinking by analyzing past decisions and considering alternative outcomes.
Six-Step Decision Framework
- Use a six-step framework: identify options, possibilities, payoffs, probabilities, and compare.
- This process allows for an apples-to-apples comparison, balancing upside and downside potential.
Hidden Information Problem
- Most decisions are made with incomplete knowledge, creating uncertainty.
- Address the "hidden information" problem and avoid relying solely on gut feelings or guesses.
