Capital Allocators – Inside the Institutional Investment Industry Annie Duke – The Power of Quitting (Capital Allocators, EP.273)
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Oct 3, 2022 
Annie Duke, a former professional poker player and best-selling author, discusses her latest book, 'Quit: The Power of Knowing When to Walk Away.' She argues that quitting should be viewed as a strategic skill rather than a failure, challenging the relentless pursuit of grit. Duke shares insights on cognitive biases that hinder our quitting decisions and provides compelling anecdotes, including lessons from Mount Everest and the fall of Sears. Listeners learn how to better evaluate their commitments and improve decision-making through effective quitting strategies.
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Everest Turnaround Time
- Three climbers on Everest in 1996, Hutchinson, Tasky, and Kosicki, adhered to their 1 PM turnaround time despite others continuing.
- They survived, while several others, including their expedition leader who downplayed the remaining climb time, perished.
Quitting Under Uncertainty
- Quitting, like starting, happens under uncertainty, requiring forecasts about the future.
- The optimal time to quit often feels too early because it requires anticipating future negative consequences before they fully manifest.
Obstacles to Quitting
- Cognitive biases make quitting hard: sure-loss aversion, escalation of commitment, sunk cost fallacy, endowment effect, and identity.
- These biases cause us to overvalue what we have and avoid realizing losses, leading to sticking with failing endeavors for too long.
