Annie Duke | Making a Sure Bet: Optionality, Decision Making, and How to Embrace Uncertainty

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Jun 18, 2018

Annie Duke, expert in decision making and uncertainty, discusses how to make smart decisions and embrace uncertainty. She emphasizes the importance of assessing what you know and don't know, and addresses the loose relationship between outcomes and decision quality. Duke explores wicked environments, self-serving bias, illusion of control, and the impact of intelligence on decision making. She also emphasizes the dangers of being complacent and close-minded, and highlights the need to embrace uncertainty in order to make better decisions.

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INSIGHT

Outcome vs. Decision Quality

Outcomes don't always reflect decision quality; good decisions can have bad outcomes, and vice versa.
Poker teaches this because winning with bad cards/plays or losing with good ones is possible.

ANECDOTE

Red Light Example

Annie Duke illustrates the disconnect between outcome and decision quality by mentioning running red lights.
Despite never getting a ticket, she acknowledges it's a bad decision, showcasing how outcomes can be misleading.

INSIGHT

Poker vs. Chess in Decision Making

Decisions in life resemble poker more than chess; outcomes are loosely correlated in the short term but reveal skill over time.
This contrasts with chess, where outcomes directly reflect decision quality due to minimal luck.

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In Episode 48 of Hidden Forces, Demetri Kofinas speaks with Annie Duke and about how we can make smart decisions and ensure our long-term success.

We make millions of decisions over the course of our lives. Most of these seem to be small and of little consequence, and so we make our choices and act with little care or thought. Other decisions require more care and consideration, as their significance will, for better or worse, have a lasting impact on our life: What job offer to accept, what life partner to choose, how to invest in retirement.

When faced with these truly important decisions, many people become crippled by their fear and doubt. What if it’s a bad prediction? What if I am missing information, and so my choice is wrong? Often, such fears have a cascade effect, they trickle down and impact our ability to make even the smallest judgement, leaving us paralyzed.

However, there is a way to increase the likelihood that we’re making a sure bet.

According to Annie Duke, a World Series of Poker champion and the author of Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts, regardless of whether the choice is small or large, the key to solid decision-making rests in our ability to shift our thinking from a need for absolute certainty to “a goal of accurately assessing what you know and what you don't.” In other words, people need to look at every decision as though it were a bet.

Ultimately, Duke argues that by adopting this way of thinking — by assessing how sure we are of something, tracing the possible outcomes, and analyzing the odds of failure — we can ensure long-term success for ourselves, our loved ones, and our business partners.

Calling on her degrees in behavioral and cognitive psychology, and her years of experience in professional poker, throughout the episode, Duke speaks with host Demetri Kofinas about how we can eliminate fear and unproductive emotions from our decision-making processes, embrace uncertainty, and make better decisions.

Producer & Host: Demetri Kofinas

Editor & Engineer: Stylianos Nicolaou

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