Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

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Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts Audible Audiobook – Unabridged

Annie Duke (Author, Narrator), Penguin Audio (Publisher)

4,269

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Wall Street Journal bestseller!

Poker champion turned business consultant Annie Duke teaches you how to get comfortable with uncertainty and make better decisions as a result.

In Super Bowl XLIX, Seahawks coach Pete Carroll made one of the most controversial calls in football history: With 26 seconds remaining, and trailing by four at the Patriots' one-yard line, he called for a pass instead of a handing off to his star running back. The pass was intercepted, and the Seahawks lost. Critics called it the dumbest play in history. But was the call really that bad? Or did Carroll actually make a great move that was ruined by bad luck?

Even the best decision doesn't yield the best outcome every time. There's always an element of luck that you can't control, and there is always information that is hidden from view. So the key to long-term success (and avoiding worrying yourself to death) is to think in bets: How sure am I? What are the possible ways things could turn out? What decision has the highest odds of success? Did I land in the unlucky 10% on the strategy that works 90% of the time? Or is my success attributable to dumb luck rather than great decision making?

Annie Duke, a former World Series of Poker champion turned business consultant, draws on examples from business, sports, politics, and (of course) poker to share tools anyone can use to embrace uncertainty and make better decisions. For most people, it's difficult to say "I'm not sure" in a world that values, and even rewards, the appearance of certainty. But professional poker players are comfortable with the fact that great decisions don't always lead to great outcomes and bad decisions don't always lead to bad outcomes.

By shifting your thinking from a need for certainty to a goal of accurately assessing what you know and what you don't, you'll be less vulnerable to reactive emotions, knee-jerk biases, and destructive habits in your decision making. You'll become more confident, calm, compassionate, and successful in the long run.

Includes a bonus PDF of charts and graphs.

PLEASE NOTE: When you purchase this title, the accompanying PDF will be available in your Audible Library along with the audio.

Listening Length

6 hours and 50 minutes
Author

Annie Duke
Narrator

Annie Duke
Audible release date

February 6, 2018
Language

English
Publisher

Penguin Audio
ASIN

B078SBSBW3
Version

Unabridged
Program Type

Audiobook
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Product details

Listening Length	6 hours and 50 minutes
Author	Annie Duke
Narrator	Annie Duke
Whispersync for Voice	Ready
Audible.com Release Date	February 06, 2018
Publisher	Penguin Audio
Program Type	Audiobook
Version	Unabridged
Language	English
ASIN	B078SBSBW3
Best Sellers Rank	#1,341 in Audible Books & Originals (See Top 100 in Audible Books & Originals) #5 in Strategic Business Planning #8 in Medical Cognitive Psychology #9 in Business Decision Making & Problem Solving

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4.3 out of 5

4,269 global ratings

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Decision Making For Everyone's Long Run Betterment

Reviewed in the United States on June 29, 2020

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This book is about how to make better decisions, from the trivial to the most consequential,
in all endeavors of life: personal, business, political/economic forecasting, gambling, etc.
It explains how to think about potential decision options, given that most entail varying
degrees of risky or uncertain outcomes. Without attempting to bog the reader down in
the mathematics of probability theory, the core of most textbook approaches
to decision making, it clearly demonstrates how to incorporate probabilistic
uncertainty into our decision-making thought processes. Since most decisions
we make lead to outcomes which have an element of probabilistic uncertainty,
the book's approach is relevant to all walks of life.
Although Duke does not frame it this way, I think a brief explanation
of two fundamentally different types of situations captured by the tool of
probabilistic reasoning may be helpful. This dichotomy leads to what have
been termed Objective and Subjective probabilities.
Objective probabilities are those associated with outcomes that are truly random
with specific known numerical probabilities governing various occurrences.
For these, no amount of thinking or information on the part of those of us observing
the situation can improve on understanding inherent randomness of the underlying
activity leading to some outcome, i.e., the known probabilities are the best we can
do in anticipating the ultimate outcome of the event. In other words, we can't improve
on the odds of various outcomes however smart we may be. The best examples for
this type of probability are things happening in the world of quantum mechanics,
e.g., predicting the time at which a radioactive element or a neutron will decay.
A close second for most practical purposes would be the outcome of the spin of a
roulette wheel or the outcome of a fair roll of a pair of dice. Objective probabilities are set by
the laws of nature, and, once known, the actual outcomes of a large number of repetitive
observations of the same situation will lead to a predictable distribution of outcomes.
Subjective probabilities, on the other hand, are probabilities we assign to various
outcomes when faced with decisions leading to uncertain outcomes. They are not
fixed or absolute numbers driven by the laws of nature. We may assign
a numerical value to a particular outcome, e.g., a 70% chance the Patriots will win
the Super Bowl against the Eagles, or, they may be qualitative rankings of possible
outcomes, e.g., highly likely, pretty likely, not sure, very unlikely, etc. Three key things
about Subjective probabilities are:
1. Different people thinking about the same event will usually have different
estimates of the probabilistic outcomes. Subjective probabilities are not facts.
They are opinions.
2. The information/knowledge the decision maker has about the situation will
affect their probability estimates of different outcomes.
3. Good decision makers in many particular endeavors like poker or investing will usually,
i.e., more frequently but not always, have better success in predicting uncertain outcomes
than will poor decision makers.
During the first couple of hundred years that mathematicians tried to develop the
field of probability, they were generally focused on thinking about things they believed
were governed by Objective probabilities. Even the game of poker was thought of in this
way for years. Early in the 20th century, thinkers began to crystallize the idea of Subjective
probabilities as distinctly different from Objective probabilities. John Maynard Keynes
attempted to develop a full blown theory with his 1921 book "A Treatise On Probability".
Although it had some excellent ideas, it did not succeed in laying out a firm mathematical basis
for Subjective probability. This took the Italian mathematician, Bruno de Finetti, to define
a mathematically rigorous treatment of Subjective probability in his 1937 book. And,
thinking in bets was core to his approach.
By the 1950's, de Finetti's approach became the basis for aspects of economics , game theory,
and decision making under uncertainty. The latter pertains to virtually all decision making we
encounter in daily life.
So, what does Subjective probability have to do with bets. In short, everything. When we make a bet, we do so with a view of the chances of winning, either a qualitative view, or a quantitative view, i.e., a probability. A bet is the manifestation of one's personal estimate of the Subjective probability of the outcome you are favoring.
The beauty of Duke's book is that it explains with lots of examples of how to apply
Subjective probabilistic thinking in all sorts of situations without having to worry about
the sound basis of the underlying mathematics. Poker is a great example of a situation in which a
Subjective probabilistic assessment is critical, since trying to gauge how others will behave in playing a hand is truly a subjective, rather than objective, assessment. Thus her poker and human psychology background really do mark her as expert in teaching smart decision making for a broad audience. Since information and knowledge are key to making sound estimates of Subjective probabilities, Duke spends a lot of time on how to build a broad information base pertaining to prospective decisions, and how to guard against biases we naturally have that can cause us to resist relevant information that may rub us wrong. She implies that for lots of decisions, one can do better simply by stepping back and thinking about the pro's and con's, rather than just going on an impulse. Oftentimes we have relevant information in our head, if only we would think about it. Get external inputs as well, e.g., friends or Google. Information is key and being open to inputs that may conflict with your beliefs will improve your decision quality in the long run.
Thus,the book is suitable for both the mathematically inclined and the mathematically averse. Although the math is absent, some may find some of the concepts a bit difficult or, on the surface, repetitive, as evidenced by some of the reviews posted here on Amazon. Stated differently, it may be difficult sometimes to appreciate the applicability of the advice to settings that go beyond the specific example used preceding her current point, but a little thought brings it home. No doubt, a few readers of the book will 'get it' and some won't, though they may still find some of the stories entertaining. None-the-less, I highly recommend it as worthwhile for both personal improvement, as well as supplemental reading in almost any graduate school curriculum.

32 people found this helpful

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Cliente de Kindle

Good read

Reviewed in the United States on February 9, 2024

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This book points out a set of interesting elements that we need to keep in mind when making decisions. It provides us with aspects so that we can better calibrate our beliefs toward future.

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Arthur Reber

you know ones like you and me who make decisions all the time

Reviewed in the United States on April 4, 2018

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About a quarter of the way into this latest missive from Annie Duke I found myself wondering if she's writing for the business community but in a way that regular folks, you know ones like you and me who make decisions all the time, would get something out of or written for us but in a way that those in the corporate world would be well-advised to read. At about the one-third mark I realized (duh) that it's both and it's written with such charm and insightfulness (and humor) that it succeeds splendidly on both agendas.
Duke is a rare trifecta: she has a solid academic background in cognitive psychology, she was a world-class professional poker player, and is currently a corporate and business consultant. All three of these "Dukes" are poured into the book in compelling and unique ways. I'm a cognitive psychologist and have played a lot of poker (not in her league I can assure you) and so I'm intrigued by the way she lays out the lessons we need to learn.
First: in science, poker, and business you rarely, if ever, have all the information. In poker you don't know your opponents cards and you don't know what they're thinking -- including what they're thinking about what they think you're thinking. In scientific research you only know what's been discovered so far. You're ignorant about the unknown and are trying to extrapolate from current knowledge. In business and finance you unsure of the future, only know some things about markets, and work with incomplete models. In these partial information settings decision-making becomes difficult, tricky, and often contaminated by bias.
Second: virtually all the interesting things we do in life are bets. Every even mildly complex task we confront or decision we make is, in effect, a bet. And bets have consequences. We take an umbrella because we're betting it will rain. We hire a new manager and are betting on her skills. We chose college A over B and bet that we'll get better education. And in these and the myriad other bets we make every day, we don't have all the facts and, because of the ways in which our minds tend to work, we often run afoul of biases and misunderstandings that lead us to make poor decisions.
And Duke lays out for us the roots of these biases and trenchant advice on how to circumvent them -- with sometimes jarring effectiveness designed to force the reader to suddenly confront what they think they know but don't. Some examples: a) Try asking someone "want to bet?" when they claim something to be true. It puts them in a totally different place than when they were simply stating what they believed to be true. b) Look at decisions on the basis of how they were made rather than how they turned out -- you can win with a poor decision and lose with a good one but in the long run, it's the decision-making process that counts. c) Emphasize the need to stop thinking in certainties and recognize probabilities. d) Stop imagining situations as either-or and acknowledge that most things lie along continuums. e) Recognize when you're in an "echo-chamber" where only viewpoints you're currently comfortable with are expressed. Quoting Mill, she reminds us that truth only emerges when all sides are heard.
Along the way we're treated to stories of gamblers, pain and triumph in poker games, the noodling of philosophers, judicial habits of Supreme Court Justices, corporate CEO's, betting markets, biases of social psychologists, a short but penetrating exegesis on skepticism, some advice on child rearing, and a discourse on mental time travel -- and no, I'm not going to tell you what that is. Read the damn book.
Duke makes her living now as a writer and presenter of her approach to decision-making, a corporate speaker, and a business consultant. I can just imagine jaws dropping when she tells a group of high powered corporate execs that one sure way to succeed is to make sure they have naysayers in corporate headquarters, ensure that they ask for dissenting views and voices before making major (or minor) decisions.
Oh, and in passing, she's an engaging writer with a sense of humor who can turn a simple setting into a hilarious little psychodrama, especially when revealing some of the weird and wonderful things that happened to her during her days as a professional poker player.

81 people found this helpful

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Chris Morris

Good ideas but this could have been a 50 page book

Reviewed in the United States on December 1, 2023

Verified Purchase

This book contains several important ideas with excellent examples, but it is rich with filler. Just one example, there's four pages giving background of some MTV reality TV drama.

Buy the book to support the author but then find a synopsis or watch a TedTalk. You won't be missing anything other than a detailed walk through professional poker personalities.

9 people found this helpful

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J.Edgar

Whatever you do read this

Reviewed in the United States on January 26, 2024

Verified Purchase

Lots of good reviews so not much to add other than her writing is clear, concise and to the point; almost like a good fiction writer who you believe is talking directly to you and no one else. Her references alone are worth the price of admission and the book its a wake up call for those with former prejudices
that need to be blown up.

3 people found this helpful

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Kevin H

not bad. a bit repetitive

Reviewed in the United States on March 22, 2024

Verified Purchase

An interesting book. Don't think it made too many revelations although it was an interesting concept on her look forward (optimistic) and look backwards (pessimistic) philosophy to understand the best path. It basically recommends risk analysis based on all outcomes possible.

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Lisa Peterson

A new way of thinking

Reviewed in the United States on March 16, 2024

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As a poker player myself, I found this book eye opening, to biases, mistakes, outcome orientation and not focusing enough on decision making process.
I really enjoyed the status and examples.

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Daisy

A book everyone should read

Reviewed in the United States on March 19, 2024

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This book has helped me in poker, in the work place, and just with understanding probability. Highly recommend.

One person found this helpful

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Jorge Fortes

Magnificent

Reviewed in Mexico on November 7, 2023

Verified Purchase

Must read, enlightening and very enjoying piece of art.

Bet on this book, there is no chance to lose.. well you just might lose some wrong, bad and outdated ideas you may have about risk, betting and desiton making.

DIETMAR HEINZ BUETO

Fast delivery

Reviewed in Germany on February 27, 2024

Verified Purchase

Better decision making processes well explained.

Guillaume R

One of the best on trading psychology out there

Reviewed in the United Kingdom on January 1, 2024

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Yes you read that right the author is a pro poker player. However in every single sentences the word power is mentioned you could easily replace it with trading. The similarities are striking. The mental model provided and insight is very useful for traders. You can have ‘one good trade’ with perfect execution and still get a bad outcome. It doesn’t mean that the trade was bad. 10/10

Cliente Amazon

Interessante

Reviewed in Italy on September 29, 2023

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Concetti e consigli pratici per essere più obbiettivi ed efficaci nel prendere una decisione, a volte un pò ripetitivo ma comunque un libro interessante da leggere.

One person found this helpful

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Willy B.

perfect

Reviewed in France on September 12, 2022

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Offert pour un membre de ma famille qui parle la langue de Shakespeare et qui saura me donner son retour ;-)

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