This is my summary of the key ideas of Thinking in Bets written by Annie Duke.
One of the key insight of this book that resonated with me is being able to think and communicate probabilistically. In most cases, we don’t know something for a fact but somehow we communicate as if we do.
A feedback I recently gave to someone:
Going from “That doesn’t make sense” (or its other variants) to “I think that doesn’t make sense [because …]” (or its other variants) has a few advantages:
- It’s a better model of your knowledge. There are uncertainties, things you don’t know, and variables you are not considering (see Chesterton's fence).
- It invites a conversation that seeks an objective truth. The former statement is more likely to put the other person on the defensive or have them abandon the alternative no matter the merit (because some people don’t want to say you are wrong especially when you are a senior). Expressing uncertainty upfront removes the right vs wrong dichotomy.
skill(decision quality) and
quality of a decisionwith the
quality of its outcome.
We are uncomfortable with the idea that luck plays a significant role in our lives. We recognize the existence of luck, but we resist the idea that, despite our best efforts, things might not work out the way we want. It feels better for us to imagine the world as an orderly place, where randomness does not wreak havoc and things are perfectly predictable. We evolved to see the world that way. Creating order out of chaos has been necessary for our survival.
Game theory is the study of mathematical models of conflict and cooperation between intelligent rational decision-makers. — Roger Myerson
Chess is not a game. Chess is a well-defined form of computation. You may not be able to work out the answers, but in theory, there must be a solution, a right procedure in any position. Now, real games are not like that at all. Real life is not like that. Real life consists of bluffing, of little tactics of deception, of asking yourself what is the other man going to think I mean to do. And that is what games are about in my theory.
You could make the best possible decision at every point and still lose the hand because you don't know what new cards will be dealt and revealed.
"Thoroughly conscious ignorance is the prelude to every real advance in science. — James Clerk Maxwell
Once we start doing that, we are more likely to recognize that there is always a degree of uncertainty, that we are generally less sure than we thought we were, and that practically nothing is black and white (0% or 100%).
Statements of science are not of what is true and what is not true, but statements of what is known to different degrees of certainty[…] Every one of the concepts of science is on a scale graduated somewhere between, but at neither end of, absolute falsity or absolute truth. — Richard Feynman
To change a habit, you must keep the old cue, and deliver the old reward but insert a new routine.
When faced with highly uncertain conditions, military units and major corporations sometimes use an exercise called scenario planning. The idea is to consider a broad range of possibilities for how the future might unfold to help guide long-term planning and preparation. — Nate Silver
Once something occurs, we no longer think of it as probabilistic — or as ever having been probabilistic. This is how we get into the frame of mind where we say, "I should have known" or "I told you so." This is where unproductive regret comes from.