Thinking In Bets Notes & Summary Thinking in Bets: Making Smarter Decisions When You ...

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For anyone interested in psychology. Duke’s academic plus poker background make this at a fascinating perspective. Lots of “a-ha” moments.

  • Quality of our lives = the quality of our decisions + luck.
  • Many people believe Pete Carroll got it wrong because the play he called didn’t work.
  • No one wakes up in the morning and says, “I want to be close-minded and dismissive of others.” Most of what we do daily is automatic processing. We rarely examine our habits and defaults
  • “Thoroughly conscious ignorance is the prelude to every real advance in science.” It is the prelude to every great decision that has ever been made too.
  • Losses feel two times as bad as wins feel good
  • In most decisions, we are not betting against others. We are actually betting against all the future versions of ourselves that we are not choosing.
  • How we think about abstract beliefs:
    • (1) We hear something, (2) We think about it and vet it, determining whether it is true or false, then we (3) form our belief
  • How we actually form abstract beliefs:
    • (1) We hear something, (2) We believe it to be true, (3) Only sometimes, later, if we have the time or inclination, we think about it and vet it, determining whether it was true or false
  • Our preexisting beliefs influence the way we experience the world (football games, protest)
  • Fake news works because people who already hold beliefs consistent won’t question the evidence
  • We want to think well of ourselves and feel the narrative of our life story is a positive one. Being wrong doesn’t fit into that narrative.
  • Being smart can make your bias worse
    • I.e. the better you are with numbers, the better you are at spinning those numbers to conform to and support your beliefs
  • There is always a degree of uncertainty. Practically nothing is black and white (0% or 100%).
  • Self-serving bias: we take credit for the good stuff and blame the bad stuff on luck
  • In single vehicle accidents, 37% of drivers still found a way to blame someone else
  • What accounts for most of the variance in happiness is how we’re doing comparatively.
  • To change a habit, you must keep the old cue and deliver the old reward, but insert a new routine.
  • If a ship is going from New York to London and the ship’s navigator introduces a one-degree navigation error, it would start off as barely noticeable. But unchecked, it would miss London by miles because the one-degree miscalculation compounds mile after mile
  • In the long run, the more objective person will beat the more biased person.
  • Don’t ignore an idea because you don’t like who or where it came from (don’t let the messenger dictate your opinion of the message).
  • Two people whose positions on an issue are far apart will move toward the middle after a debate or skilled explanation of the opposing position.
  • John Stuart Mill’s → Open-mindedness is the only way to learn.
  • Ask friends/family, what might I be missing about this? Look for a devil’s advocate (dad, Compound Writing)
  • “And” is an offer to contribute. “But” is a denial and repudiation of what came before.
  • Good results and processes compound.
  • Temporal discounting: our tendency we have to favor our present-self at the expense of our future-self (we are willing to take an irrationally large discount to get a reward now instead of waiting for a bigger reward later)
    • Lottery winners
  • 10-10-10 – Suzy Welch
    • What are the consequences of each of my options in ten minutes? In ten months? In ten years?
  • Bad outcomes can have an impact on your emotions going forward which can lead to more bad outcomes (called tilt in poker)
    • Importance of controlling your emotions
  • Examples of warning signs to cause you interrupt your thought pattern
    • Illusions of certainty (“I know,” “I’m sure,” “I knew it,” “0%” or “100%” and absolutes)
    • Irrational outcome fielding (“I can’t believe how unlucky I got,” “I planned it perfectly,”
    • Generalized characterizations of people (“typical idiot”)
    • Sweeping generalizations of types of people (“East Coast,” “California values”)
    • Characterizing something as “wrong”
    • Lack of compassion
  • Belief leads to a bet which leads to a set of outcomes
  • Negative visualization – those who imagine obstacles in their way are more likely to achieve success
  • Once something occurs, we no longer think of it as probabilistic (or ever having been probabilistic)

Further Readings

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