BZ Book Review 05: <Thinking in Bets> by Annie Duke
Key Takeaways
1. Human minds have the tendency to mix quality of decision and outcomes. For example, when a strategic move (which is good decision) did not generate the outcome expected (such as winning the market), people think that decision is bad. However good decision can result in bad outcomes and bad decisions can somehow end up well. The results do not justify the decision is good or bad.
2. Beliefs are easy to form but hard to change. When we believe in something, we tent to re-enforce it with motivated reasoning. “Wanna bet?” is a good solution. Give a bet value on that belief will force you to seek more objective information to make sure your don’t lose that bet.
3. Self-serving bias:
To ourselves: attribute good outcome to our skills and hard work, attribute bad ones to luck
To others: attribute good outcome to their luck; attribute bad ones to decisions
To become more objective, we need to change our habit: cue-> routine-> reward (change the routine and leave the other alone) e.g. winning a bet -> good skills -> I am a great poker player; change it to winning a bet -> a mix of play hard and be able to analyze mistakes and luck -> I am a great poker player.
To become more objective and improve our decision making, it will help if we belong to certain group (objective ones and keep you on your toe).
4. Make better decisions for our future self by
Image future outcome
10-10-10 rule: if you make the decision like this, will you regret in 10 minute, 10 months, 10 years?
Start with the future that everything worked out, work backwards to find out what need to be done to achieve that results
Start with the future that everything did not work out, work backwards to find out what happened, What I missed in the process
Call To Action
Try combine positive visualization and mental contrasting to achieve positive outcomes
Positive Visualization: the scene when you achieve your goal, what is it like
Mental Contrasting: visualize all the obstacles that are trying to stop you from achieving your goal
e.g. when I become an expert in Machine Learning and AI, I will be able to do more interesting projects, take on new roles and participate in more depth discussion with my engineer friends
Watching TV-shows, getting constantly distracted, no deep work, no consistency; all those will stop you from becoming an expert or even start to learn.
