(2018-03-04) Fishbein Decision Making Under Uncertainty - 16 Lessons I Learned From Annie Duke

Mike Fishbein: Decision Making Under Uncertainty: 16 Lessons I Learned From Annie Duke. Annie first mastered decision making in the field of poker.

It turns out, her approach to making decisions at the poker table translates into making decisions in business and life.

in most aspects of life, you don’t have all the information you need to make a decision and it’s impossible to predict the future with perfect accuracy.

“there are exactly two things that determine how our lives turn out: the quality of our decisions and luck.”

1. The relationship between decision quality and outcome is loose

You can make the right decision given the information you have and still not achieve the desired result. And you can make a poor decision and get lucky.

2. Decisions are bets

I learned a lot about decision making under uncertainty from Annie Duke’s new book, Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts.

3. “Our bets are only as good as our beliefs”

We make decisions based on the information that we have and the beliefs that we develop as a result of that information

4. Our beliefs aren’t always accurate

These inaccurate thinking patterns happen because of a number of cognitive biases that Annie touches on in the book.

5. Our brains aren’t great at interpreting reality

cognitive biases

6. Thinking in bets can improve your decision making

We can get better at separating outcome quality from decision quality, discover the power of saying, ‘I’m not sure,’ learn strategies to map out the future, become less reactive decision-makers, build and sustain pods of fellow truth-seekers to improve our decision process, and recruit our past and future selves to make fewer emotional decisions.”

It forces you to ask questions such as “Why might my belief not be true?”, “What other evidence might be out there bearing on my belief?”, and “What are the reasons someone else could have a different belief, what’s their support, and why might they be right instead of me?”

7. We almost never have all the facts we need

easily fit John von Neumann’s definition of ‘real games.’

8. Use uncertainty to your advantage

9. Measure your confidence

10. Bet on the probability of different futures

“Incorporating percentages or ranges of alternatives into the expression of our beliefs means that our personal narrative no longer hinges on whether we were wrong or right but on how well we incorporate new information to adjust the estimate of how accurate our beliefs are.”

11. Don’t equate the quality of a decision with the quality of its outcome

12. Don’t succumb to hindsight bias

tendency, after an outcome is known, to see the outcome as having been inevitable

13. Get feedback and update your beliefs

Annie recommends building a community or mastermind group to analyze decisions you have made or need to make.

14. Analyze decisions before the outcome is known

15. Time travel

“Bringing our future-self into the decision gets us started thinking about the future consequences of those in-the-moment decisions,”

16. Work backwards from the outcome

Imagining success can help you see all the things that you need to go right for your decision to work out. Imagining failure can also be helpful. It forces you to think about potential causes of failure and then find ways to solve for them.