Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts
The golden rule of habit change says we don’t have to give up the reward of a positive update to our narrative, nor should we. Duhigg recognizes that respecting the habit loop means respecting the way our brain is built.
Annie Duke • Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts
Habits operate in a neurological loop consisting of three parts: the cue, the routine, and the reward. A habit could involve eating cookies: the cue might be hunger, the routine going to the pantry and grabbing a cookie, and the reward a sugar high. Or, in poker, the cue might be winning a hand, the routine taking credit for it, the reward a boost
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Classical stimulus-response experiments have shown that the introduction of uncertainty drastically slows learning.
Annie Duke • Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts
Outcomes don’t tell us what’s our fault and what isn’t, what we should take credit for and what we shouldn’t. Unlike in chess, we can’t simply work backward from the quality of the outcome to determine the quality of our beliefs or decisions. This makes learning from outcomes a pretty haphazard process. A negative outcome could be a signal to go in
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This initial fielding of outcomes, if done well, allows us to focus on experiences that have something to teach us (skill) and ignore those that don’t (luck). Get this right and, with experience, we get closer to whatever “-ER” we are striving for: better, smarter, healthier, happier, wealthier, etc.
Annie Duke • Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts
Chalk up an outcome to skill, and we take credit for the result. Chalk up an outcome to luck, and it wasn’t in our control. For any outcome, we are faced with this initial sorting decision. That decision is a bet on whether the outcome belongs in the “luck” bucket or the “skill” bucket.
Annie Duke • Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts
We are good at identifying the “-ER” goals we want to pursue (better, smarter, richer, healthier, whatever). But we fall short in achieving our “-ER” because of the difficulty in executing all the little decisions along the way to our goals. The bets we make on when and how to close the feedback loop are part of the execution, all those
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When the future coughs on us, it is hard to tell why.
Annie Duke • Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts
The more evidence we get from experience, the less uncertainty we have about our beliefs and choices.