Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

When we work backward from results to figure out why those things happened, we are susceptible to a variety of cognitive traps, like assuming causation when there is only a correlation, or cherry-picking data to confirm the narrative we prefer. We will pound a lot of square pegs into round holes to maintain the illusion of a tight relationship betw

CHAPTER 2 Wanna Bet?

We have discussed several patterns of irrationality in the way we lodge beliefs and field outcomes. From these, we can commit to vigilance around words, phrases, and thoughts that signal that we might be not be our most rational selves. Your list of those warning signs will be specific to you (or your family, friends, or enterprise), but here is a

In most of our decisions, we are not betting against another person. Rather, we are betting against all the future versions of ourselves that we are not choosing.

CHAPTER 6 Adventures in Mental Time Travel

When we move away from a world where there are only two opposing and discrete boxes that decisions can be put in—right or wrong—we start living in the continuum between the extremes. Making better decisions stops being about wrong or right but about calibrating among all the shades of grey.

On rare occasions when we non-surfers need to be more specific, we just add a lot of extra words. Those extra words don’t cost us much because it doesn’t come up very often—maybe never. But for people involved in specialized activities, it’s worth it to be able to communicate a complex concept in a single word that laypeople would need lengthy phra

The most common form of working backward from our goal to map out the future is known as backcasting. In backcasting, we imagine we’ve already achieved a positive outcome, holding up a newspaper with the headline “We Achieved Our Goal!” Then we think about how we got there.

The Mertonian norm of communism (obviously, not the political system) refers to the communal ownership of data within groups. Merton argued that, in academics, an individual researcher’s data must eventually be shared with the scientific community at large for knowledge to advance. “Secrecy is the antithesis of this norm; full and open communicatio

Incomplete information poses a challenge not just for split-second decision-making, but also for learning from past decisions. Imagine my difficulty as a poker player in trying to figure out if I played a hand correctly when my opponents’ cards were never revealed. If the hand concluded after I made a bet and my opponents folded, all I know is that