Recently Read: "Thinking in Bets" by Annie Duke

Life, like poker, is one long game, and there are going to be a lot of losses, even after making the best possible bets. We are going to do better, and be happier, if we start by recognizing that we’ll never be sure of the future.

Never being sure of the future. That’s the main thesis of this wonderful book. This statement might seem obvious, but Duke highlights in her book our tendencies to fall for absolutes, its pitfalls and the benefits of embracing uncertainty.

Dealing in absolutes

Think about the last significant milestone in your life, good or bad. What do you think caused it to happen? Was it due to a series of good (or bad) decisions made? Was it due to your own wisdom and experience, or lack thereof? Chances are, you associated the good outcome with set of good decisions or your competencies, vice versa.

Duke defines this behaviour as resulting: the tendency to equate the quality of a decision with the quality of its outcome. And it’s dangerous.

As the adage goes, correlation does not imply causation. Good outcomes are largely influenced by good decision making (skill), but it is never an absolute guarantee. Luck could play a huge role. In the same vein, bad outcomes do not imply that bad decisions were made. A mere 1% probability of getting it wrong still leaves the door open for disasters.

Unfortunately, instead of fairly attributing outcomes to be a mix of skill and luck, Duke argues that humans incline absolutely towards one or the other.

This cognitive bias shapes our life drastically; it provides an unhealthy amount of confidence in our abilities after good outcomes, as well as a toxic attitude towards the world when things don’t go our way.

Suppose I received a job offer to work abroad in a country of my dreams, with much better compensation and benefits. It is very likely that I would claim most of the credit — I worked hard to prepare for the technical interviews, I put in the hours to ensure that I gain the relevant knowledge to stay ahead, I stepped out of my own comfort zone to network with strangers and gained the connections. I deserved all of it. However, such arrogance harshly discounts other factors such as good timing and global economic trends beyond my control. As a Christian, it discounts God’s providence in my own life.

A converse example can also be provided for negative outcomes. Instead of reflecting on our mistakes — poor decision making, lack of knowledge, ill-discipline — we have the proclivity to blame it on everything else around us.

Be cognisant of this bias, evaluate outcomes fairly between skill and luck. Humility and a receptiveness to change will transpire. Never be absolutely certain of the future; be comfortable with saying “I’m not sure”. Prepare for poor outcomes and don’t blame the world around you unfairly. Ultimately, God is in control.

Practical advice on betting

Throughout the book, Duke mentions other noteworthy advice on thinking in bets and drawing conclusions.

Inverse resulting on others

While we tend to attribute our good skills to our own good fortunes, bad luck to bad outcomes, we flip the narrative on its head for our neighbours. Misfortunes are solely due to their poor decisions and bad character; good outcomes are a stroke of luck.

The ramifications of inverse resulting are a lack of compassion and hubris.

I can think of the numerous times I’ve offered advice to friends and family sharing their misfortunes with me, implicitly suggesting that they could have done better instead of acknowledging and being empathetic about their plight. I can also recall all the times I’ve said “oh damn, lucky you” to others. The lack of acknowledgment on their efforts and skills breeds an insidious “I’m better than you, I deserve it more” attitude within.

Avoid this trap. There is much to learn from others when they do well. Conversely, the world could also benefit from an increase in compassion and kindness towards others in suffering.

Leave room for ambiguity

We can learn better and be more open-minded if we work toward a positive narrative driven by engagement in truthseeking and striving toward accuracy and objectivity: giving others credit when it’s due, admitting when our decisions could have been better, and acknowledging that almost nothing is black and white.

Nobody is free of bias. In the political arena, every piece of content available online will have an inclination towards the left or the right. As consumers, we all harbour an unhealthy bias towards our own political proclivity and implicitly filter or shape the information we consume to confirm our biases.

Such “motivated reasoning”, Duke claims, lends strength to an otherwise innocuous piece of false information.

Fake news isn’t meant to change minds. As we know, beliefs are hard to change. The potency of fake news is that it entrenches beliefs its intended audience already has, and then amplifies them.

Abstaining from this bias extends beyond politics. Our relationships at work, at home and amongst friends could be so much better. Gossip wouldn’t be as sticky. Everyone and every issue would be evaluated with greater impartiality and consideration. Imagine if the world were less quick to jump to conclusions. How much more could we accomplish if we understood each other better.

Leveraging uncertainty

Lastly, Duke posits that a deeper appreciation for uncertainty leads to better decision making, and ultimately, better outcomes.

Backcasting — the technique of envisioning the reality of a favourable future and then backtracking to the present— is useful for identifying the low probability events that must happen in order for the future to be realised. Make plans and allocate the necessary resources to increase the chances of these events.

Premortem — the technique of envisioning a pessimistic future and identifying the potential causes — is useful for minimising the chances of potential mistakes in the road ahead. It also ensures that we do not over-inflate the possibilities of a favourable outcome. As Duke puts it:

“… the likelihood of positive and negative futures must add up to 100%. The positive space of backcasting and the negative space of a premortem still have to fit in a finite amount of space. When we see how much negative space there really is, we shrink down the positive space to a size that more accurately reflects reality and less reflects our naturally optimistic nature.”

Conclusion

I enjoyed this relatively short read as my first book of 2025. The first 2 chapters opened up with strong points on avoiding absolute certainty and the dangers. It then follows up with another 4 chapters of practical advice on how to think in bets and its benefits. Writing this personal summary review on the first day of the Chinese New Year (a festive season where quite a lot of gambling happens within my social circles) adds a fine touch of amusement for me. Overall, it is a great book to start my 2025.