Book SummaryThinking in Bets, by Annie Duke

1-Page Summary1-Page Book Summary of Thinking in Bets

Every decision, no matter how big or small, carries risk.

We don’t always think in terms of risk, and maybe that’s why we’re prone to making decisions in irrational ways:

• Being impulsive, or not thinking our decisions through
• Making the easy choice, or the choice that feels good in the moment, even if it’s not good for us in the long run
• Letting our biases influence our decisions

But what if we worked on keeping risk at the forefront of our minds when we made decisions? One way to do that is by thinking of every decision as a bet.

In Thinking in Bets, author Annie Duke discusses how her decades-long poker career helped her refine her approach to decision-making and develop strategies that can be applied to day-to-day life and business settings. Playing poker enabled her to observe how other people make decisions in a setting where every choice leads to one of two clear outcomes—winning or losing money—and those outcomes serve as feedback about the quality of your decisions. Her strategies will help you become more consistently rational and intellectually flexible.

When you think in bets, you start with a foundation of well-informed beliefs; you become adept at learning from the outcomes of your past decisions; and you find a group of people who can help stop you from slipping into ineffective habits. These three building blocks—beliefs, outcomes, and groups—are the core of Duke’s philosophy.

So let’s break down what “thinking in bets” actually entails.

Vetting Your Beliefs

The decisions you make are ultimately driven by beliefs. You believe that job will be more fulfilling than this one. You believe you'll like living in a big city better than your small town. You believe cardio is good for your heart and you believe that you'll live happily ever after with your partner. Some of these beliefs are based on our direct experiences. But you might be surprised by how often false beliefs creep into our heads and stick there. Making a habit of interrogating your beliefs is essential to making good decisions.

A series of experiments by a Harvard psychology professor showed that we tend to process information as true even if it is explicitly presented as false, especially if we're under pressure. Unless we're given a reason to question those beliefs, vet them, and do the research necessary to acquire the facts, those wrong beliefs stick—and sometimes they'll stick even after they've been debunked.

From there, those old beliefs can influence how we perceive new information, feeding back into our existing biases and intensifying them. This cycle is called "motivated reasoning." That's why the phenomenon known as fake news is so insidious, and so effective. It's not converting anyone to a brand new way of thinking—it's designed to reinforce existing beliefs.

Similarly, every few years, news articles claiming there's no scientific proof that flossing is necessary go viral. Many people are eager to share and believe these articles without researching beyond the headlines. Why? Because they just don't like flossing. They're biased in favor of anything that makes them feel less guilty about not flossing often enough. Dentists do continue to recommend flossing daily, and the claims that "science" doesn't support a need to floss have many caveats attached. But the articles still get written and shared, not because they're revelatory, but because they reinforce existing feelings and beliefs.

To make good decisions, you have to fight against motivated reasoning; you have to make sure your beliefs are rooted in objectivity. How do you do that?

1. Imagine you had to place a bet on every belief you hold.

If being wrong about something suddenly came with an immediate financial penalty, you'd be a lot more likely to examine that belief, second-guess yourself, and do some fact-checking. The reality is that you won't have to pay for most of the misconceptions you might hold in cold, hard cash, but many beliefs do carry a penalty when they influence your choices: the alternative futures you might have had if you'd made a different decision.

2. Acknowledge that there's likely some uncertainty in most beliefs you hold.

The more you scrutinize your beliefs, the more you'll start to realize there aren't many things you feel confident enough about to bet money on, and that's okay. Even scientific concepts are constantly being updated or disproven. You don't have to be completely sure of every belief you hold, but it's good to think about how sure you are. There’s a range of certainty, differing levels of confidence, for every belief you hold.

Learning From Outcomes

Before you can get better at making decisions, you have to get better at learning from the decisions you’ve made in the past.

Embrace Uncertainty

In a bet, you know that even if the odds are in your favor, there's a chance you could lose. Betting means knowing you don’t have all the information; you have to use your best judgment in the face of risk and uncertainty. Decisions are the same. You weigh the odds and hope for the best outcome.

Avoid black-and-white thinking—or viewing things as being either totally right or totally wrong. Most things, including the decisions you make, will be somewhere in between. In the ideal decision-making process, you evaluate your choices and pick the option with the...

Thinking in Bets Summary Introduction

In Thinking in Bets, author Annie Duke discusses how her decades-long poker career helped her refine her approach to decision-making and develop strategies that can be applied to day-to-day life and business settings.

She left her doctoral studies in cognitive psychology, took up poker to earn a little money, and ended up becoming a professional poker player whose 20-year career would garner over $4 million in earnings. The game enabled her to observe how other people make decisions in a setting where every choice leads to one...

Thinking in Bets Summary Chapter 1: Vetting Your Beliefs

Your beliefs play a major role in the decisions you make. This chapter goes over why we're prone to forming beliefs based on false information, how your existing beliefs affect the way you process new situations, and how you can make a habit of constantly challenging and updating your own beliefs—which in turn will make you a better decision-maker.

Uncovering the Beliefs That Drive Your Decisions

Betting Against the Future

Betting involves a degree of risk, usually financial. There's something at stake for you. The same is true of most of the decisions you make in your life. You’re choosing between "alternative futures," as Duke puts it, and betting that you'll be happier in one future than the other.

When you decide to move to a new neighborhood, you're making a bet in which you hope to gain something (an easier commute to work, closeness to friends or relatives, a house that better suits your family’s needs). If it doesn't work out in your favor (your new neighbors are loud, the house needs more renovation than you thought, construction begins on the next street and forces you to take a different route to work), then you've lost not only those potential...

Shortform Exercise: Uncover Your Misbeliefs

Try Googling “list of common myths” right now. Your search results should turn up any number of articles on the topic. Click one of them, and see how far you have to scroll before you find something you believed to be true is actually false.

What was the myth that you’d believed? Why did you believe it?

Thinking in Bets Summary Chapter 2: Evaluating Your Decision-Making Process

We’ve discussed the role of uncertainty and bias in the formation of your beliefs, and how interrogating your beliefs can help you build a stronger foundation on which to base your decisions.

Now we’ll examine the decision-making process itself, and how you can reframe your usual ways of thinking about it. The goal is to create a mindset that moves away from absolutes and toward intellectual flexibility, objectivity, and rationality.

We’ll cover the role uncertainty plays in our decisions, the need to judge our decisions based on our reasoning and not just the results we achieved, and the importance of thinking in shades of grey as opposed to extremes of “right or wrong.”

Separating Process From Outcomes

Before you can get better at making decisions, you have to get better at learning from the decisions you’ve made in the past. The key to that is making sure that you’re actually learning from the decisions themselves, and not thinking solely in terms of results or outcomes.

What Is “Resulting”?

“Resulting” is a poker term that refers to our habit of judging a decision based solely on the outcome it produced. It’s dangerous because it can lead you to...

Shortform Exercise: Examine Your Decisions

Practice breaking down your decisions and see if you gain some insight into your thought process.

Think about an important decision you made in the last few months. What factors did you consider before you made your choice?

Thinking in Bets Summary Chapter 3: Learning From Outcomes by Considering Luck and Skill

We’ve learned about how engaging with our own uncertainty can lead us to beliefs and decisions that are more balanced and well-thought-out. Now we’re going to address the role of uncertainty in how we analyze our outcomes and learn from them.

Before you can learn from the outcomes of your decisions, you have to figure out how much of the outcome can be attributed to skill, and how much of it was due to luck. We'll discuss some of the obstacles that prevent us from accurately sorting outcomes into the "luck" or "skill" category, and how you can work around those obstacles by building more effective thinking habits.

Outcomes Are Learning Opportunities

To improve at anything, you have to update your beliefs and change your behavior based on feedback. When it comes to decision-making, you recalibrate based on your outcomes. We’ve all heard the advice to “learn from your mistakes,” but how do you actually do that? (Bear in mind that you can learn from your successes, too.)

First you have to figure out when an outcome is something you can learn from; not all of them will provide useful information. If an outcome is the product of luck or other forces that you have no...

Shortform Exercise: Separate Luck and Skill

Practice outcome fielding by applying it, right now, to events in your life. Start by thinking about something good that you experienced recently. It can be anything—a promotion, a fun night out with friends, a new favorite movie.

List one aspect of that good thing that was out of your control—something you can attribute to luck or other forces.

Thinking in Bets Summary Chapter 4: Making Better Decisions Now by Learning From the Future and Past

We’ve discussed two ways to analyze your decisions: by guarding against resulting, and by outcome fielding. We still have one more strategy to cover. In this chapter, Duke discusses how thinking about past errors and future goals can aid your truthseeking endeavors, thereby enabling you to make better bets.

Time Travel as a Thought Exercise

"Mental time travel" is a strategy where you consider how past decisions turned out and imagine future outcomes when making a decision in the present. You ensure that you're actively learning from your past. And you keep your long-term goals in mind even when it comes to decisions where possible benefits or consequences might not be immediately obvious, as is the case with many decisions we make.

We have a tendency to prioritize our immediate desires—our present-day self—over the well-being of our future self. That’s why we tend to do things like avoid working out or neglecting the laundry a little too long.

Research shows that we make more rational decisions when forced to mentally time travel. That rationality arises in part because the same areas of your mind involved in recalling the past or envisioning the future are the...

Shortform Exercise: Plan Out Scenarios for Achieving Your Goals

Use scenario planning to envision different outcomes related to your goals, and map out all the routes that could lead to those outcomes.

Picture one of your goals for the next five years. This could be a career goal, a fitness goal, a personal goal. It could involve anything from getting a promotion to crossing an item off your bucket list. Imagine a future where you’ve achieved that goal.

Thinking in Bets Summary Chapter 5: Working With a Group to Strengthen Each Other’s Decision-Making Skills

We’ve covered the key components of thinking in bets on an individual level. This chapter discusses why having a group of people to help you make better decisions is also important. Duke cites it as a key part of her growth as a poker player, especially when she was first starting out. She also addresses questions about how you find such a group and how you set up the rules of engagement, mutually agreeing to interrogate your own and each other's decisions in a way that you wouldn't usually do in most social settings.

Why Do You Need a Group?

Self-critique is an important skill, but other people can help you see your blind spots. They bring their own unique life experiences to the table and give you the chance to view ideas from angles you hadn't considered before.

But first, you need to find someone who’s willing to have those discussions with you. Not every person wants to have their decisions or beliefs picked apart—to be asked to bet on their level of certainty. If you try to engage in that kind of “betting” with someone who hasn't agreed to it, all you're likely to do is create an awkward situation.

Think about it: If a friend loses a game and complains about...