Ever since I listened to this podcast with Maria Konnikova, I had decided to read both Annie Duke's book Thinking In Bets and her book The Biggest Bluff. As someone who is not a huge fan of Poker - I was very much sold on the premise of the books - decision making and how the game of Poker involves a lot of decision making. The story of both Annie Duke and Maria Konnikova is similar and fascinating - both hadn't ever played poker before turning a pro and winning some money at poker tournaments.
Since I read both books back-to-back - yes some of the stuff was repetitive but it helped solidify my understanding of the decision making process, the biases that come in the way and the debate of skill v/s chance. This is my distillation of learnings of it on how to improve our decision making.
Similarity between life and poker
- Both authors spent a lot of time establishing how life is more like poker instead of the common belief - chess. Chess is rigid, mathematical with every move calculated however poker has lots of unknown sets of info - much like life.
- We need to get comfortable with uncertainty! Both in life and in poker - you would almost never have the full set of information. Get comfortable with it.
- Both authors were influenced by John Von Neumann
- Casinos are designed to make a play on people's psyche.
Beliefs & Biases
- People cling on to their beliefs strongly once it has lodged in their mental psyche.
- It should be no surprise then that the smarter you are - the more skillful you are to create a narrative around anything to support your beliefs. It means being smart doesn't mean you don't have any biases - rather it means you have bigger blindspots.
- It is very important - as we only get exposed to the info we have been info we have been exposed to, only live experiences we have experienced and can only think of hypotheses we can conceive of.It is incredibly helpful to find reasons why our theories can be wrong as it's sometimes beyond us to think of them - so very valuable to have someone talk us through them.
- It is for the same reason nowadays we have security exercises happen through red team v/s blue team format. We cannot know the truth without hearing the other side.
- Thus, avoid group-think. Stay away from echo-chambers. Welcome diversity of opinions and thoughts to challenge your beliefs and biases.
- Lot of people never take the proverbial Red Pill- they are always living in their own false narrative of the world and the reasons why things happen.
- Knowing about a bias, doesn't mean you would not exhibit it.
- If you are lucky enough to have a good set of friends to bounce around your ideas that's a great tool to hone your skills. Two to disagree and one to referee.
- To extend the above point - free press and free speech ensures that information, points in favor and counter to it reach the public. Yes, sometimes it gets messy but there is no better way to ensure this happens. I felt what Annie Duke said here is quite powerful in a socio-political context -
The government serves the people, so the people own the data and have a right to have the data shared with them.
- I learnt of a new concept Rashomon Effect i.e - one event can have two different accounts. Thus, we cannot rely on any one person to provide the full and objective account of anything. The reasons why so - biases, narratives, blindspots. Get the idea?
- As a result, more info helps one to arrive at an accurate decision.
- How do you gather more info - by being open-minded.It is easier said than done - as our biases come into the picture. Imagine if we hear an account from someone we like v/s hearing an account from someone we don't like told us the same story.
- John Stuart Mill said it best - the only way to gain knowledge is to examine every variety of opinion.
Decisions & Outcomes
- Often we confuse bad results as a consequence of bad decisions which is definitely not true. Bad Results != Bad Decisions.
- Every decision we take can be understood as a bet - which is based on our beliefs. Thus, the better accurate our beliefs are, the better the foundation of bets we make.
- We humans are terrible at quantifying the role of luck so we comfort ourselves by overlooking its importance.
- By improving decision quality we increase our chances of a good outcome, not guarantee them.
- It matters how we got there. Outcomes are path dependent.
- In the moment emotions affect the quality of decisions we make in those moments. In poker world it is called tilt.
- Bad outcomes specially have an impact on our decision making going forward - making it likely that we would take irrational, emotionally charged decisions.
- To be rational - take the longview always.
- To keep one honest - a good idea is to keep a decision swear jar and do scenario planning. Infact, planning for bad scenarios increases one's chances of success.
- There are certain techniques called like Backcasting - Walking back from a positive outcome from the future; and Negative visualization - thinking about things that can go wrong makes it more likely to achieve goals as fear is a strong driver.
- Sometimes it helps if it so happens you are the last person to act - it is the best situation to be in as you have the most info to make a decision.
- In many cases, future outcomes are completely independent of the past but the human mind sometimes misses this fact.
- This is where the personal belief system comes in the picture - called locus of control. When something happens in the external environment, is it due to our actions (skill) or some outside factor(chance)?
- People who have an internal locus of control tend to think they affect outcomes, often more than they actually do!
People who have an external locus of control tend to think what they do doesn't matter too much, events will be what they will be.
- People with internal locus - are more successful, mentally healthier and have more control over their fate so to speak.
People with external locus - are more prone to depression and have a careless attitude.
Kind of makes sense now.
- This leads to another point which both authors emphatically said - do not dwell on bad beats aka do not dwell on things when outcome is not in your favor. It is a bad mental habit.
- Negativity can be a luck dampener.
Positivity can be a luck amplifier.
- Clarity of language = Clarity of thought
So, be careful of what you tell yourself.
- Do not pontificate on what would have/could have/should have happened!
- As the title of the podcast linked earlier says - Less Certainty, More Inquiry. It is very important to not be strongly tied to our opinion and always acknowledge room for uncertainty. Rather than saying - "You're wrong!" - better engage by saying - Are you sure about that? Or Have you considered this other way of thinking about it? And also avoid the word BUT as it is a denial and repudiation of what came before.
Yes, sounds a lot of words but our mind is easily molded by the words we say so we need to watch out.
- If you did all you could, do not think about chance. As inevitably, variance will go your way and things will eventually even out.
- Since there is always so much focus on luck - I liked how Maria K explains it.
In everything, stability and support are important components in success. In their absence, there's that much more to overcome, that many more obstacles that need to be moved before you're on the same level as the next person who is fortunate.
- There's this good quote -
Choice of attention - to pay attention to this and ignore that - is to the inner life what choice of action is to the outer. In both cases man is responsible for his choice and must accept the consequences.
- The point being - there is a cost of being not in the moment and missing out on subtle cues.
- And also this:
I must pay tribute to that powerful but capricious lady, Chance, who chose to bestow her beneficence on my personal life even though I spent much of my mathematical life trying to prove she does not really exist.
- Mark Kac, Enigmas of Chance 1985
- Also, worth noting is that it is sometimes useful to know when let go of things or stop trying. No easy way to decide but just knowing that it is okay to stop when you feel you have given it your all.
- To conclude, as goes the title of the book "The Biggest Bluff" - the biggest bluff is we believe our skills enough to carry the day even though luck is stacked against us and we do not know and still keep on trying!
- People cling on to their beliefs strongly once it has lodged in their mental psyche.
- It should be no surprise then that the smarter you are - the more skillful you are to create a narrative around anything to support your beliefs. It means being smart doesn't mean you don't have any biases - rather it means you have bigger blindspots.
- It is very important - as we only get exposed to the info we have been info we have been exposed to, only live experiences we have experienced and can only think of hypotheses we can conceive of.It is incredibly helpful to find reasons why our theories can be wrong as it's sometimes beyond us to think of them - so very valuable to have someone talk us through them.
- It is for the same reason nowadays we have security exercises happen through red team v/s blue team format. We cannot know the truth without hearing the other side.
- Thus, avoid group-think. Stay away from echo-chambers. Welcome diversity of opinions and thoughts to challenge your beliefs and biases.
- Lot of people never take the proverbial Red Pill- they are always living in their own false narrative of the world and the reasons why things happen.
- Knowing about a bias, doesn't mean you would not exhibit it.
- If you are lucky enough to have a good set of friends to bounce around your ideas that's a great tool to hone your skills. Two to disagree and one to referee.
- To extend the above point - free press and free speech ensures that information, points in favor and counter to it reach the public. Yes, sometimes it gets messy but there is no better way to ensure this happens. I felt what Annie Duke said here is quite powerful in a socio-political context -
The government serves the people, so the people own the data and have a right to have the data shared with them.
- I learnt of a new concept Rashomon Effect i.e - one event can have two different accounts. Thus, we cannot rely on any one person to provide the full and objective account of anything. The reasons why so - biases, narratives, blindspots. Get the idea?
- As a result, more info helps one to arrive at an accurate decision.
- How do you gather more info - by being open-minded.It is easier said than done - as our biases come into the picture. Imagine if we hear an account from someone we like v/s hearing an account from someone we don't like told us the same story.
- John Stuart Mill said it best - the only way to gain knowledge is to examine every variety of opinion.
- Often we confuse bad results as a consequence of bad decisions which is definitely not true. Bad Results != Bad Decisions.
- Every decision we take can be understood as a bet - which is based on our beliefs. Thus, the better accurate our beliefs are, the better the foundation of bets we make.
- We humans are terrible at quantifying the role of luck so we comfort ourselves by overlooking its importance.
- By improving decision quality we increase our chances of a good outcome, not guarantee them.
- It matters how we got there. Outcomes are path dependent.
- In the moment emotions affect the quality of decisions we make in those moments. In poker world it is called tilt.
- Bad outcomes specially have an impact on our decision making going forward - making it likely that we would take irrational, emotionally charged decisions.
- To be rational - take the longview always.
- To keep one honest - a good idea is to keep a decision swear jar and do scenario planning. Infact, planning for bad scenarios increases one's chances of success.
- There are certain techniques called like Backcasting - Walking back from a positive outcome from the future; and Negative visualization - thinking about things that can go wrong makes it more likely to achieve goals as fear is a strong driver.
- Sometimes it helps if it so happens you are the last person to act - it is the best situation to be in as you have the most info to make a decision.
- In many cases, future outcomes are completely independent of the past but the human mind sometimes misses this fact.
- This is where the personal belief system comes in the picture - called locus of control. When something happens in the external environment, is it due to our actions (skill) or some outside factor(chance)?
- People who have an internal locus of control tend to think they affect outcomes, often more than they actually do!
People who have an external locus of control tend to think what they do doesn't matter too much, events will be what they will be. - People with internal locus - are more successful, mentally healthier and have more control over their fate so to speak.
People with external locus - are more prone to depression and have a careless attitude.
Kind of makes sense now. - This leads to another point which both authors emphatically said - do not dwell on bad beats aka do not dwell on things when outcome is not in your favor. It is a bad mental habit.
- Negativity can be a luck dampener.
Positivity can be a luck amplifier. - Clarity of language = Clarity of thought
So, be careful of what you tell yourself. - Do not pontificate on what would have/could have/should have happened!
- As the title of the podcast linked earlier says - Less Certainty, More Inquiry. It is very important to not be strongly tied to our opinion and always acknowledge room for uncertainty. Rather than saying - "You're wrong!" - better engage by saying - Are you sure about that? Or Have you considered this other way of thinking about it? And also avoid the word BUT as it is a denial and repudiation of what came before.
Yes, sounds a lot of words but our mind is easily molded by the words we say so we need to watch out. - If you did all you could, do not think about chance. As inevitably, variance will go your way and things will eventually even out.
- Since there is always so much focus on luck - I liked how Maria K explains it.
In everything, stability and support are important components in success. In their absence, there's that much more to overcome, that many more obstacles that need to be moved before you're on the same level as the next person who is fortunate.
- There's this good quote -
Choice of attention - to pay attention to this and ignore that - is to the inner life what choice of action is to the outer. In both cases man is responsible for his choice and must accept the consequences.
- The point being - there is a cost of being not in the moment and missing out on subtle cues.
- And also this:
I must pay tribute to that powerful but capricious lady, Chance, who chose to bestow her beneficence on my personal life even though I spent much of my mathematical life trying to prove she does not really exist.
- Mark Kac, Enigmas of Chance 1985
- Also, worth noting is that it is sometimes useful to know when let go of things or stop trying. No easy way to decide but just knowing that it is okay to stop when you feel you have given it your all.
- To conclude, as goes the title of the book "The Biggest Bluff" - the biggest bluff is we believe our skills enough to carry the day even though luck is stacked against us and we do not know and still keep on trying!
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