We continue our run on legendary authors with our guest today, Annie Duke. She's got a new book out called How To Decide: Simple Tools For Making Better Choices. In this episode, she teaches us about how she thinks about decisions, and how building stronger decision skills can make a difference at a time of crisis, particularly like the kind of time we're living in now.
She was one of the world's top professional poker players. She tells us how to think about the possible and the probable, how to think about the different futures that could occur. Anne’s got a very provocative point of view about luck that I think you'll find fascinating. In addition, I would suggest you pay close attention to her thoughts on the power of a hedge.
Every Decision Is A Bet
Annie briefly tells us what has been going on in her life and family, especially during the pandemic. She shares her personal journey and professional background on how she got into poker. Take note where she shares how to decisions while facing massive amounts of uncertainty.
“The point is to hold all those possibilities in your head at once. To be thinking when you should be making the decision. What does that look like under different futures that might occur? So how much money might you win or gain under those futures, or I might be setting up a play. If one of those futures were to occur, you might do something now that allows you to do something later. You have to be thinking about all those things at once. So you always have to have it in mind that the future is uncertain.” - Annie Duke
On this topic, Annie discusses the companions to bets, which are called a ‘hedge’. This, diving in deeper, can refer to the different ways the future can unfold and the negative impact it can have in life. Annie shares with us further its meaning as well as examples to help set the tone of the message.
Further, she advises to mitigate and weigh in the cost that comes with the negative outcomes. She then connects hedging with what she calls ‘the paradox of experience’.
“It fits into this broad category of something I call the paradox of experience, which is that you need experience in order to become a better decision maker. Any single experience could interfere with the lessons that you learn. There's many, many possible futures, but only one past. Once we know the past that occur, we sort of think of it as inevitable. Then we regret having done anything that would plan for any other future.” - Annie Duke
Good Decision Process
Annie discusses how choosing different options can contribute to the likelihood of receiving luck. This luck can influence life in different ways, whether for the good or bad. In addition, she discusses beliefs as a foundation of the decision making process and how the information gathered from this can contribute to the decisions made.
“There's different probabilities of each option occurring. It could be that you have the same set of possibilities, but they have different impacts. The magnitude of those things is different. So this kind of tells you now if you can think about those two options. You want to understand what that set looks like. And then when you choose an option, what you’ve done is you’ve decided on the set of possibilities, and how probable each of those things is to occur. Which thing actually happens.” - Annie Duke
To know more about how to make better decisions and the challenges that come with it, download and listen to this episode.
Annie Duke has leveraged her expertise in the science of smart decision making to excel at pursuits as varied as championship poker to public speaking.
Annie’s latest book, How to Decide: Simple Tools for Making Better Choices, is available on September 15, 2020, from Portfolio, a Penguin Random House imprint. Her previous book, Thinking