Secrets of Better Decision Making

In 2004, Annie Duke won the World Series of Poker in Las Vegas.

She did not start out as a poker player. In fact, she had been working towards a Ph.D. in Cognitive Psychology when, in 1991, a month before defending her dissertation, she got sick and moved back to her home in Montana.

Her brother was a poker player, and she soon found herself in a new kind of lab, studying how poker players learn and make decisions. She writes in her book Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts:

“Over time, those world-class poker players taught me to understand what a bet really is: a decision about an uncertain future. The implications of treating decisions as bets made it possible for me to find learning opportunities in uncertain environments. Treating decisions as bets, I discovered, helped me avoid common decision traps, learn from results in a more rational way, and keep emotions out of the process as much as possible.”

She illustrates what she means by “decision traps” by comparing success in life to success in chess and success in poker.

Success in chess is about making quality decisions.

Success in poker is about making quality decisions
 AND luck.

For Annie, Life is Poker, not Chess. And understanding that difference makes all the difference.

One decision trap is assuming that a bad outcome can always be traced back to a bad decision.

She gives an example of a controversial decision made at the end of Super Bowl XLIX in 2015 (the annual championship of the American National Football League).

The Seattle Seahawks trailed by four points and had 26 seconds to score a touchdown. Everyone expected the coach, Pete Carroll, to call for a running play.

Instead, the coach called for the quarterback to pass. The pass was intercepted and the New England Patriot’s won.

Next day, the media headlines called it “The Worst Play-Call in Super Bowl History” and “A Coach’s Terrible Super Bowl Mistake.”

There were a few dissenting voices, many of them pointing out the history of such interceptions in that situation was about 2%. But those voices were drowned out.

What did the coach get wrong? Simple. The play didn’t work.

Think about the headlines if that play did work.

“The Best Play-Call in Super Bowl History” and “A Coach’s Terrible Super Bowl Mistake” and “A Coach’s Incredible Super Bowl Win.”

As Annie Duke points out, “Pete Carroll was a victim of our tendency to equate the quality of a decision with the quality of its outcome.” (My italics.)

She explains that as she was learning how to play professional poker, other pro players would warn her to avoid the temptations of “resulting.” Resulting means changing your strategy just because a few hands didn’t turn out well in the short run.

And she points out that Pete Carroll understood this critical distinction when he said a few days later, “It was the worst result of a call ever… The call would have been a great one if we catch [sic] it. It would have been just fine, and nobody would have thought twice about it.”

The media critics treated football like checkers. All the pieces are on the board and it is about making quality decisions.

In checkers you have all the facts.

But not in football. Like poker, winning is about quality decisions, but it is also about luck. Sometimes it does not matter how good the decision is—sometimes luck works against good decisions.

In poker, as in football, and as in life,
you do not have all the facts.

In life, what makes a quality decision great has nothing to do with a great outcome. Sometimes great decisions still land us in not-so-great outcomes.

When creating your life, even when you are end-result oriented, beware of “resulting.” Good strategies can have short-term failures while keeping you on the path to long-term success.

Stick with a winning strategy
and stand resilient against the failures.

 

1. Creating Your Life thumb

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