Thinking in Bets by Annie Duke

Summary

'Thinking in Bets' by Annie Duke explores how decision-making under uncertainty can be improved by adopting the mindset of a professional poker player. Duke explains that most outcomes in life are influenced by luck, not just skill, and that evaluating decisions requires us to separate the quality of our choices from their results. By treating decisions as bets, we can better assess risks, manage bias, and learn from our experiences. The book provides both philosophical insights and practical tools for making smarter decisions in business and life.

Life-Changing Lessons

1. Embrace uncertainty: Accept that you rarely have all the information and that luck plays a major role in outcomes.

2. Focus on process, not just results: Judge decisions based on the quality of the reasoning and process behind them, not only by the outcomes.

3. Build a truth-seeking group: Surround yourself with people who challenge your thinking and provide honest, constructive feedback.

Publishing year and rating

The book was published in: 2018

AI Rating (from 0 to 100): 87

Practical Examples

1. Resulting (Outcome Bias)

   A CEO makes a risky move that succeeds, and everyone applauds her genius. But Duke argues we should focus on her decision-making process rather than the result because luck could have easily led to a different outcome. This concept, called 'resulting,' warns us not to equate outcome with the quality of the decision.

2. Thinking in Bets as a Framework

   When making a big career move, Duke suggests thinking of the decision as placing a bet. Spell out what you know, what you don’t, and what the possible outcomes and odds are. This framing makes uncertainty explicit and helps clarify your reasoning.

3. Reframing Wrongness

   Instead of feeling shame if proven wrong, Duke encourages seeing it as an opportunity for learning. For example, if you bet a friend on a sports outcome and lose, rather than defending your position, you analyze what information you missed. This attitude improves your future decision-making.

4. Forming Truth-Seeking Groups

   Duke illustrates the benefit of surrounding yourself with 'accountability partners' who will challenge your thinking, like a poker player’s study group. Sharing your reasoning with such a group improves your judgment and reduces bias, as peers can identify your blind spots.

5. Decision Journaling

   Duke recommends keeping a 'decision journal' where you write down your thought process, available information, and predicted outcomes for major choices. Months later, you can review what you got right or wrong—not just outcomes, but the reasoning leading to each decision.

6. Separating Luck and Skill

   The book uses poker hands to demonstrate how good decisions can lose and bad decisions can win. Duke encourages evaluating decisions by whether they maximized your odds, teaching you to learn from outcomes without getting emotionally derailed.

7. Probabilistic Thinking

   Duke urges readers to assign probabilities to beliefs rather than treating everything as black or white. For example, instead of insisting you’re certain to get a promotion, you estimate your chances, which helps you adjust plans and expectations.