#60 – Annie Duke: How to improve decision making, learning, & apply ‘backcasting’ for future success

KEYPOINTS

• 01

  Poker models real decisions better than chess

  In chess both players see the whole board, so in principle a loss traces back to a mistake. Poker adds hidden information and luck, which is why Attia, who has often had to explain this to his wife, thinks it matches medicine, where you almost never have complete facts. Duke, author of Thinking in Bets, agrees that the gap between what you know and what's true is the essence of most life decisions.

• 02

  'Resulting' means judging a decision by its outcome

  Duke's term describes working backwards from the quality of the outcome to the quality of the decision. Judging a decision properly requires knowing the possible outcomes, how likely each was and how much you'd prefer each, compared across the alternatives you didn't choose. Most people take the shortcut instead.

• 03

  Learning has to cover all four quadrants

  Picture a two-by-two of good or bad decisions against good or bad outcomes. Attia argued the most painful square is a good decision with a bad outcome. Duke pushed back that people naturally dig into bad outcomes; what nobody examines is good outcomes. 'We're never having the my-life-is-great conference' to ask whether a win came from skill or luck.

• 04

  Fear of the 'idiot quadrant' pushes people to the status quo

  A consensus decision that turns out badly earns 'tough luck'. A non-consensus decision that turns out badly earns 'idiot'. As a result, people default to doing nothing over doing something, demand more certainty than needed, seek sign-off and avoid innovating. Duke argues that leaders who only review failures, as in medicine's weekly morbidity and mortality conference, reinforce this cover-yourself behaviour.

• 05

  Bill Belichick earned the right to be unconventional

  Attia, an admitted Belichick obsessive, and Duke discuss how the Patriots coach increasingly made calls like going for it on fourth-and-5. Duke notes that came only after two Super Bowl wins, once fans would tolerate decisions they didn't understand. Credibility buys room to leave the status quo.

• 06

  Look for luck in your wins too

  Nothing happening after Y2K could mean the preparation worked, the threat was never real, or the effort was wasted. There's also a fourth possibility: the downside was severe enough that hedging was correct either way. Attia raised D-Day: was Eisenhower simply lucky with the weather? Without examining the 'win', you can't tell.

• 07

  Four levels of skill, and a fourth level of thinking

  Duke learned to swim at 31, swam twice a day and filled journals with free-body diagrams. She describes moving from unconsciously incompetent to consciously incompetent (knowing why you fail, through ideas like Archimedes' principle and Bernoulli), then consciously competent, then unconsciously competent. The matching thinking skill at the top is refusing to accept a well-played win without asking whether there was a better line. Attia admitted he had 'never once had a level-four thought'.

• 08

  Wide skill gaps hide mistakes

  When you're far better than your competition, sloppy thinking still wins, which Duke calls a soft landing. Swimming is similar: you can swim badly for years, while a bike punishes imbalance immediately. Where feedback is gentle and delayed, deliberate self-examination matters even more.

• 09

  Quit fast, and try many things that cost little

  Duke argues we over-praise sticking with things and ignore opportunity cost. Her approach is to try lots of things with little downside ('go try out piano'), drop the ones that are negative expected value for happiness, health or money, and commit only to what you love. Poker players are naturally comfortable folding.