Outcomes and Causes

Anne Duke wrote this book called Thinking in Bets, that made me look at the phrase “Wanna bet?” in a very different way:

“Suddenly, you’re not so sure… Ideally it triggers us to vet our belief.”

How do I know this? What is the reliability of my source? Is my information upto date? What could I be missing?...

 

Here’s how we’re wired to form our beliefs: (1) Hear something, (2) Believe it by default (unless it’s outrageous or contradicts what we already believe), (3) Only occasionally, check whether it is true or not:

“`Wanna bet?’ triggers us to engage in that third step that we only sometimes get to.”

 

Duke is a (very good) poker player, an area where betting is, er, the whole point of the game. The feedback in poker is not like physics or chess. You could make all the right moves and still lose. There’s luck involved, there are factors you weren’t aware of, a beginner could beat a master… just like life.

 

This makes it very hard to know what to learn from a loss or a win at a game of poker. Did you win because you played well? Or luck? Did you make the right decision and still lose? It’s like a doctor’s job, Duke remind us - a cough could be due to so many different reasons. One outcome, many possible causes. That’s medicine. And poker. And life. So how do we learn when the feedback loop is so open to interpretation?

 

If a certain fact or possibility makes you feel uncomfortable, don’t dismiss it. Instead explore it further. Easier said than done, of course, which is why Duke suggests talking about issues in groups. Not just any groups, but diverse groups, with people of different views than your own:

“A diverse group can do some of the heavy lifting of de-biasing for us.”

 

She also warns of the excess weightage we give to something in the here-and-now. One way around that problem is to ask yourself how you’d view this exact same event a year from now? A decade from now? It helps put things in perspective, helping avoid taking actions and decisions we tend to make based on in-the-moment emotions.

 

And remind yourself of the hindsight bias - with hindsight, everything seems obvious. Dangerously, it even suggests that things were inevitable. Courts make this mistake often, finding someone guilty for negligence after the fire broke out. Whereas the right question to ask is whether it was foreseeable as a bad decision before the fire broke out.

 

Lastly, come to terms with the fact that outcomes in real life are probabilistic, not guaranteed. It’s not easy at all, of course, but then again, if it was easy, she wouldn’t be writing a book about it, would she?