Our beliefs drive our decisions, and we rarely engage in honest truth-seeking to ensure our beliefs are accurate reflections of reality.
Being wrong hits us more intensely than being right. Knowing the odds - say an 80% chance of success - does not mean you're wrong if the 20% scenario plays out.Įmbracing uncertainty frees us from the anguish of being “wrong,” but we also lose the good feeling of being “right.” The world is random, and hidden information makes it even harder to predict how anything will turn out. That state of knowledge, in turn, is some variation of ‘I’m not sure.’” A great decision is the result of a good process, and that process must include an attempt to accurately represent our own state of knowledge. “What makes a decision great is not that it has a great outcome. Real life - and a game - “consists of bluffing, of little tactics of deception, of asking yourself what is the other man going to think I mean to do.” Paraphrasing John von Neumann (mathematician, created game theory with Theory of Games and Economic Behavior ): Life is not a well-defined form of computation (like chess) where any position would have a correct response. Working backwards to craft tight relationships between our outcomes and our decisions is susceptible to numerous cognitive traps (confirmation bias, assuming causation, etc.) Beware! Most decisions happen reflexively, so use your deliberative mind to train your automatic, reflexive mind to execute well. What do you consider your best or worst decisions? Consider distinguishing "a bad decision where got lucky with the result a well-reasoned decision that didn’t pan out." "Hindsight bias is the tendency, after an outcome is known, to see the outcome as having been inevitable." Red flag: saying “I should have known that would happen.”
Antidote: acknowledge uncertainty by admitting when you’re not sure.
Thinking in bets full#
Life resembles poker instead: it is full of uncertainty and hidden information, and you might make great decisions and still lose the hand because you don’t know what new cards will be dealt. We want life to resemble chess, where all pieces are known, and the better player can reliably defeat their slightly worse opponent. This is why we often mistakenly equate the quality of a decision with the quality of the result. Our brains crave (and create) certainty, and we dislike the idea of luck playing a significant role in our lives.
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