How To Make Better Decisions | Annie Duke | Modern Wisdom Podcast 233

In order to be a great decision maker, you have to do two things, and you have to do them pretty intentionally. You have to understand and see the luck. You can't control the luck, 'cause luck by definition is outside of your control, but you wanna see it as accurately as possible. Here are, here's the spread of outcomes that can occur and here's how likely those things are to happen. But then the other thing you need to do is start really examining what are the beliefs that you have that inform the decisions that you make. (air whooshing)

Many of our listeners will be familiar with you, but for those who aren't, can you give us a bit of background what makes you an authority on decision-making?

Oh my gosh, (laughs) that sounds so very serious. Um, well, I guess it's, I, I guess it would be kind of the, the very strange path that I took, uh, as an adult. Um, so I started off after college, uh, in a PhD program at the University of Pennsylvania. I was studying cognitive psychology, um, cognitive science. Um, in particular, uh, I was really thinking about how people learn. Um, so I was, I was gonna go off and become a professor, as one would after getting that degree. Um, and as I was, uh, ABD, as we call it, b- before I, um, defended my thesis, I actually got sick and ended up, uh, needing to take about a year off before I went out to become a professor. And in the year that I took off, I started playing poker. And I did that kind of in the meantime in order to, uh, support myself until I could go and start my career. And, uh, so the meantime turned into like 18 years-

(laughs)

... as it does. Um, I kind of kept playing poker. Um, and you know, a- and then about eight years into my poker career, I actually started thinking about this very interesting conversation that cognitive science, my background in cognitive science w- could have with the real-world decision-making problem that poker presents, which is obviously very high stakes, lots of skin in the game. Uh, if you're bad at deciding, you lose all your money, um, over the long run. Um, and so you really have to be kind of thinking about, in particular, how, how do people learn in these very n- noisy environments? Meaning, um, uh, where there's lots and lots of luck, uh, in terms of influencing the outcome, and also lots of hidden information, imperfect information, which is, by the way, almost any decision you've ever made in your life, including just like whether to proceed through an intersection, um, (laughs) i- is actually very poker-like in its decision. So, um, so I did, so I played poker till 2012. In 2002, I started thinking about how these two things might converge, started speaking on that topic quite a bit. And then in 2012, I retired from poker, started really focusing this, on this full-time, spent a lot of my time consulting with companies on decision strategy, um, giving talks, writing books on the topic. Um, and then I've also gone back to academics and I'm back to doing some academic research in cognitive science. So I, I took a full loop. I, I en- I ended up getting back to where I started, but it just took me a while. It took me a while to circle back. So I mean, I guess, I guess that's kind of, you know, I guess I have some practical, some practical bonafides and some academic bonafides maybe? I don't know, trying to answer your question.