Afsnit 18 af NewRetirement-podcasten er et interview med Annie Duke - en bedst sælgende forfatter, offentlig taler og tidligere verden mester poker professionel. Vi diskuterer hendes nye bog Thinking in Bets, som fokuserer på beslutningstagning, overbevisninger og læring, når du har ufuldkommen information gennem linsen af, hvad hun har lært ved pokerbordet og i hendes egen adfærdsøkonomiske forskning.

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Fuld udskrift af Steve Chens interview med Annie Duke

Steve: Velkommen til NewRetirement-podcasten. I dag skal vi tale med Annie Duke, som er en World Series of Poker-armbåndsvinder, en tidligere pokerprofessionel med $4 millioner i karrieregevinster, forfatter og offentlige taler om adfærdsøkonomi, skævheder, beslutningstagning, læring og det bedre. på lang sigt gennem linsen af ​​poker og Thinking in Bets, navnet på hendes nye bog. Annie bor uden for Philadelphia, og jeg er super glad for at have hende med i vores show. Så med det, Annie, velkommen til vores show. Det er dejligt at have dig med.

Annie: Jeg er så glad for at være her, tak.

Steve: Ja, jeg sætter pris på, at du tager dig tid. Så før vi kommer til din bog og lidt om adfærdsøkonomiske ting, vil du dele lidt om dit liv? Sådan er du vokset op og nogle af de store milepæle indtil dette tidspunkt?

Annie: Jeg starter bare med mit voksenliv, ikke? Så jeg gik til undergrad ved Columbia University, jeg studerede med en forskningsassistent i et helt år med en professor der, hvis navn var Barbara Landau, og hun studerede kognitiv psykologi og var specifikt interesseret i førstesprogstilegnelse. Hvad bacheloren, i slutningen af ​​college, snarere i slutningen af ​​bacheloren, opfordrede hun mig til at gå videre til University of Pennsylvania for at studere med hendes mentorer, Lila Gleitman og Henry Gleitman på UPenn, hvilket jeg gjorde. Og jeg tilbragte fem år der på National Science Foundation Fellowship, og jeg studerede kognitiv videnskab, og jeg var specifikt fokuseret på førstesprogstilegnelse.

Hvilket egentlig bare er et spørgsmål om, hvordan lærer man i et … system, når der er meget støj, meget tilfældighed? Så i slutningen af ​​det skulle jeg ud og blive professor, hvilket egentlig var det, jeg troede, at ruten var, jeg skulle tage, og jeg blev faktisk syg. Jeg havde døjet med et maveproblem under mit sidste år på kandidatskolen, og det blev meget slemt, da jeg var på vej mod … Til mine jobsamtaler. Så jeg landede faktisk på hospitalet i to uger og måtte aflyse mine jobsamtaler og havde brug for lidt tid til at komme mig.

Så jeg havde til hensigt at tage et år fri fra ingenting og gå tilbage på arbejdsmarkedet. I løbet af det år var det faktisk, hvor jeg begyndte at spille poker, simpelthen fordi jeg havde brug for penge. Jeg havde ikke mit fællesskab, og jeg havde bare brug for en måde at tjene penge på. Så åbenbart blev mellemtiden til omkring 18 år. Jeg nåede aldrig helt tilbage til at være professor, men omkring otte år efter at blive virkelig, virkelig interesseret i poker. I 2002 blev jeg bedt om at tale med en gruppe af optionshandlere, og jeg blev bedt om at tale om risiko, og jeg begyndte virkelig på et tidspunkt eksplicit at fusionere min akademiske uddannelse omkring læring, og hvad denne virkelige high stakes anvendelse af Den slags rektorer var, at du på en måde udførte ved pokerbordet, og hvordan poker og det, du så ved pokerbordet, kunne udgøre den slags ting, som jeg har lært på kandidatskolen.

Den slags ting om, hvordan vi lærer, og skævheder og heuristik, og den måde, vi håndterer feedback på, især når det er støjende. Så jeg begyndte at tale om det og udviklede mig... Meget af mit liv blev brugt på det. Det blev der faktisk brugt mere tid på. En del af mit liv har været poker gennem det sidste årti, hvor jeg spillede poke. Og så i 2012 gik jeg på pension, og jeg begyndte at gøre dette på fuld tid. Jeg grundlagde en non-profit ved navn How I Decide, der specifikt var rettet mod at bygge feltet og skabe energi og programmer til at undervise børn i beslutningstagning, kritisk tænkning, som jeg på det tidspunkt følte, at jeg var en stor evangelist for.

Og så skrev jeg denne bog med tanke på det. Så det er en slags, "Så skal du. Det er min livshistorie.”

Steve: Okay. Så Annie, det er interessant. Så det lyder for mig, at du havde denne 18, 20-årige professionelle pokerkarriere, men det lyder som om, at du i sidste halvdel af det faktisk brugte mere tid på at grave mere ned i den adfærdsmæssige økonomiske side af det her med at spille poker og begynde at tænke meget mere over beslutningstagningssiden. Er det rigtigt?

Annie: Ja. Nå, jeg tror, ​​at jeg altid har været en, der ikke var rigtig tilfreds med kun at gøre én ting. Så når noget er spændende for mig, dykker jeg ligesom bare ned i det, og jeg tror, ​​det er det, der skete. Det var totalt uheld, at jeg endte med at tale foran denne gruppe af optionshandlere. De kom faktisk ikke engang til mig for at tale med dem. De kom til min ven Eric Seidel. Men heldigvis for mig, kan Eric Seidel virkelig ikke lide at tale offentligt. Så han anbefalede mig at gøre det i stedet for, og sagen var, da jeg gik på efterskole, som alle kandidatstuderende gør, jeg underviste meget, og jeg har altid elsket at undervise.
Så det er sådan her mig til virkelig at tænke på de to ting, som jeg virkelig elskede som voksen. Det akademiske arbejde, som jeg har lavet inden for kognitiv og adfærdspsykologi, og denne anden ting, som jeg lavede, som var med en slags underlig leg, som jeg havde fundet min måde at spille på, og fandt ud af en måde at bringe dem sammen, og komme til at begynde at tænke på dem igen på en meget stringent måde, men også komme tilbage til undervisningen, hvilket var noget, jeg virkelig elskede. Og så følte jeg, at det var lidt den perfekte ting for mig at kunne gøre begge ting på én gang og finde skæringspunktet mellem de to ting.

Steve: Ja. Det kan jeg sætte pris på. Jeg havde tænkt mig at spørge dig, hvorfor du skrev den bog, og det lyder som om, at det er en dejlig ... Den samler de to sider, hvor du bruger 18 år på at spille poker og lære, hvordan du spiller det spil, og hvordan du tænker om det, og så alt dit arbejde omkring kognitiv psykologi, beslutningstagning. Og det er en virkelig oplysende bog. Jeg nød det virkelig. Jeg noterede det, da jeg læste det, så jeg kunne kredse tilbage og komme med nogle gode spørgsmål. Og nogle store ting, du gerne vil have, at folk skal have efter at have læst din bog?

Annie: Jeg tror, ​​takeaway nummer et omfavner usikkerhed. Jeg tror, ​​at meget af det, vi forsøger at gøre i vores liv, er at lade som om eller narre os selv eller overbevise os selv eller overbevise andre mennesker om, at vi er sikre på vores beslutninger, at vi er sikre på vores overbevisning, at vi er sikker på, hvordan tingene vil gå. Og det er ikke en særlig præcis model af verden, og jeg tror, ​​at det faktisk giver dig en del angst og faktisk skaber mangel på medfølelse mange gange som for os selv, for andre mennesker.

Angsten kommer fra en slags … Lige pludselig som om tingene ikke fungerer godt, og det er ligesom beskyldningen, og "Jeg burde have vidst det" og "Hvorfor så jeg ikke dette komme?" Og den slags ting, der følger med, er meget angstfremkaldende og ikke specielt medfølende med sig selv. Og jeg tror, ​​at hvis vi tænker på det faktum, at det på grundlag af enhver beslutning, vi træffer, er baseret på vores overbevisning, at hvis vi har denne illusion af vished om de ting, vi tror, ​​vil huset falde fra hinanden, fordi fundament, der ikke vil være særlig godt, fordi det ikke er en nøjagtig model af de ting, vi tror på. Der er ingen overbevisninger, som vi har, der er baseret på perfekt information, bare en slags per definition.

Og vi kan tænke over det. Vi kan tænke på omfanget af menneskets historie antallet af ting, som mennesker troede, at det på en måde viste sig ikke at være sandt senere, som om Jorden er flad, solen kredser om Jorden. Jeg mener, det er simple, men jeg mener, der er mange af den slags ting. Der er masser af arter, som vi troede var uddøde, som nu er blevet uddøde som et eksempel. Men der er masser og masser af ting, som du sådan kan tænke på, og det er en ret god beskrivelse af din egen overbevisning i enhver stat, og når jeg siger til folk:"Hvad er ting, du tror på, da du var 20? Er der noget, du nu indser, selvom du var så sikker på, da du var 20, at du egentlig burde have været sikker på det?” Og de siger:"Åh ja, alting."

Og jeg er sådan, "Ja, så gå ikke ud fra, at du skal se din overbevisning nu på en anden måde." Så jeg tror, ​​at grundlaget for rigtig gode beslutninger, jeg tror, ​​er grundlaget for at være afgørende. Jeg tror, ​​at grundlaget for at opbygge en nøjagtig model af verden, for virkelig at være god til at tænke over, hvad fremtiden kan byde på, kommer fra at omfavne usikkerhed, ikke at smutte den væk. Så jeg vil sige, at det ville være den første vigtigste takeaway. Og så ville den anden vigtigste takeaway være, prøv ikke dette derhjemme. Prøv ikke dette på egen hånd, for ja. Vi er bare en slags bygget til at fortolke verden på en forudindtaget måde.

Der er alle mulige grunde til det, men jeg mener, jeg forestiller mig, at de fleste af de mennesker, der lytter, er bekendt med bekræftelsesbias, for eksempel, at vi lægger mærke til ting, der bekræfter vores overbevisning, og har en tendens til ikke at lægge mærke til ting, der ikke gør det. Bias i bagklogskab. Det er den følelse af ting, der rent faktisk opstår, er uundgåelige. Så du kan have noget, der har 1% chance for at ske, og efter det er sket, føles det som om, det skulle være sket på den måde for eksempel. Så det er en bias. Vi har en bias over for falske positiver.

Så der er alle disse forskellige typer måder, og folk, der for eksempel har læst og tænker pass and flow burde være ret fortrolige med en masse af den slags fordomme, der på en måde driver vores hjerneware. Og sagen er, at hvis jeg fortæller dig om dem, og jeg gør dig opmærksom på dem, og du er en klog person, betyder det ikke, at de forsvinder. Faktisk har der i nogle tilfælde været beviser, der viser, at det bliver en lille smule værre. Så jeg er bare meget tilhænger af at rekruttere andre mennesker til processen for virkelig at hjælpe dig med at blive en bedre beslutningstager. På ideen, når jeg ser andre mennesker, kan jeg se deres skævhed en kilometer væk, på en måde, så jeg ikke kan se min egen skævhed.

Så jeg kan bruge det til min fordel ved at sige:"Hej, lad os lave et hold, og du vil se min bias, og jeg vil passe på din bias, og så vil vi begge være bedre stillet til det. ” Så det ville være den anden store takeaway er at få nogle mennesker i processen med dig til virkelig at forpligte sig til at prøve at være bedre beslutningstagere og hjælpe hinanden.

Steve: Ja. Det er fantastisk. Det er en stor indsigt. Så de to ting er en slags omfavnelse af usikkerhed, ikke? Antag ikke, at der kun vil være ét udfald, men hende, der er en række udfald med forskellige sandsynligheder, som jeg-

Annie: Og din overbevisning er et sted mellem sand og falsk. Det er den anden ting.

Steve: Ret. Og din overbevisning og dine egne skævheder har stor indflydelse på, hvordan du opfatter verden. Ja, tanken om at have et hold omkring dig, det synes jeg er helt fornuftigt. I virksomheder er dette nemt at gøre. Hvad med folks personlige liv? Jeg gætter på, at det er deres ægtefælle eller partnere og venner, hvis de skal rekrutteres til at være en del af dette?

Annie: Ja. Man kan sådan set finde folk hvor som helst, men jeg vil bare vende tilbage til at sige, at det ikke er så nemt at gøre i en virksomhed. For grunden til, at vores naturlige tendens er, når vi kommer i grupper, er at standard ind i en bekræftende stil. Så det ville gå under gruppetænkning, ekkokammer, den slags. Og især er der mange mennesker, der på en måde tænker på, at et godt team som folk er på samme side, hvad de så fortolker som enighed.

Så de forsøger med vilje at skabe sammenhæng i holdet omkring folk, der har det samme synspunkt og de samme overbevisninger og den samme slags forpligtelse til de samme slags ideer, og det faktisk … jeg forstår hvorfor folk fortolke det at være en holdspiller på den måde, men den type teammiljø vil skabe et ekkokammer, hvor folk ikke nødvendigvis vil føle sig frie til at tilbyde alternative perspektiver eller udfordre gruppen, fordi de kommer til at virke for anderledes tænkende , eller nej-siger eller ligesom en af ​​Debbie Downers.

Steve: Ja. Fuldstændig.

Annie: Nej.

Steve: Det forstår jeg.

Annie: Til højre.

Steve: Ja, og nogle virksomheder, og jeg ved, at i nogle firmaer forsøger de virkelig at opmuntre folk til at have en sund debat og en stærk stemme, andre meninger. Nogle mennesker siger:"Hey, det er fantastisk at skændes. Jeg er ligeglad med, om vi kommer ind i det på disse møder, fordi vi vil træffe den bedste beslutning,” og du skal på en måde gå ind for din holdning. Men jeg tror, ​​det nok er undtagelsen i mange firmaer. Jeg tror du har ret. En flok mennesker samles for at komme og tale om det. Nogen har fået en stærk ide, og alle står på en måde og siger:"Okay, fantastisk. Lad os gøre det.”

Annie: Ja. Og jeg tror, ​​det er at lytte til Shane Snow, der skrev Dream Teams, og han talte om en slags tilblivelse af dette. Der var noget forskning, så jeg føler, at det er det samme som noget af selvværdsforskningen, og hvordan den slags udviklede sig til, at alle fik et trofæ. Det var denne form for fortolkning af dette bevis, der blev til noget, som jeg ikke er sikker på, var så nyttigt. Men han sagde, at der netop var denne forskning, der viser, at folk er gladere på arbejdet, når de føler, at de er på samme side. Men der er forskellige måder, du kan definere at være på den samme side, som for eksempel at vi kunne være på samme side, fordi vi føler, at vi inden for vores team er på samme side om processen, og vi er enige om, at den bedste proces er at fremme sund debat.

Men den simple version af at være på samme side er, at vi er enige med hinanden. Det er sådan set den enkle måde at fortolke at være på samme side, og at da de så, da denne forskning kom ud, at folk er gladest på arbejdet, når de er på samme side, blev det lidt fortolket som:"Nå, det betyder, at vi bør fremme denne situation, hvor alle er på en måde enige med hinanden." Og selvfølgelig er problemet, at tænk på, hvordan det kan kollidere med drivkraften mod mangfoldighed, ikke? Du siger, at du vil bringe forskellige mennesker med på holdet. Jeg antog, fordi de har forskellige synspunkter, så de har forskellige perspektiver, som de kan tilbyde.

Jeg tænker på, hvordan det kommer til at spire op imod, at ideen om at være en holdspiller eller at være på samme side betyder, at man er enige med hinanden, og nu har man hentet nogen, fordi de har et andet perspektiv, men de føles som deres perspektiv bliver forstummet, eller at de på en eller anden måde ikke er en god holdspiller, hvis de udtrykker den uenighed, som formodes at være ret dårlig. Så jeg kunne virkelig godt lide hans slags perspektiv på arten af ​​dets tilblivelse.

Og så den anden, som jeg vil sige, er, at en af ​​de ting, vi ikke er klar over, er, at den måde, hvorpå vi inden for et team, især fra en lederposition, kan skabe en slags situation, hvor vi alle er af at blive drevet ind i den bekræftende stil eller den der ekko-kammeragtige stil, simpelthen fordi vi faktisk er gruppen med vores egen overbevisning, ikke? Så du kan tænke på forskellen, og dette er noget, som folk ikke engang er klar over, at de gør. De har en intention om at have en sund diskussion, og alligevel inficerer de på en måde processen, fordi de ikke er klar over, at det at gøre ting som for eksempel bare at tilbyde din tro først, når du er i en lederstilling, faktisk vil forårsage andre mennesker for nu at ræsonnere hen imod, hvad din tro er.

Så hvis du for eksempel har fire forskellige personer, der interviewer en jobkandidat, og så mødes I alle sammen i et lokale for at diskutere det, vil alle på en måde påvirke hinanden, og det bliver ikke lige så produktivt, og det udtalelserne vil ikke være lige så højtroværdige, hvis du rent faktisk tillader hver person at skrive en rapport uafhængigt, før du ser, hvad de andre mennesker synes. For der er ligesom denne krydskontaminering, der opstår, så det er den anden ting, som du skal passe på, og det er på, at hensigten faktisk er at give mulighed for uenighed. Du kan på en måde dræbe uenigheden uden overhovedet at vide, at du gør det.

Steve: Ret. Jeg synes, det er ret interessant, ideen om ... Vi kæmper i vores landbrugsarbejde på en måde, "Okay. Vi vil gerne være på linje, ikke?" Men jeg tænker også på ideen om sund debat, og jeg tænker, at vi omformulerer den, da vi bliver enige om, at vi alle vil gå stærkt ind for vores holdninger, og det er okay, og det er ikke fokus altid at være perfekt i aftale. Det er lidt en interessant måde at se det på. Jeg spekulerer på, hvor mange virksomheder der rent faktisk tænker så meget over beslutningstagning, som du gør. Hvad er din holdning, når du er derude og interagerer med disse virksomheder?

Annie: Ja måske. Det gør Bridgewater helt sikkert, ikke?

Steve: Ja.

Annie: De læser bare principper, så du kan se den slags tilgang til steroider.

Steve: Ja. Jeg læste nogle af hans ting (Ray Dalio).

Annie: Ja.

Steve: Ja. Han er derude og tænker over det her.

Annie: Ja. Så jeg mener se. Jeg tror, ​​at næsten enhver virksomhed tænker på beslutningstagning. Det er bare spørgsmålet om, hvorvidt de tænker på det fra en måde, der er informeret af videnskaben, ikke? Så som et eksempel, de fleste virksomheder, som jeg arbejder med, når de beder mig om at komme og arbejde med dem på for eksempel en strategisk plan, og jeg begynder at arbejde med dem om, hvad de mulige resultater er, ikke? Så vi finder ud af … Det er en slags scenarieplanlægning, ikke? Her er de mulige resultater fra beslutning A, her er de mulige resultater fra beslutning B. Det er klart, at disse kan være overlappende.

Og så stiller jeg dem dette spørgsmål:"Okay. Så lad os begynde at sætte sandsynligheder på resultaterne." Og de fleste mennesker, jeg arbejder med, siger:"Hvad? Nej, det kan jeg ikke." Og jeg tænker:"Nå, hvorfor er vi enige? Kan vi blive enige om, at der er en form for sandsynlighed for hvert af disse udfald?" Og svaret er, at de er bange for, at de tager fejl. Med andre ord, hvad de siger er:"Der er ingen måde for mig at vide med sikkerhed, hvad sandsynligheden for, at denne ting sker i fremtiden," og derfor misligholder de, "Jeg nægter at give dig en."

Så når du først ser, at det, du ser, er ja, er de forpligtet til at træffe beslutninger, men med hensyn til processen ved de faktisk ikke, hvordan de kommer til den rigtige proces, fordi de ikke forstår, at hele pointen er, at at gætte på, hvad sandsynligheden for, at noget sker, er bedre end slet ikke at gætte nummer et. Så selvom alt, hvad du kan sige, er, at dette særlige scenarie, der kan forekomme, vil ske 30% og 70% af tiden. De har det sådan som:"Åh, det vil jeg ikke sige, fordi det ikke er et rigtigt svar." Fordi de ikke tænker rigtigt over det.

Men det, jeg siger til dem, er:"Det er bedre end at lade som om, der overhovedet ikke er nogen sandsynlighed for det og bare lade det stå i mørket," nummer et. Nummer to er, at du ved mere om dette, end nogen anden gør, så dit gæt bliver bedre end nogen andens, og det faktum, du gætter, vil allerede være godt. Og nummer tre er, at bare processen med at forsøge at tildele en sandsynlighed eller en sandsynlighed til et bestemt scenarie faktisk får dig til på en reel måde, når jeg går tilbage til den oprindelige takeaway for virkelig at omfavne usikkerheden, og usikkerheden kommer fra to steder , ikke?

Den ene er fra held. Så når du tænker på sandsynligheden for, at et resultat indtræffer, skal du anerkende held-elementet, ikke? Du skal begynde at tænke på, "Jamen, hvad er de ting efter beslutningen, som jeg ikke har kontrol over, som kan have indflydelse på, hvordan det kan blive?"

Steve: Det er tilbage til den usikkerhed, ikke? Bortset fra at usikkerhed er derude.

Annie: Ret. Nemlig. Og så er den anden form for usikkerhed skjult information. Hvad er ting, jeg ikke ved? Og for at lave et godt skøn over, hvor sandsynligt det er, at noget vil vise sig, skal du også tænke på, hvad der er den information, jeg har, der informerer forudsigelsen, som informerer prognosen. Og det gør, at du faktisk bliver meget informationssulten. Hvis du tænker på, "Nå, vores bedste gæt er mellem 70 % og 30 %," får det dig faktisk til at begynde at spørge dig selv:"Nå, hvordan kan jeg indsnævre det interval? Hvad er det, jeg kunne finde ud af? Hvilken information kan jeg muligvis opdage, der kan få mig til at indsnævre det en lille smule, fordi jo mere jeg kan indsnævre det, jo bedre har jeg det?”

Så det, jeg ville sige, er, at jeg tror, ​​at i det abstrakte tror jeg ikke, at du vil finde nogen, der ikke er sådan, "Ja, jeg driver denne forretning." Jeg tænker meget på beslutningstagning. Men jeg tror, ​​at det for de fleste mennesker ikke er specielt informeret af videnskaben, det er ikke specielt informeret af reel sandsynlighedstænkning ved at bygge den slags træer ud, ved virkelig at kortlægge fremtiden på en reel måde, det tror jeg, at de fleste af dem gør. beslutninger, hvor de forsøger at få konsensus i rummet, nummer et. Så de synes, det er rigtig vigtigt. Vi skal få konsensus, og så skal vi lande på én mulighed.
Og når vi har gjort det, skal vi være sikre på det, og jeg tror, ​​det er sådan, de fleste menneskers proces ser ud.

Steve: Ja, og jeg har så mange kommentarer. Men nogle hurtige tanker. Den ene er, jeg tror, ​​at så meget af vores uddannelse handler om, hvordan man tænker kritisk, hvilket er vigtigt, ikke? Og også, jeg var ingeniør, ikke? Hvordan løser man problemer og bygger ting i forhold til at tænke på, hvordan træffer man en beslutning? Og når du ser på dit liv, ikke? Resultatet af dit liv er summen af ​​de beslutninger, du har truffet, og om de lykkedes eller ej, ikke? Held og usikkerhed del af det.

Tilbage til poker, som jo mere jeg hører dig tale om det, tror jeg, at det har så mange lektioner til beslutningstagning omkring det begreb om form for risiko/belønning, ikke? Så hver gang du træffer en beslutning i poker, tænker du:"Okay, hvor meget risikerer jeg?" Ret? "Hvor mange penge lægger jeg i puljen? Hvad er mit potentielle plus?” Ret? "Hvor stor er potten?" Og er det det værd, især med Texas Hold'em, kender mange af vores lyttere måske ikke til det, men som udgangspunkt betaler du efterhånden for at få mere information, fordi der er kort, der vendes, når spillet spilles. Så du er nødt til at beslutte dig for, om du satser, ringer du efterhånden for at få yderligere information.

Og den idé oversættes perfekt til forretning. Der er dette koncept kaldet lean startup, hvor du i det væsentlige forsøger at lære så hurtigt som du kan, så billigt som du kan. Du kommer med en hypotese, du bygger disse MVP'er. Minimum levedygtige produkter for at teste dine ideer, så du prøver at bruge så lidt som muligt og se, hvad der sker. Du ville køre et eksperiment og se, hvad der sker. Det ligner, men når du gør det, når du opretter det ideelt, tænker du også på:"Hey, hvad er den potentielle fordel ved det her virker? Hvad koster det at køre dette eksperiment?”

Jeg mener, at mange startups ude i Silicon Valley driver dette, og jeg tror, ​​at flere og flere nye virksomheder gør det. Men ser du din virksomhed som en slags omfavnelse af den tilgang?

Annie: Så nogle af dem ja. Nogle af de mennesker, som jeg arbejder med, er i agil udvikling, hvilket åbenbart er præcis den type tankegang. Så igen afhænger det bare af virksomheden. Nogle af dem er. Men jeg tror, ​​at det, der er vigtigt, er selv med en virksomhed, der ikke er en slank startup, der stadig tænker på verden på den måde, at du kan lave disse små tests, disse små stik efter information, og bruge det, du ikke nødt til nødvendigvis at nøjes med præcis én strategi, ikke? At du kan lave den slags meget små AB-tests og bare begynde at finde rundt for at se, hvad der virker, og se hvad der ikke gør.

Igen, og jeg tror, ​​at det har at gøre med, om du nærmer dig verden som en, der siger, at jeg skal være epistemisk åben, ikke? Ligesom jeg ikke behøver at føle, at jeg har brug for at vide med sikkerhed, at der er alle mulige forskellige måder, hvorpå dette kunne fungere, og jeg har andre, der er åben for at prøve og se, hvilke ting jeg vil teste i modsætning til at beslutte mig for det rigtige svar.

Steve: Okay, hvad er vores bias, ikke? Vi vil gerne være-

Annie: Hvilket er denne meget anderledes måde.

Steve: Ret. Jeg tror meget ofte, især folk, der leder virksomheder, de er vant til at træffe hurtige beslutninger, og de har en slags "mavefornemmelse" for, hvad det rigtige svar er, som de bringer til bordet.

Annie: Til højre.

Steve: Og de vil hurtigt komme til den konklusion og sandsynligvis påvirke alle andre, der er med til at tage den beslutning, til at sige:"Okay. Her er det rigtige …”

Annie: Ja. Jeg mener, det går tilbage til den slags smitteproblem, ikke? Når nogen kommer ind og siger:"Her er, hvad jeg synes, vi skal gøre. Dette er min overbevisning. Jeg føler meget stærkt, at dette er det rigtige svar.” Held og lykke med at have nogen i det rum, der virkelig udfordrer dig på nogen måde, og ikke nødvendigvis at de ikke vil gøre det med vilje. De er ligesom, "Wow, denne person har en masse erfaring, og de tror virkelig på dette. Så hvad end jeg troede, må være forkert." Jeg mener, det er bare en naturlig måde at tænke det på, og meget ofte prøver jeg at bede folk om at afprøve det her i deres eget liv på små måder, så de kan se, hvor svært det er at udføre det her. på denne anti-smitte måde.

Og du kan fortælle mig, om dette ringer for dig. Når nogen læser en meningsindlæg om politik for eksempel, hvor ofte hører du dem sige, "Jeg læser denne meningsindlæg i politik. Vil du læse den?” Som bogstaveligt talt slutningen af ​​sætningen. Eller siger de:"Jeg læste denne udtalelse. Jeg tænkte dette, dette, dette og dette. Vil du også læse den og så fortælle mig, hvad du synes?” Og selvfølgelig er det sidstnævnte. Det er sådan, vi kommunikerer til hinanden, og jeg tror, ​​at en del af det er, at vi føler, at vores mening eller vores overbevisning er de ting, vi har bemærket, er vigtige data, som jeg kan kommunikere til dig, før jeg får din mening tilbage.
Jeg tror ikke, at vi gør det på en måde, der er dårligt ment.

Steve: Det er ubevidst.

Annie: Jeg tror, ​​at vi virkelig tror på det … rigtigt. Det er vigtige data. Som:"Nå, jeg har tanker om det, så lad mig kommunikere dem, fordi det er vigtigt for Steve at vide det, før han giver mig nogen råd tilbage."

Steve: Ja måske. Og jeg vil sige, at selv det faktum, at du overhovedet præsenterer noget, er du sikkert allerede underlagt din egen bekræftelsesbias som:"Åh, jeg så denne artikel, som styrker det, jeg tror på, og hvad synes du om det? ” Jeg mener, at du ikke siger, at det ligesom forstærkede det, du tror, ​​men blot ved at præsentere det.

Annie: Nemlig. Men jeg vil gøre det meget bedre, hvis jeg siger:"Hej, jeg har læst denne meningsindlæg. Jeg kan godt lide at vide, hvad du synes. Vil du venligst læse den?” Og bogstaveligt talt giver jeg dig ingen anden information, og jeg udfordrer folk til at prøve at begynde at interagere med folk på denne måde, og de er overraskede over, hvor svært det er, hvor ofte de er nødt til at tilbageholde deres egen mening, det er virkelig svært at holde det inde. Og den anden ting, jeg tror, ​​det er ikke kun, at du føler, at det er vigtige data. Men jeg tror, ​​at du er lidt bange for, hvad hvis personen tror, ​​jeg er enig i det, når jeg ikke gør det? Eller hvad hvis personen tror, ​​at jeg ikke er enig i det, når jeg gør det, og at det på en eller anden måde ville være dårligt? Personen vil få en forkert opfattelse af dig.

Eller de tænker måske anderledes om dig, og det føles på en måde, som om du åbner dig selv op for et angreb på din identitet på den måde i modsætning til bare at sige:"Jeg præsenterer det virkelig for dig på en neutral måde fordi jeg virkelig gerne vil have feedback tilbage fra dig, og det er irrelevant, om jeg er enig i det eller ej. Og prøv ikke at gætte det.”

Steve: Ja. Det får mig til at tænke på én ting.
Jeg er en engelinvestor i dette firma, der hedder Cloverpop. Hele deres idé er at forsøge at forbedre beslutningstagningen. Jeg er interesseret i dette. Jeg tror, ​​det er et område med muligheder i vores økonomi, hvor der er alle disse investeringer omkring; hvordan eksekverer vi bedre, hvordan sporer vi tingene bedre, men der er ikke megen teknologiaktivering omkring, hvordan man træffer beslutninger bedre. Jeg tror, ​​at en af ​​de ting, de gør, er, at de faktisk blinder af, hvem der kommer med et forslag. Så du kan have en gruppe mennesker, der siger:"Hey, vi kender dette problem rigtig godt, vi er alle interesserede i at løse det". Og lad den administrerende direktør præsentere sin stilling, CMO og dah, dah, dah. Så var du informationen kommer fra, ikke?

Og da vi lige var ved, om de også præsenterer deres mening om det, så skæmmer det alle, men hvis du kommer og siger:"Jeg ved ikke, hvem der præsenterer det." Og ideelt set er det, du siger, at de bare siger, bede om hensyn tilbage. Forhåbentlig vil du få bedre resultater.
Men jeg tror næsten, du skal have andre … Det er så svært for os at bekæmpe vores fordomme hele tiden. At gøre det gennem værktøjer kan hjælpe. Jeg prøver ikke at sidde her og pumpe dem op, men jeg synes bare, det er et interessant område.

Annie: Åh, jeg er enig. Ja. Nej jeg er helt enig. I mean this is what I say, like, I tell people to try this exercise just in everyday conversation and people just fall apart to that. It’s so hard. And, I mean, I love the idea of what you just said because one of the things that I talk about in the book, is how do you implement these scientific norms, like norms for scientific communication into the way that you’re interacting with other people in terms of not just sort of making decisions, prospectively, but deconstructing decisions retrospectively? Both have their own challenges.

There is a wonderful acronym, which is CUDOS. Which was put forward by Robert Murton and he was really talking about norms for scientific communication. CUDOS stands for … The C is communism, obviously not the political kind, it’s that data should be treated communally within the team trying to decide about it. That doesn’t mean I’m supposed to share my data with another company, obviously, but within a team data needs to be communal.

And then the U is basically what you just talked about, which is universalism, which is that the message and messenger should not be equated.

So, obviously there are certain times when you need to know things about the messenger, for example, their level of expertise in something helps you decide whether the information that they’re presenting, it helps you put a probability on whether it’s true or not right? So, if there’s an expert, if I know that you are somebody who’s an expert on East Asia for example, I’m going to trust what you tell me about the population among better than somebody who knows nothing about that.

So, in that case there are certain features that might be important, but outside of that kind of thing the fact is that there are things that are true no matter who says them, and very often we will trust or distrust the information based on our trust or distrust for the person.

So, the thing I say is, like, the Earth is round whether it’s Mussolini, or your mother, or your best friend telling you that right? Or your worst enemy telling you that. The Earth is round none the fact, nonetheless. So, things have trust to them regardless of who the deliverer is, and this is actually really important because otherwise what can happen is that not only on a global sense information can be distorted in a political way depending on who the deliverer is, and I think we see this a lot in these sort of claims now about fake news, and the way that people interpret information if they’re coming from one part or the other depending on who they agree with in a way that’s actually very destructive, but then also you have to think about that in your own life right?

So, when you’re talking about Cloverpop what they’re trying to do is actually implement universalism, they’re to implement that norm of universalism, which is to blind whether it’s a CMO, or the CEO, or an intern who is offering it up so that you can evaluate the information independent of the person who has delivered it.

Just really quickly, D is disinterestedness. So, you want to eliminate conflicts of interest.

And then the OS in CUDOS is objective skepticism, which to sum that up really quickly; approach the world asking “Why am I wrong?” rather than “Why am I right?”.

So, I didn’t want to just leave people hanging as to what the rest of the acronym meant.

Steve: That’s great. Yeah, that’s actually the first time I’ve heard that acronym. So, this is Robert K. Merton right? He was the sociologist?

Annie: Exactly.

Steve: We had his son Robert C. Merton on the podcast.

Annie: Oh!

Steve: He was a Nobel Prize winner in economics.

Annie: That’s amazing. Yeah.

Steve: Yeah, small world.

Annie: Ja. But that’s wonderful. I’m a very big fan of his fathers, and him as well by the way.

Steve: Ret. And just a side note, Robert C. Murton is also a poker player. Apparently he plays in a game in Boston. I was going to ask him about it, and then he was like, “I don’t want to talk about that on the podcast.” I didn’t get a chance to ask him, but I think you find that with a lot of math oriented and kind of analytical people, many of them do play poker and they probably take useful lessons from it that they apply in all kinds of places.

Wow. So, yeah, it’s amazing listening to you talk about decision making, and just for audience right? Making good decisions, being thoughtful about, or aware of all of the biases that we carry in and how that affects our thinking and our behavior, which ultimately affects the outcomes. You know, that’s how hopefully this discussion is useful to you.

Alright. So, a couple of … You know, back to poker a little bit just since its got lessons for us, one of the topics you talk about is, and we touched on it a little bit earlier, but this concept of resulting. Can you elaborate on that a little bit? I think it would be helpful for folks to understand that.

Annie: Yeah, for sure.
So, I just alluded to we can think about how are you thinking about decisions prospectively and also retrospectively right? So, you know, prospectively as in making a decision, and trying to scenario plan, map out the future, figure out what the probabilities of those futures might be. So on and so forth.

But the retrospective problem is trying to figure out what you’re supposed to learn from your own experiences because presumably you should have some sort of feedback loop where the feedback that you get is looping back in so that you can be better at decision making going forward, and so on and so forth. But, what the requires is that we be taking good lessons from the result of our lives, and this is where uncertainty can wreak a lot of havoc.

So, out in the world, in life, and in poker, the connection between the quality of an outcome, and the quality of the decision that leads to that outcome is very loose on one trial. Now, certainly you can run a Monte Carlo and get 10,000 trials of anything where it’s the same decision and you’re just seeing what outcomes happen to fall in some sort of simulation, or you could flip a coin 10,000 times, now you can start to see something from outcomes, but on a given outcome or a small number of outcome where the sample size is very small there is an incredibly loose connection.

So, to sort of get there let’s think about the difference between chess, and then poker, and then a really simple life decision. So, in chess, you can see how decision quality and outcome quality are incredibly tightly linked. So, if I lose a game of chess to you, what do we know about my decision making relative to yours?

Steve: That hopefully I understand, or process the information a little bit better than you did since we all have the same information available to us.

Annie: Ret. Exactly. So, if I lose a game of chess to you it’s because I played worse than you did, and it’s a completely reasonable thing to work backwards from the fact that we know what the quality of my outcome was; it was bad, it was negative, I lost; to figure out what the quality of my decision was and determine that that was also negative, and it was bad, and I didn’t do as well in comparison to you.

And the reason that that’s the case, that we can do that in chess is that you’re eliminating these two sources of uncertainty, so there isn’t a strong element of luck. So, in other words, the pieces stay where they are until someone moves them because of an act of skill right? Not because somebody rolls the dice and now your pieces just randomly move around or something.

So, we’ve eliminated the strong influence of luck, and then we’ve also eliminated most of the hidden information in a sense that you can see my position, I can see your position, so there’s no information asymmetry there, and what that means is that when I’m looking at your board I could theoretically figure out every possible move that you could make in response to any moves that I make.

So, what that means is when you’re reducing the really strong influence of uncertainty in that game, what that means is that outcome quality and decision quality become very tightly correlated.

Now, you can think about a game like poker in contrast. If I lose a single hand of poker to you what do we know about my decision making in comparison to yours?

Steve: Not a lot because there’s a big element of luck in each hand right? But if you win the tournament it’s saying a lot more right? So, if you make a series of decisions really well then you have a much higher chance of winning the whole thing. Is that true?

Annie: Ja. So, if I lose a hand to you we know almost nothing about the quality of my decisions based only on the results right? Now, obviously, if I lost the play, if I can dig into the process I’d know more, but all you can see is the result, we don’t really know very much about my decisions relative to yours.

Even after the end of a particular tournament we don’t know that much. We know more because you had to play more hands, but in order to start to get some kind of clear idea of somebody where you can see what the decision quality is sort of starting to shine through you need to see, you know, 1,000 to 1,500 hours out of a poker player and then you can start to really, really see it.

You know, you can see it after a month you’re narrowing it down as you go along as you add hours in right? But in order for the skill element to really start showing through you need a lot of hours of play. So, that’s assuming you’re at a live game where you’re getting 30 hands an hour or something like that.

And the reason for that, again, there’s this luck element right? I can’t control the cards that are yet to come so the deal is random, and then there’s also now we have this information asymmetry right? I can’t see your cards and so I’m guessing at them. So, that’s what creates this disconnection between outcome quality and decision quality.

Now, we can say is life more like chess or poker? That’s sort of the question, and let’s take a really simple example like driving through a traffic light. Well, you can see more quickly that life is more like poker than chess because if all I know is that you went through an intersection and you got in an accident in that intersection, that’s the only thing I know is that there was an accident that occurred, do I know a lot about the quality of your driving?

Steve: No, because someone else could have made a mistake versus you.

Annie: Exactly. Ret. So, now that immediately we can see, “Aha. Okay. So, this is more like poker than chess.”

So, now here’s where the resulting problem comes in. We took a long winding road down to resulting. Going back to that first point I made, people really aren’t comfortable with uncertainty, they don’t like the fact that you can’t really see into the decision quality right? So, it’s like after the fact and you’re trying to figure out if a decision is good when you had no way to observe the process, and so that’s pretty opaque to you, but you want to know, and so you use this shortcut which is called resulting, which is saying “Well, I know the quality of the outcome so therefore I must know the quality of the decision.”

So, if I know that the outcome was bad I can derive that the decision making must have been bad. Now, again, this is completely reasonable in chess, but it’s completely unreasonable if you’re playing poker. So, if life is more like poker we know it’s a relatively unreasonable thing to be doing in life.

So, the example that I open the book with, which I think it’s one of the most powerful examples of resulting that I’ve seen is the 2015 Super Bowl. Pete Carroll, coach of the Seahawks, the Seahawks are on the 1 yard line of the Patriots, and there’s 26 seconds left in the whole game. The Seahawks had one time out, and obviously they need to advance the ball 1 yard in order to score. They’re down by 4 so a field goal will not do the trick right? So, they must score a touchdown at that play.
So, as you’ll recall, Pete Carroll called a particular play that was pretty unexpected.

Steve: That’s right. He called a pass play. I was going to say, and he had Marshawn Lynch as a running back, who is a really good short yardage carrier.

Annie: Lige præcis. So, exactly to that point. So, he’s got Marshawn Lynch, everybody is expecting he’s going to hand the ball off to Marshawn Lynch, Marshawn Lynch will just try to barrel through, and that’s obviously what he’s going to do, and with his one time out he’ll be able to try that twice.
And instead he calls a pass play as you said and it ended in spectacularly bad fashion. Malcolm Butler intercepted the ball and that was the end of the game.

And the end game calling from Cris Collinsworth is incredibly brutal. You know, “I can’t believe this call. This is a crazy call.” So on and so forth. And then the next day, even after people had time to think about it, most people were echoing Cris Collinsworth, and there seemed to be an argument among the major outlets about whether it was the worst play in Superbowl history or the worst play in all of football history, which seems pretty … You know.

Steve: Pretty brutal.

Annie: Pretty brutal.
So, I think this is a really good example of resulting because you can see this very clearly that what people are seeing is that this result was spectacularly bad, and so therefore they are going back in and deriving that the decision quality must have been pretty bad, but we can actually get to the heart of the people by I can just ask you this thought experiment.

So, Steve, let’s imagine that Pete Carroll passed the ball and it was caught for a touchdown in the end zone. What do you suppose the headlines would have looked like the next day?

Steve: He’s a very creative genius for running that play. That was completely unexpected.

Annie: That’s exactly right, and in fact, for those people who are football fans, what did they say about Doug Peterson when he ran the Philly Special which resulted in a touchdown?

Steve: Ja. Exactly. Super clever right? Unexpected.

Annie: Super clever. Out Belichicked Belichick.

Steve: Yep.

Annie: Exactly.
And you can kind of see what’s happening here right? Remember, I said this problem is we can’t see through to what the decision quality is and so we use this shortcut. So, you can kind of see people feel like they know whether the hand off to Marshawn Lynch is good or not. They feel like they know something about that decision process. They feel like they have access to the quality because it’s a play that’s pretty agreed upon you know? There’s sort of consensus around that this would be a good choice.

So, by choosing something that people really weren’t expecting he’s choosing a play that is not well understood, which means that people don’t really understand whether it’s a good decision or not sort of right? Like, they don’t get it. They don’t know ex-ante.

So, now what happens is that because that’s opaque, because the decision is not understood, because there isn’t consensus around it, how do you then figure out if the decision is good? Oh, you use this shortcut called resulting. The result was really bad, so therefore I know that the decision must have been really bad.
Now, one little factoid, the probability of an interception in that particular situation was between 1 and 2%. So, the minute you kind of know that fact it feels like, well, how could you possibly say that was the worst call in Superbowl history? It was only going to turn out the way that it did less than 2% of the time.
So, I mean, that right there reveals sort of the obscurity of the whole bias.

Steve: Ja. It would be interesting if you kind of put football analysts into cohorts, or football fans into cohorts of people who are real, I don’t want to say real, but like in poker you see this right? You’ve got amateurs doing things that are crazy, and then you have people that play a lot of poker and they analyze this and they’ll call him a donkey, or say this guy is doing all of this kind of crazy stuff and that’s why he’s a bad player is because he doesn’t know any better, and giving color commentary on the result because they’re not behaving, quote/unquote, “rationally”.

But, in this case I bet Pete Carroll, and I think you mentioned this in your book right? Later on he was being thoughtful about it. He was trying to out play his opponent right? He was trying to do something unexpected on purpose to try and win. And as you said, his odds were totally in his favor because it was very unlikely that it would get intercepted and he just kind of got, quote/unquote, “unlucky” in that one case.

Annie: Ret. Exactly. And you can actually ask yourself what was he getting in return for the cost of an interception? And what he was getting in return was an extra play. But, you know, there was a clock management problem. He had 26 seconds left in the game with only one timeout. As you know, if you hand it off to Marshawn Lynch and he fails to get into the end zone a lot of time has rolled off the clock, so once you’ve done that you’ve actually only got one play left, whereas if you execute on the pass play … You know, this is where it’s really important to think about the three outcomes that would a running play.

So, not including a sack, or Russell Wilson fumbling the ball or anything like that. So, let’s just put those in the all things being equal category and think about the three outcomes of the pass itself which are it’s caught for a touchdown, okay, so they win the game. It’s intercepted right? That’s going to happen 1 to 2% of the time, but the third outcome is the ball is incomplete, and when the ball is incomplete of course the clock stops on its own, you don’t use a timeout for that, and that play gets executed really quickly.

So, very little time comes off the clock and because you still have that one timeout left you can. So, remember they have three downs. It’s second, third, and fourth down to execute on it. So, he was actually maximizing the number of plays, the number of chances that he would have at the end zone with this particular choice, and in exchange it was costing him that 1 to 2% chance of an interception.

Steve: Yeah, that was the risk. Ret. You know what would be really interesting is has anyone talked to Bill Belichick about how he thought about it? I wonder if he was like, “Oh, okay. They have 26 seconds left. Maybe they are going to run a passing play because they want to do clock management and it’s likely to be a slant because I’ve seen their,” whatever, and I appreciate all of the color on that decision in football.
You know, as you were talking about poker and chess we know that AI is really good at and now pretty much can’t be beaten with chess and also with Go, where you also have information, perfect information. Is anybody working on AI for poker?

Annie: Oh yeah. So, it’s getting better at poker. So, there’s an AI that is very, very good at a particular form of poker, which is Heads up poker. So, it’s just one on one. So, obviously that reduces the set of possibilities right? Because I’m just playing against one person, and in particular it’s a form of poker where both players are likely to be playing almost every hand that they’re dealt.

But, this is a relatively recent development, but it’s now very good at that. It seems to really beat the best players in the world at that, and then we’ll see whether it can expand to, you know, how well it expands to a multiplayer situation, but it is getting better, but it’s solving a different problem right?

So, when you look at, for example, these Backgammon computers they can really just brute force the game right? Again, because you don’t have the hidden information, and this is true with chess as well, you can just play out every possibility until the end. So, once you have enough computing power you can solve the game so there’s just this brute force approach to it, which is not something that you can do in poker. You can’t brute force the game. That’s where the difference is, which is there wasn’t really any progress made in poker until you were starting to get machines that were more like deep learning machines.

Steve: Ja. It seems like with poker, I remember we were talking about it, there’s kind of three levels of poker right? You’re playing, at least with Texas Holdem right? You’re playing your cards, just straight up right? And what are the probabilities of you winning in any outcome. And then, you’re playing against what your opponent is likely to have right? And so therefore, then you need the emotional intelligence, and also some math right? And also this kind of, ideally, a history of what they’ve done in the past, which is probably hard for a computer to get right? I mean, if you see the same people in a poker tournament you can kind of study what do they do? How do they behave in certain situations? And that’s the third part right? How is your opponent likely to behave, and that also goes to kind of game theory for yourself, but also for them.

I mean, I think one thing that’s interesting about poker, we’re talking about football, and it’s like, when I play poker, or when people play poker sometimes they’re giving disinformation on purpose right? They’re trying to mislead so you can bluff later, or kind of play a little bit erratically so people can’t quite predict your behavior. I don’t know how that translates to …
I mean, I could see that translating strategically when you’re in business to kind of trying to outthink your opponents in the business arena.

Annie: Well, yeah, I think it actually translates pretty well. I mean, I think this idea that I was talking to about even just thinking about what are the probabilities of different outcomes is something that I find when I’m working with groups that are trying to do strategic planning that they’re just very loathe to do.
You know, I have a narrative in the book about working with a nonprofit just trying to get them to start thinking in expected value about their grant proposal, their grant process, and it was hard. I really had to do some very deep work with them to start getting comfortable with thinking about assigning probabilities to the chances that you get a grant or that you don’t so that you could really understand what the grant is worth because, you know, when you walk around in this world where you’re thinking about things in binary and this is how you’re making your decisions.

You know, when you’re applying for a grant that’s 100,000, and you’re just thinking about it as 0 or 100,000, where obviously if you’re thinking probabilistically and you say, “Well, there’s a 40% chance I’m going to get this grant.” You can now assign a value to it of 40,000, which does all sorts of wonderful things for you right? Certainly it allows you to more efficiently create a work staff. It allows you to really think about when you’re winning to hiring an outside contractor for example. It allows you to be much better at budgeting right? Like, at forecasting what your inflows are going to be right?

I mean, there’s all sorts of really good things that come out of it, but people are very loathe to do even just that step of thinking about, you know, how do I assign probabilities. That’s beyond starting to think about what are the payoffs of it? How do I deal with unknown information in a way that I really think about it? How do I deal with the connection between decision quality and outcome quality? How do I start to try to figure out good process for working back?

And then this sort of basis thing of what you just said, which is; how am I thinking about as a good Bayesian right? Like, what are the base rates? What are people’s natural dependencies? What could I expect them to do in these situations? How could I think about how my actions appear to another person?
So, people also don’t do that as much right? People have this idea, for example, that if you come into a negotiation and you’re speaking very forcefully that you’ll come off as being very forceful, but we know that very often that when people hold a very strong they’re actually less forceful in the way that they present it, and that’s a very, very strong human tendency that you can’t get to unless you think about it from the other side. Unless you think, well, what if you’re watching someone be really forceful in front of you, and if you said to yourself, “Well, wait a minute. If I had a really strong position how would I be acting?” And the answer is I wouldn’t be yelling at everybody telling them this is the final offer right? I mean, just as an example right?

But, you can’t do that until you start to think about how do I look from other people? What is the story that I’m telling? What are their opinions of me? What am I signaling to them with my actions? What are my base rates? How do I incorporate new evidence in order to actually adjust my base rates? These are all kinds of the things that the way poker players are thinking that I think aren’t incorporated into most people’s every day decision making.

Steve: Ret. We’re going to see if this works out for Kavanaugh soon, if his strong position.

Annie: Right.

Steve: I remember I was reading some poker book and it was talking about people that have strong hands tend to kind of act relaxed, sit back, and that’s an indicator that they’re strong, and weak players they’re a little bit more aggressive, or maybe they’re bluffing at it, and very often their actual position is opposite of how they present themselves.

Annie: Ja. I mean, think about it, when was the last time that you sat in a negotiation and you had a really, really strong position in the negotiation and you were red faced, yelling at the people across the table that this was your final offer, take it or leave it?
That’s not the way that somebody who’s in a really strong position behaves. And yet what happens is that when you’re sitting across from someone who behaves in that way, you think there’s a one-to-one mapping, right?

And you’re like, “Oh, they’re behaving in a strong way. They must be really strong.” But if we took a second to step back and say, “Wait a minute, how do humans really behave in this situation?” And the way I can figure out is by thinking about how I would behave in that situation. You get to the truth really quickly.
So we tend to be very reactive. We tend to make snap judgment about what the connection between people’s behavior is, and what their positions actually are in a way that we would be better to start doing some better perspectives making, that would help to actually get to the answer.

Because it seems to obvious once I say it to you, right? When was the last time you had a great position and you were red-faced screaming at somebody that it was your final offer? And of course you’re laughing and saying, “Never.”

Steve: Ja. Right.

Annie: And then you say, “Well, how come you think that that’s the case when they’re doing it to you?” “Oh.”

Steve: Yeah.

Annie: Yeah, right.

Steve: Yeah, never.

Annie: Okay, great. So yeah, but this is the way, this is just human nature, and that’s part of the thing, is that what our gut tells us is often not right, we need to hold our gut up to some sort of rational process, in order to make it accountable to something other than our feeling.

Steve: Yeah, I was just gonna say that … When we were talking here, so much of our life is about trying to make sense of the world, and we try to use these patterns, our brains are good at patterns, right? And pattern recognitions, where … I know you talk about system one and system two, and the emotional side of your brain, and then the more … The limbic system, and then the more rational side, and so much of our life is about trying to bucket things up, put them into … To identify patterns and make it quicker for us to assess things.

But the reality is, we live in a much more complex world, and we need to be much more rational about it. But it’s so hard, because we’re constantly fighting against the desire for our brains to make these snap decisions out of system one, and get the conclusion, right?

Annie: Well yeah, and if you think about it, it’s of course, right? Because if you were to make every single decision on system two, building out some probabilistic decision-tree, you’d never get out the front door in the morning, it would take too long. And the fact is that, most of our brain is this very big, ancient animal brain, and then we have this very thin layer of prefrontal cortex, that is trying to take up this more executive functioning, rational thought.

There isn’t a lot of it. And I talk pretty early in the book, but this is something that Michael Shermer has talked about, that we just have this default toward certain types of thinking, because when evolution was selecting features, it wasn’t necessarily selecting for accuracy, but rather efficiency. So you can think about this pretty simply. For example, we have a bias toward false-positives.

So I’m on this savanna and there’s rustling in the grass; evolution isn’t selecting for the human that now builds out a probabilistic decision-tree, about whether that is a lion. Because that human is dead too much of the time. So instead, it selects for the human who runs away. And sometimes that human is wrong, but it doesn’t matter, because 100% of the humans who’ve run away, have lived, right?

So the wrong ones and the right ones have lived, and who cares? So you have this strong bias toward false-positives, rather than false-negatives, right? So that’s just how it is, and it’s part of the reason why I said right at the beginning, that one of the things is, “Don’t try this at home, folks. Go get some other people to help you with this, because … I have only a little bit of prefrontal cortex, but you also have a little bit of it, and somebody else has a little bit of it, and if we get together, we can get more of that executive functioning stuff working for us.”

Steve: Ret. You’re making me think about … I was listening to Elon Musk on the Joe Rogan podcast, the one where he smokes pot on it, but before all that, I had this really interesting discussion about AI, and how the fact that we’re actually … Companies are actually cybernetic organisms if you will, they’re a bunch of people but also enhanced by technology and we ourselves, with our devices that we’re carrying around, are becoming almost like enhanced … And we are enhanced, essentially, right? Because we can talk to these things, and it can look up any information pretty much immediately, which is amazing.

And you do see … I can see this happening, faster than people think, because take navigation, right? So you can talk in your phone and say, “Hey, I wanna go from here to whatever. Los Angeles, on public transportation. What’s the fastest way?” And it will look at … It does a couple things, right? It finds the different routes that you can take; I mean, you can fly there, you can take a bus, you could drive, whatever, and it’ll solve for that. It’ll also solve for what’s happening right now. So you’re gonna drive, what the traffic patterns are today, and also what they’re predicted to do.

That’s what’s interesting. Google just rolled out, “Tell me when you’re going to drive from here to San Francisco.” And it’ll say, “Oh, the anticipated drive time is, is three hours, versus four hours, versus five hours.” It’s just amazing, right? And you could start to see this with maybe … Based on this conversation, I believe we need help making decisions, and a lot of this stuff may have to be built into computers to get more positive or more optimal outcomes.
At least help us get to more optimal outcomes, to manage against all these system one biases and beliefs that we carry around, that’s baggage, if you will.

Annie: Ja ja. Exactly. Jeg er enig. That all happened … Obviously before I decided to. I have no problem with I just thought, given that people were questioning Elon Musk’s judgment, that maybe that wasn’t the best-

Steve: The best example? Ja. Well, he did make … That Tweet he sent looks like it’s gonna cost him $20 million bucks and the company $20 million bucks, plus he lost the Chairmanship.

Annie: Right, yeah.

Steve: Maybe he should be using some AI-enhanced decision for filtering when he sends his Tweets out.

Annie: Yeah I actually just had a discussion on a podcast just very briefly about that, and I think that it sounds like he doesn’t sleep very much, and lack of sleep really has a very deep effect on your judgment. There’s all sorts of ways in which … There’s a lot of research being done, in terms of essentially what happens to your … In terms of increased cognitive load, and what is the equivalent to, in terms of drops in IQ points, for example. So work done in scarcity, where people feel like their resources are not enough for their needs, for example, what happens to their ability to think well, their cognitive capabilities, and it looks like it’s equivalent to about a 13 point IQ drop, which is pretty shocking.

But that also the same as what you get if you miss a night’s sleep. So missing a night’s sleep really reduces your ability to think clearly. I think all of these things are actually really interesting to look at. There’s a great book called Scarcity, actually, that I think is a really great book to read, where you can really see what the cognitive costs of poverty are.

And you also get some of these same effects, for example, if you’re feeling excluded from friend group; that’s another way to end up getting the same effects. So anyway, when we were talking about Elon Musk and what’s happening, it sounds like he’s having some sleep issues, so that makes part of the explanation for what’s going on, yeah.

Steve: Yeah, what is the average IQ? Is it 130 or something like that?

Annie: The average IQ, by definition, is 100.

Steve: Is 100, right. Okay, fine. So if you’re talking-

Annie: That’s definitional.

Steve: So, if you’re taking a 13 point drop, that’s more than 10% loss in your cognitive ability. That’s pretty significant.

Annie: Ja. It’s really huge. When people are stressed, because they feel like their resources cannot meet their needs. And this can be in a relative sense, by the way, this doesn’t mean that you’re living in poverty in an absolute sense. What was interesting is that it’s relative. If you live in a place where people are quite wealthy, and say you’re having trouble paying your mortgage, even though in an absolute sense, you might have quite a bit of money relative to the world, in a relative sense, you do not.

And that seems to be what the trigger is, and that’s outside of, obviously, the other effects of living in actual poverty that you can measure in an absolute sense, relative to anybody in the world. But I think it’s really important for us to think about that, because when we’re talking about … Obviously in order to dig yourself out of poverty, part of what goes along with that is having the … Basically being able to envision what the future is gonna look like for you, identifying what your goals are, and then figuring out how to execute on them.

But what we’re finding is that there’s so much cognitive load placed on you, by being in scarcity itself, that it essentially short-circuits a lot of that ability, and you end up making much more short-term decisions all the time. So there’s some very interesting work in this space, in terms of what it’s doing to people’s ability to think, and how much it reduces people’s ability to actually realize what their own potential is.

Steve: It’s hamstringing us. Well, good, you’re supporting the thesis behind this business, which is we’re trying to help people get control over their future, right? So, feel financially secure, so that they can make the most of their human capital. And this is what I saw with my own mother, where she was freaking out about money, and we’re like, “Okay, let’s try to solve that problem.”

And then once that was addressed, and you’re like, “Okay, I have a sense of stability. I’ve got some money in the bank, I have enough income in my life to pay for my life, so I’m not gonna go broke.” Which is the number one financial worry that everybody has. “Will I run out of money and end up being destitute?”
Once that was taken care of, it created the cognitive space to be like, “Okay, what do I want to do in my life? What could I do, and what’s most interesting to me?” Which, I think then leads you to do hopefully much better work with your life, right? Use your human capital in the best way possible.

Annie: Yeah, and we think about that, from a societal standpoint, right? When we look at this cyclical effect of poverty, when you really understand scarcity, you can start to see where some of that is coming from, right? Same thing with your mother, right? There’s all these different ways in which just having those worries about what are your resources, and are my resources enough to meet my needs?
What that does to your ability to start thinking about the other things in your life, because it just ends up taking up your whole brain capacity. So, from a societal level, how are you addressing that?

Steve: Ja. I think we talked about this a little bit before, but there’s this movement called FIRE, right? Financial Independence, Retirement Early. It’s mostly FI, Financial Independence, and especially being embraced by millennials, where they’re really trying to live much more frugally. And it’s really a mindset thing. So I was just at this ThinkCon Conference, and I saw a panel where they had four FIRE people, and you see people like, “Well, I’m feeding my family of four for $25 or $30,000 a year, and we live a pretty good life.”

I think what they’re doing is … I know what they’re doing, is they’re saying, “Hey, look. I can live more efficiently, and I also wanna reframe how I look at my life very differently, so that I am coming from this place of abundance, and not being driven by what my neighbors had.”

And one of these guys who talked, Mr. Money Mustache, was like the … He’s one of the founding guys that does this, he’s like, “If you reframe how you look at your life, where for most people, they’re in a community and then they see their neighbor or friend drive around in a fancy new car, and then they look at their old 10 year old car, and they’re like ‘God, my car’s a piece of junk, I really need to get a better car.’ If you then reframe that to be like, ‘You know, how awesome is it that I have this inexpensive to insure, and to maintain, and to register car, and I have all this extra free capital. How awesome is that?’ It totally changes your life, because you’re then no longer trying to, ‘Ah, I gotta spend money on this or that to keep up with these people.’ And that creates a sense of freedom and also the sense of ‘I have more space in my life to think about other things.'”
There’s gonna be a movie about it coming out.

Annie: Oh, that’s cool. I think that, that actually is a very good example of what I talk about in my book, which is changing what the inputs are that give you the reward. Ret? So this idea of don’t fight our tribal nature, right? What tribe is giving you, tribe is giving you two things. One is belongingness, right? I belong to a group, and the other is distinctiveness from other people, and this is something that’s actually just very important to us, in terms of our human condition.

And what the general default for that tribal nature does, is it causes you to compare to your neighbors, right, in the way that you’re saying, where, “Oh, they have a really nice car, I need to have one of those as well.” Just like for me in my poker group, the general default in poker is you see these tribes being formed in poker, and I’m sure you know this from sitting at enough poker tables, is people saying, “Oh, I got so unlucky when I lost that hand.”

And other people agreeing with them, and then saying, “Let me tell you about how I got unlucky.” Ret? Where we want to offload that bad feeling of loss, into a way that socializes it to the world, right? As opposed to privatizes it to ourselves, where we’re onboarding the blame. But you can reframe what it is that you get the reward from.

So the group that I worked with said, “Okay, this is our tribe, what makes you belong to our tribe and be distinct from others is we’re gonna try to be the mistake-admitters. Ret? We’re gonna try to be the ones who are trying to poke around into the hands that we want, and figure out all the disastrous decisions we made in those. And when we lose, we’re gonna try to figure out what was our part in it? And we’re gonna challenge each other when we hear people talking in a way that we think is biased.” And all these things, so that we’re still getting that need for tribe fed, and we’re still getting the social approval that comes with being in a tribe. That was all really good, it was just that the features that were being rewarded were different.

And I feel like that’s the same that you just described to me, that most of us are naturally getting our reward from, “I have a car that’s just as nice as my neighbor’s, or nicer than my neighbor’s.” Or whatever. But they’ve created a tribe now where it’s, “We belong to a tribe where we have turned that on its head, and the reward for us is that we have an older car. That our expenses are lower, and that we’re in on a secret that they’re not in on.” Ret?

Because you need that distinctiveness. “We have a secret that they don’t have, and so they’re looking at me in a certain way, like, ‘Oh, look at you with your poor, schleppy car.’ And I’m like the Hobbit, you don’t know the secret. This is the secret to success in my life, right here; that I can resist the temptation to give in to what normal humans are giving in to, in terms of what the comparison is.”

I think it’s a very good example of how you can remold tribe to fit in with what your long-term goals are, by allowing you to still get the short-term reward that we all need. It’s just that, that short-term reward is aligning with what you actually want in the long run.

Steve: Ret. That’s a great … I mean, I love how you analyzed that, because that’s exactly what’s happening, the folks that are in this Financial Independence movement, they totally reframe it to be like, “Hey, I’m proud of how frugal I am.” And they go out of their way to demonstrate that to their friends, but also in their outside lives.

I mean, just quick story. I met the community manager of this site called BiggerPockets, and I’m gonna hopefully go onto their podcast or get them on here as well. They’re real estate. But this woman-

Annie: I just went on BiggerPockets. [crosstalk]. Yeah, you can go listen to me on BiggerPockets.

Steve: Oh did you? That’s awesome. Did you talk to Mindy Jensen?

Annie: Nej nej. Who did I talk to? David and-

Steve: I know they run two podcasts. There’s BiggerPockets, and there’s BiggerPockets of Money, so I’m talking about the one BiggerPockets of Money. But anyway, so I was gonna grab coffee with her, so we’re in this resort and everything’s super expensive, and I’m like, “All right, why don’t we go in here?” And she’s like, “I can’t buy this food. It is just way too overpriced.” And I was like, “I’ll buy for you.” She’s like, “I won’t let you spend the money on this.” So we had this whole negotiation about where we could eat, and what was possible.

She’s like, “I wanna go out to the store and get food.” I was like, “All right. But there’s also the time value of money and everything else.” Anyway, I appreciate that she stuck to her principles. She ultimately did let me buy her a bagel with cream cheese on it, for $4.50. That was the one thing we could find, and we got some water.

But I appreciated the fact that hey, the core founding principle is, “Look, we’re gonna be frugal, we’re gonna be efficient with our money.” And on the other hand, she’s doing huge real estate deals. It’s not like she’s short of money, she just chooses to live her life this way, and it creates this sense of … Because we’re all sitting here worried about, “Oh, am I gonna run out of money, da, da, da …” And then you look around and you’re like, “oh, what are the current costs of my life? What if it was a quarter of what it is? What would my life be like then?” Well it’d be pretty friggin different.
So I think you’re gonna be hearing more about this, but cool.

Annie: Yeah, well it’s a great example. I hadn’t really thought about that movement in that way, but the way that you described it, really triggered that connection for me, as a really wonderful example of how you can create tribe around thoughtfully thinking about how can we use this belongingness, and the distinctiveness, to actually get us toward a goal that we really want to get to?

As opposed to the default of how we normally act, and it’s really a beautiful example, and I mean I know about the movement, but I’d never thought about it in that way, until you described it in that particular way.

Steve: Well, I’m just learning more about it, too. I just think that there’s a lot of lessons for folks from that community, because they have detached themselves successfully from the normal framework. I mean, we’re all conditioned, we grow up, we’re getting stuff, and we’re taught, “Well, the American Way is to buy more stuff.” I mean, that’s our whole economy right? We gotta buy and consume more stuff, it drives the economy and employs everybody.

On the flip side, we’re getting more and more efficient at creating this stuff, we’re realizing stuff doesn’t make us happier, because hedonic adoption, so I do think that there’s more-

Annie: Choice makes us unhappy.

Steve: Jep. Exactly. There’s all the … Now that we have all this stuff around us, and all this information coming at us all the time, now more and more people are moving towards hey, they wanna see people in person. They wanna have more thoughtful conversations. So hopefully, we will get to a happy place in our society where we can have our core needs taken care of, but still have time in our lives for our family and friends, and the things that are meaningful to us, and do meaningful work, right? Which is what I think really is the source of happiness, not the new 911 in your garage that makes you happy for about a week, and then you’re like, “Wow, this thing’s a lot to insure.”

So look, Annie, I appreciate your time. I know we’ve gone way over, but I just wanna … I’m gonna try and summarize what I’m learning here, and feel free to correct me. But my takeaway from your book, Thinking In Bets is one, there’s a ton to learn. You’ve learned a ton from playing poker and you’ve applied … And also, obviously, all the work you’ve done and research about decision-making, and we almost have to be aware of the biases and beliefs that we bring to the table, and how that affects our thinking.

And then there’s a lot of great lessons if you start to accept the uncertainty in life, try to weight the potential outcomes, and make decisions accordingly. So if there’s a high likelihood, you can put that amount of resources into it. Or high likelihood something will happen, and also high likelihood it’s gonna be really influential for your life, or whatever your business, you can put more resources into that. And if it’s low likelihood, or low outcome, you should invest resources accordingly.

And another big thing is, just learning, right? Having a system to get feedback, and welcome that feedback loop in your life, where you … Annie, one thing you mentioned to me that I thought was great, was you wanna have, I think it was strong beliefs but loosely held. Or evolving beliefs, I guess, is how you put it.

Annie: Yes, but I shouldn’t get credit for that, by the way. That’s a common … Don’t give me credit for coming up with that exact thing that you say, I just wanna not take credit for it.

Steve: Okay. But I think that idea of having evolving beliefs, right, that the world is changing, we’re learning, and don’t always default back to how you thought about things, it’s an important part of evolving as a person. Anything else that I missed there, in that summary?

Annie: I think that was a pretty darn good summary, I gotta say.

Steve: I appreciate that. I really did enjoy the book, a lot, and I’m gonna share it with our team, and hopefully our listeners pick up on it. So anything else you wanna cover, any big influencers, or things you wanna call out?

Annie: Yeah, I would love [crosstalk] make it, because it sounds like we’re mission-aligned. Yeah, and the second thing I would say is that, I think this kind of thinking, and this kind of decision-making takes practice. So I have a newsletter that I put out every Friday, which is really looking at current events, and it’s four or five pieces in each newsletter, which is looking at things that are happening out in the world currently, and how do you apply this kind of thinking to them.

So as an example, in the last newsletter, I think I had a piece about the Serena Williams to-do, and what the world really tells us about whether there was sexism or not, and what different arguments people were making, and how you can evaluate those. Just as an example, look at things that are coming out in social science, or behavioral economics, and look at some results that are coming out. Looking at things that are in politics, and how to apply this kind of thinking to evaluate things in business.

I think probably in the next newsletter that I put out, I’m gonna do something about what the shift in opinion before and after the Kavanaugh hearings were, on opinion about who was telling the truth and who wasn’t. Not such a surprise, it seems to be aligned completely with what your political party is, and nobody’s opinion changed very much from the new information, which isn’t that surprising.

So I’m gonna talk about that, and talk about how tribe really drives what your opinion is, and affects the way that you process information. So that’s just a flavor, but people can go onto my website, annieduke.com, and they can see archives of the newsletter there, so they can see if it’s to their taste, that way you can try it before you subscribe to it. But hopefully some people will find some value in that, and will subscribe to it.

Steve: Thanks, Annie, for being on our show. Thanks Davorin Robison for being our sound engineer. Anyone listening, thanks for listening. Hopefully you found this useful. Our goal at NewRetirement is to help anyone plan and manage their retirement so they can make the most of their money and time. And if you made it this far, I encourage you to, as you said, check out Annie’s book, Thinking in Bets, and her website and newsletter, and How Do I Decide, as well. And also welcome you to check out our site, and planning tools at newretirement.com, where you can build your own plan for free, and take advantage of our premium advanced tools, and personal support.

We also have a private Facebook group, and you can find us on Twitter as well, @newretirement. The last thing here, which we haven’t asked for it before but if you like this, we would love to … Either way, would love to get reviews on iTunes, or Stitch, or anywhere. We read them and we’ll try to change the show, based on your feedback. It just helps us build awareness for what’s going on out there.
All right, so that’s it. Thanks again, and have a great day.