What defines a good or bad decision, and how can we properly learn from them? Annie Duke, retired professional poker player and author of “Thinking in Bets,” tackled that question at the 2019 Wharton Sports Business Summit. In a conversation with Prof. Adi Wyner, faculty lead of the Wharton Sports Analytics and Business Initiative (WSABI), Duke reflected on how she refined her decision-making abilities through the game.
1. A good outcome doesn’t mean you made a good decision.
Most people justify their own bad decisions just because they have good outcomes. Duke calls it the pitfall of “resulting.”
“We feel like if we know the quality of the outcome, we know what we need to know about the underlying decision-making,” she said. In reality, it’s important to critically evaluate those decisions to see how we can improve our process.
Duke gave an example using a famous play from Super Bowl XLIX. The Seattle Seahawks made a decision to pass the ball in the last 26 seconds of the game at the one-yard line, instead of running it with Marshawn Lynch. The pass was ultimately intercepted, and media outlets referred to it as “the worst play in NFL history” the following day. However, the probability of that interception was only 2 percent — it was actually a good play call, despite the outcome.
2. Learn from disagreeing.
Duke believes she improved at learning from her experiences by changing the way she elicited feedback from her mentors. Rather than inserting personal bias, she stuck to presenting the facts of a situation. In return, she welcomed different opinions.
“I want to know when you disagree with me. This is a hard thing for people to embrace. My whole life is [asking] ‘How do I find out someone disagrees with me?’ because that is when I get to learn.”
3. Gaining experience can be a double-edged sword.
According to Duke: “Experience in the aggregate is amazing for learning, but we don’t really understand the aggregate.” When asked about how to eliminate biases when analyzing data, she said it’s essential to examine past experiences by looking at the big picture rather than cherry-picking examples. “As decision-makers, we need to find a way to step back from under the shadow of a single outcome or a single subset of outcomes to get to good decision-making.”
4. Maximize your wins.
Even good decisions with good outcomes can be used as a learning opportunity.
“The systematic thing that I did in the beginning [of my career] was focus on the hands that I won,” she said. Through discussing previous poker games with her mentors, she found that framing successful plays as areas for improvement led to better long-term development.
“Maybe I made good decisions, maybe I had a good outcome — but did I maximize? Now, I’m [capable of] turning a big win into a loss in the moment, but a big win in the long run.”
— Jonathan Lahdo
Posted: January 9, 2020