FYI: This week, we speak with Annie Duke, who won the World Series of Poker in 2004, and at one point, was the winningest female poker player in history. She is the author of Thinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts.
She discusses various strategies for making probabilistic decisions, employing process oriented methodologies, and understanding the role of luck in outcomes. Poker players call this “Resulting” — looking at a single outcome as opposed to considering the broader spectrum of probabilities.
Duke explains the challenges of human psychology when taking risks; some decisions are made not on the basis of likely probabilities, but in a defensive manner against a negative possible outcome that might bring criticism.
When a player wins, it is important to separate what was luck from what was process; if you can figure that out, you can improve future outcomes and understand what you did correctly and what was randomness. Similarly, when a player loses, understanding what was the best move relative to the probabilities, and that despite the loss, should be repeated in the future is just as significant.
Regards,
Ted
http://ritholtz.com/2018/04/mib-annie-duke/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+TheBigPicture+(The+Big+Picture)
