Annotations (14)
“Dan Gilbert showed in the nineties that belief formation doesn't work the way we think. We assume we hear something, vet it, then decide if it's true. Actually, you hear it, you lodge it as true immediately, and then maybe later on you vet it. The problem is that there's all sorts of work that shows that you just don't do step three.”— Annie Duke
Psychology & Behavior · Philosophy & Reasoning
DUR_ENDURING
We believe first, vet later if at all
“Dan Kahan showed that being smart doesn't help with motivated reasoning. If I test you for how good you are with statistics on some neutral topic like does this skin cream work, I can divide people into statistically adept and not so adept. Now I give you literally the identical data, but it's about gun control. How biased your reading of those statistics is, they were perfectly fine with when it was skin cream, is actually correlated with how smart you are, and it's correlated in the bad way.”— Annie Duke
Psychology & Behavior · Philosophy & Reasoning
DUR_ENDURING
Smarter people are MORE biased with data
“When I say something that I think is a hundred percent true, like Citizen Kane won best picture, and then you say do you want to bet, what happens? Wait a minute, let me think about that. Do I want to bet on Citizen Kane as best picture? This thing that you literally said a second ago as if you were just a hundred percent sure that it was true, you now start to go through that third process. What do I know? What does he know that I don't know?”— Annie Duke
Strategy & Decision Making · Psychology & Behavior
DUR_ENDURING
Wanna bet forces vetting of beliefs
“When you run out of your stake in a poker game, you're on tilt. Your limbic system is lit up and you're going to be trying to swat that feeling away in the moment. I'm so unlucky. I can't believe how unlucky I am. These people are really bad and I'm not losing because I'm not decision fit right now, I'm losing because the cards are going against me.”— Annie Duke
Psychology & Behavior · Strategy & Decision Making
DUR_ENDURING
Stack lesser irrationality to prevent greater one
“When I express things with total certainty, one thing you might do is not tell me what you know about it because you're embarrassed, because I've said it with such assurance that maybe now you think you're wrong. But reason number two is even if you're pretty sure that Citizen Kane didn't win, you might not tell me because you don't want to embarrass me. Once I say 60 percent, it's like there's none of that.”— Annie Duke
Leadership & Management · Psychology & Behavior
DUR_ENDURING
Certainty shuts down collaboration; probabilities invite it
“Disinterestedness means we're always trying to make sure our beliefs are true. When you're trying to vet a decision, don't say what your belief about what the correct answer is, just leave it out. Really deconstruct the trade before you get the result of it. If it has expired, if you are past the outcome, which happens in poker all the time, then when you're communicating to people who don't already know the outcome, just don't tell them.”— Annie Duke
Operations & Execution · Psychology & Behavior
DUR_ENDURING
Hide outcomes to force process evaluation
“A bet is any decision where you're trying to make some decision about how to invest your resources that's informed by the beliefs that we have about what the possible future might look like. If you are in a restaurant and you're trying to choose between ordering the chicken or the fish, if you order the chicken, you're forgoing the fish, so that's the limited resource.”— Annie Duke
Strategy & Decision Making · Economics & Markets
DUR_ENDURING
Every decision is a bet on future outcomes
“Organized skepticism means approach the world asking why things aren't true as opposed to why they are. As I'm sitting there saying I want to make this particular investment I should be asking you tell me all the reasons you think that this is a really bad idea because that's more valuable to me because I already know why I think it's a great idea, so argue against it please. You can do that within your group. You can do that through really creating red teams. So you have red team, blue team.”— Annie Duke
Strategy & Decision Making · Leadership & Management
DUR_ENDURING
Red teams make dissent the goal
“Jerry Seinfeld does a bit about Night Jerry and Morning Jerry. Night Jerry's like I want a party and I'm going to have another drink and I don't want to go to bed because I'm having fun. I'm Night Jerry and then Morning Jerry's like curse you night Jerry because he's tired and hungover and he's got to go to work. Night Jerry isn't thinking about Morning Jerry. That's the real problem of temporal discounting.”— Annie Duke
Psychology & Behavior
DUR_ENDURING
Present self discounts future self's interests
“The Mertonian norms for scientific communication are CUDOS. Communism means data are shared, so within your group, be as transparent with the data as possible. Whenever you feel like you don't want to share a detail, those are the details you should share. That's a very good rule because it probably means that it's going to cast you in a bad light in some way.”— Annie Duke
Operations & Execution · Leadership & Management
DUR_ENDURING
Template forces disclosure of inconvenient data
“You need three people for a good decision group, to borrow from Phil Tetlock, author of Super Forecasters. You need two to disagree and one to referee. In the betting world, if we disagree, we have a sort of phantom third person which is the bet itself, which is now going to sort of referee the situation for us. But obviously in the real world we're not just throwing money down on the table, so you need a third person and they can act as the referee in a disagreement.”— Annie Duke
Leadership & Management
DUR_ENDURING
Three people: two disagree, one referees
“Universalism means ideas have objective truth regardless of who the person is who's communicating it. It doesn't matter whether it's Mussolini or George Washington or your mother telling you that the earth is round, the earth is round, regardless of whether you liked the communicator or not. When you are trying to talk about different viewpoints and get people's opinions and viewpoints, don't say who has the view. We can see this in our politics now.”— Annie Duke
Philosophy & Reasoning · Psychology & Behavior
DUR_CONTEXTUAL
Evaluate ideas independent of source
“Evolution often creates a Kluge, that's like, let's MacGyver it. We're going to take some toothpaste and a paperclip and a wire and we're going to make a bomb. We have this way that we form beliefs through our perceptual system. For most of evolutionary history, we formed beliefs through what we see, you see a tree, now you have a belief about that tree. Now we've got this new thing which is that we can form abstract beliefs.”— Annie Duke
Biology, Ecology & Systems · Psychology & Behavior
DUR_ENDURING
Evolution repurposes old systems for new functions
“In poker you recognize what your edge is, you know what the vol is, so you understand what your risk of ruin is and you make sure that however much money you have at risk in any given session is essentially your mind Kelly. You have to have enough money in my total bankroll that given what my edge is, I can withstand the swings. The problem is we're bad at that. We generally overestimate our edge and underestimate the vol.”— Annie Duke
Economics & Markets · Psychology & Behavior
DUR_ENDURING
We overestimate edge, underestimate volatility
Frameworks (3)
The Betting Frame for Decision-Making
Reframing decisions as bets to force probabilistic thinking
Transform any decision into an explicit bet by identifying the resources at stake, enumerating possible futures, assigning probabilities, and evaluating expected returns. The betting frame forces vetting of beliefs by making explicit what you're willing to put at risk and what future you're predicting.
Components
- Identify the resource being invested
- Enumerate possible futures
- Assign probabilities to scenarios
- Ask: Want to bet?
Prerequisites
- Willingness to express uncertainty
- Psychological safety for disagreement
Success Indicators
- Decisions are expressed probabilistically
- Beliefs are tested before action
- Post-decision reviews compare prediction to outcome
Failure Modes
- Reverting to certainty language
- Avoiding the accountability of predictions
- Using betting language without actual probability assignment
CUDOS: Scientific Norms for Decision Groups
Borrowing scientific communication norms to improve group decision-making
Structure decision group communication using the Mertonian norms: Communism (transparent data sharing), Universalism (ideas judged independent of source), Disinterestedness (hide conclusions and outcomes), and Organized Skepticism (argue against proposals). These norms combat confirmation bias and motivated reasoning by creating explicit accountability mechanisms.
Components
- Communism: Create a data sharing template
- Universalism: Separate messenger from message
- Disinterestedness: Hide conclusions and outcomes
- Organized Skepticism: Create red teams
Prerequisites
- Group commitment to accuracy over being right
- Psychological safety
- Minimum 3 people
Success Indicators
- Dissent is socially rewarded
- Outcomes are hidden during process review
- Data templates are used consistently
Failure Modes
- Reverting to status-based evaluation
- Red team becomes performative
- Template becomes checklist without substance
Stacked Irrationalities: Loss Limits as Lesser Evil
Accept one irrational constraint to prevent worse irrational decisions
When you know you'll make worse decisions in certain emotional states (tilt, loss aversion), pre-commit to an irrational but protective constraint. A loss limit is irrational for a purely rational actor, but prevents the worse irrationality of doubling down when you can't distinguish luck from skill.
Components
- Identify the emotional trigger state
- Design the protective constraint
- Create external accountability
Prerequisites
- Self-awareness of trigger states
- Willingness to accept constraints
Success Indicators
- Constraints are honored consistently
- Decisions during emotional states improve
- Avoiding catastrophic losses
Failure Modes
- Rationalizing exceptions
- Moving the constraint in real-time
- Lack of accountability
Mental Models (5)
Confirmation Bias
PsychologyThe tendency to search for, interpret, favor, and recall information that confirms preexisting beliefs.
In Practice: Dan Kahan's research on motivated reasoning
Demonstrated by Leg-ad-001
Opportunity Cost
EconomicsThe loss of potential gain from other alternatives when one alternative is chosen. Every decision involves forgoing all other options; the cost of a choice is what you give up by not choosing the next best alternative.
In Practice: Central to Duke's definition of a bet: ordering chicken means forgoing fish
Demonstrated by Leg-ad-001
Probabilistic Thinking
Decision MakingExpressing beliefs as probabilities rather than certainties. Acknowledging that the future is uncertain and that decisions should be informed by estimated likelihoods of different outcomes rather than false confidence in a single predicted outcome.
In Practice: Core to the betting frame; Duke advocates expressing uncertainty numerically
Demonstrated by Leg-ad-001
Outcome Blind Evaluation
Decision MakingEvaluating the quality of a decision based on the process and information available at the time the decision was made, not based on the outcome that resulted. Separates decision quality from result quality to prevent hindsight bias.
In Practice: Part of the Disinterestedness norm in CUDOS framework
Demonstrated by Leg-ad-001
Inversion
Decision MakingApproaching a problem from the opposite end by asking what could cause failure rather than what could cause success. Forces consideration of counterfactuals and helps identify blindspots by flipping the question.
In Practice: Part of Organized Skepticism: ask why an investment is a bad idea rather than why it's good
Demonstrated by Leg-ad-001
Connective Tissue (2)
Mertonian norms for scientific communication (CUDOS framework)
Robert Merton, a mid-20th century sociologist of science, identified four norms that govern scientific community communication: Communism (data transparency), Universalism (ideas judged independent of source), Disinterestedness (outcome-blind evaluation), and Organized Skepticism (systematic doubt). These norms evolved to combat confirmation bias in scientific inquiry. Annie Duke applies them to business decision groups, showing that the same mechanisms that keep scientists honest can keep executives honest. The parallel is direct: both scientists and decision-makers face motivated reasoning, both need group accountability, and both improve through forced transparency and dissent.
Duke explicitly names Merton and adapts his scientific communication norms to business decision-making processes
Jerry Seinfeld's Night Jerry vs. Morning Jerry comedy bit
Seinfeld's comedy routine personifies temporal discounting by splitting the self into Night Jerry (present-oriented, pleasure-seeking) and Morning Jerry (future-oriented, consequence-bearing). Night Jerry wants another drink and to stay out late; Morning Jerry curses Night Jerry for the hangover and exhaustion. Duke uses this pop culture reference to illustrate the fundamental behavioral economics problem: we systematically underweight our future self's preferences when making present decisions. The comedy bit works because it makes explicit what our brains hide: we're in conflict with our future selves. The parallel to decision-making is direct: in-the-moment decisions (like pressing a losing position in poker) feel right to present-you but are catastrophic for future-you, who has to live with the consequences.
Duke uses the Seinfeld bit to explain temporal discounting and why we need mental time travel to make better decisions
Key Figures (2)
Eric Seidel
4 mentionsProfessional poker player, former options trader
Legendary poker player who Annie Duke credits as an important mentor. He connected her to speaking opportunities in finance by referring her to speak to options traders about poker and decision-making. Duke faced him in the NBC National Heads Up Championship final, which she describes as a culmination of their long relationship.
- Seidel got Duke her first speaking opportunity in 2002 to talk to options traders about what poker could teach them about decision-making, even though Duke was pregnant and not traveling at the time.
Phil Tetlock
1 mentionsPsychologist, author of Superforecasting
Glossary (2)
tilt
DOMAIN_JARGONEmotional state where decision-making becomes impaired; from pinball machines that shut down when shaken
“So tilt for people who don't know the word because it's a very pokery term.”
kluge
DOMAIN_JARGONA workaround or makeshift solution
“Evolution often creates a Kluge.”
Key People (5)
Dan Gilbert
(1957–)Harvard psychologist known for work on happiness and belief formation
Dan Kahan
(1963–)Yale law professor studying motivated reasoning
Gary Marcus
(1970–)Cognitive scientist and author of Kluge
Robert Merton
(1910–2003)Sociologist of science who identified CUDOS norms
Phil Tetlock
(1954–)Psychologist and forecasting researcher
Concepts (7)
perceptual belief formation
CL_PSYCHOLOGYForming beliefs directly from sensory experience; the evolutionary default system
motivated reasoning
CL_PSYCHOLOGYThe tendency to process information in ways that support conclusions we want to reach
opportunity cost
CL_ECONOMICSThe value of the next best alternative foregone when making a choice
Mertonian norms
CL_PHILOSOPHYFour communication norms for science by Robert Merton: Communism, Universalism, Disinterestedness, Organized Skepticism
temporal discounting
CL_ECONOMICSThe tendency to value immediate rewards more highly than future rewards; present bias
Kelly criterion
CL_FINANCIALMathematical formula for optimal bet sizing that maximizes long-term growth rate while managing risk of ruin
risk of ruin
CL_FINANCIALThe probability of losing your entire bankroll; function of edge, volatility, and position sizing
Synthesis
Synthesis
Migrated from Scholia