30 September 2024
Chess is a game of perfect information: all players have perfect knowledge of all the pieces on the board. There are no surprise pawns that appear out of nowhere, no random effects, no surprise rules (though en passant often comes close to the amateur player). Poker, on the other hand, is a game where a given player only knows a part (and often a small part) of what's on the board, and has to use other evidence to create a reasonable interpretation/model of what's probable, and then make choices based on that.
By treating decisions as bets, poker players explicitly recognize that they are deciding on alternative futures, each with benefits and risks. They also recognize that there are no simple answers. If we follow the example of poker players by making explicit that our decisions are bets, we can make better decisions and anticipate (and take protective measures) when irrationality is likely to keep us from acting in our best interest.
All decisions are bets. A "bet" is "a choice made by thinking about what will probably happen"; "to risk losing (something) when you try to do or achieve something"; "to make decisions that are based on the belief that something will happen or is true". Every decision commits us to some course of action that, by definition, eliminates acting on other alternatives.
Annie Duke, in her book, "Thinking in Bets", talks about this in great detail, so I'll leave deep study of the subject to her. Read the book. My notes are here if you want to check those out, but seriously, read the book, then write your own notes to help sink it into your brain. :-)
For the record, I am almost to the point of revising this Ism to read, "most decisions are bets".
Tags: management antipatterns