Using time-travel to make better decisions

 Temporal discounting 

• People would like to have $100 now than $110 a month later. This tendency to favor present-self at the expense of future-self is called temporal discounting
• We can use mental time travel to make sure we don't discount our future so much. 
• Think about how a decision you make now will feel in 10 mins, 10 months and 10 years later to trigger this time travel to see the impact of the decisions. 
• Move regret in front of a decisions helps you avoid that regret and also prepares you about how to handle it if it comes to pass. 

Ticker tape vs zoom lens

• If you see the ticker tape of any stock, you will see many highs and lows. But if you zoom out for the same stock you can see that all these daily ups and downs smooth out. 
  
• Our happiness is also like that. If you stress our daily up and downs you'll not be able to get the right perspective. Happiness is a long term game. 
• If you're blowing something out of proportion, your learning pod can ask questions about whether this thing matters in the future to snap you out of it.

Path dependence of happiness 

• Happiness is path-dependent. If you win some money and lose it all, you'll be bitter compared to when you start by losing some money and then making it back. 
• Time travel helps you see that both outcomes are identical and one shouldn't be better or worse than the other.

Ulysses Contracts

• You can use pre-commitments or Ulysses contracts to prevent you from irrational behavior due to too much present focus. 
• You can use either limit access to things that aren't good for you or you can increase access to things you want to do more. 

Decision swear jar 

• Based on your or language of the people around you, you can identify if anyone is not being truth seeking. 
• These are generally overconfidence, being all knowing, blowing things out of proportion, generalizing, shooting the message, leading the witness, being overgenerous in editing our story, moaning or complaining, lack of self-compassion etc. 
• Being aware of this, you can shift yourself to be more truth-seeking. 

Mapping the future 

While planning it is important to identify the full range of futures, the probability of each. By making our decision making process explicit, we will have a more realistic view of the world and we can also prepare our response for each kind of future so we are better prepared. 

Backcasting

• Thinking backward from a goal and think about the steps, events that need to happen to reach that goal. 
• It helps us identify low probability events and work to improve them so that they are more likely to happen 
• It also helps us adapt the plan to the unfolding future as we know what we are expecting to happen at each time. 
• It also helps to identify inflection points for reevaluating the decisions.  
• Company can plan pre-committments for anything that we identified during the plan. 

Premortems

• In a premortem we start by asking what will cause this decision to fail. 
• This will help us to identify all the risks to the decision
• It will give voice to any person who is doubtful of the decision but doesn't want to come out and say it. 
• Research also found that my imagining a negative future we are likely to work to avoid that. 

Hindsight Bias

• Backcasting and premortems are complementary as they help us see the full space of the future. 
• If we don't see the full future space, we are likely to think that the outcome was bound to happen. 
• It becomes impossible to realistically evaluate the decisions and probabilities after. 

How to get closer to reality by betting

We are always choosing 

• We make many decisions without thinking of all alternatives and just doing the first good thing we can think of. 
• By making a decision a bet, we make explicit that we are choosing between multiple alternatives each with its benefits and risks 
• This helps us anticipate risks and protect ourselves against irrationality that causes us to act against our own interests. 

We bet our beliefs 

• Our bets are based on our beliefs and are only as good as our beliefs 
• We think we form our beliefs by rigorously testing them before we form them but in reality when we hear something, we believe it. Then only when we have the inclination and time to think about it will we test our beliefs. 
• When something challenges our belief we generally double down on it and seek out information that confirms our beliefs rather than updating it. 
• Being smart also doesn't help as they even more blind spots
• Being asked to bet causes you to examine your beliefs as now you're concerned about being right.
• When we incorporate uncertainty in our beliefs, it becomes easier to update them. For eg going from 80% confident to 60% confident is easier than thinking I am wrong about something. 
• When we express our certainty, it makes us better collaborators. It allows others to provide information that would help us to update our beliefs faster. 

Outcome fielding & self-serving bias 

Experience is not what happens to a man. It is what is a man does with what happens to him - Auldous Huxley

• The way to improve our decisions is to use the outcomes of our decisions to update our beliefs. 
• The outcomes in our life happen either due to skill or luck but it is difficult to tell which it is due to ambiguity. 
• We generally tend to associate a decision to skill if it went well and we associate it to luck when things go bad. We can't learn from others as we do the opposite with respect to others decisions. 
  
• This is due to the self-serving bias where we want to have a positive self-update with respect to others. 
• To change this habit, we need to keep the reward (positive self-updates wrt others) the same but change the routine of comparing not based on outcomes but to being a better truth-seeker, better credit giver, better mistake admiter 

Switching the mindset to truth-seeking

• Meditation allows us to be an observer of things without getting affected. But that would need us to be away from others etc.
• Another way is to change the mindset where we consider wrong outcome fielding (associating an outcome to be due to skill or luck) as a big risk. Treating outcome fielding as a bet can trigger this mindset change. 
• Thinking in bets is hard and is not a cure all. But if we can update a few of our beliefs to be closer to reality, it can make a huge difference. 

Truth-seeking groups

• To further improve our outcome fielding, we can form a group with people who are also interested in truth-seeking. 
• It is easier for others to see our blind spots. So by forming a group it is easier for each other to help see their blind spots. 
• The truth seeking group should have a charter with 
• commitment to accuracy - the idea is to get to the truth and not just conformity improving objectivity and open-mindedness
• accountability - the members have advance notice. 
• openness to diversity of ideas
• Dissent channels and red teams where organizations seek out dissenting information is one way of getting all sorts of ideas. 
• Norm is towards homogeneity and conformity. So we should seek out ways to improve diversity and guard against our group becoming a clone of ourselves. 

The only way in which a human being can make some approach to knowing the whole of a subject is by hearing what can be said about it by persons of every variety of opinion, and studying all modes in which it can be looked at by every character of mind. No wise man ever acquired his wisdom in any mode but this; nor is it in the nature of human intellect to become wise in any other manner. - John Stuart Mills

Seek out dissent to win 

• For our group to make the right decision and provide good suggestions, we should share all the data related to a situation. If an information makes us uncomfortable, we should definitely share it. The group should also query for more info if something is unclear. 
•  Don't ignore a message just because you don't like the message or the person who gave the message. Thinking of the message as being delivered by a person we admire can help us overcome this. 
• Try not to bias the group by not telling what the result was, who gave the idea, what your opinion on it etc. Just state the facts and let the group come up with its recommendations. 
• Skepticism means trying to see why something is wrong, not why it is right. This helps us to overcome our conformity bias and get a rational view of facts. Getting a devils advocate will help you see how to succeed. 
• To communicate in a truth seeking manner
• express uncertainty - this helps people help you by sharing their thoughts
• lead with assent - acknowledge their thoughts and then add more information. Use 'And' instead of but. 
• Ask if they are looking for advice or just venting. 
• When giving advice focus on the future - ask how they can improve in the future which decreases defensiveness. 

Source: Thinking in bets - Annie Duke 

Why a bad outcome doesn't make it a bad decision

TLDR; Our minds are not rational, most of the time we take shortcuts in our decisions which cause errors in our decisions. To overcome these, we need practical tools which Poker can teach us. We cannot be 100% certain our decision was right or wrong based on the result due to the influence of luck and or incomplete information.So we should not just put the decision as right or wrong but calibrate it between different shades of gray. A good decision involves following a process where we try to accurately map the state of our knowledge and taking the best guess based on that. 

Our minds are not built for rationality

Our minds have two different systems of thinking. System 1 is the reflexive mind. It has evolved to keep us safe, help us live in this world by creating a world that makes sense. It is fast and it takes shortcuts in thinking which may or may not be true. System 2 is the deliberative mind. It follows a more methodical thinking process and is used to take decisions about what we want to achieve where we think carefully. This is slow and energy consuming. 

The important thing is to realize that we only decide what to do using deliberative mind but when we are executing those decisions more often than not, we will be using the reflexive mind. Most of the errors in our decision making happen because of the pressure on the reflexive mind to do its job fast and automatically. 

The deliberative mind is already overtaxed and more will power or being aware of the fact that reflexive mind doesn't think carefully doesn't help us make use of deliberative mind more. We can only look for practical workarounds to overcome these limitations. 

Poker is a great place to learn how to execute well in face of uncertainty

Poker is a good place to learn these practical workarounds and poker players face the same challenges. They have to take decisions fast and under pressure but still have to make sure these decisions align with their long-term goals taken with a deliberative mind. 

Decision quality doesn't depend on results 

We tend to judge a decision based on the outcome. But an outcome may not be correlated to the decision due to the influence of luck and hidden information. What makes a good decision is a good process where we try to try to accurately represent the state of our knowledge. It necessarily involves some version of I don't know. 

Best poker players are aware of this and instead of looking for 100% certainty they take their best guess and calibrating their decisions along the way.

When we know we are not 100% sure we will not fall into the black and white thinking pattern where we put decisions in either the right or wrong bucket but we will see different shades of gray and we calibrate our decisions based on these. When we misrepresent the world in the extremes of right or wrong, it limits our ability to take the right decisions.  

We have to redefine wrong due to influence of luck & incomplete information

We have to redefine wrong as we can't be 100% sure that our decision caused the result.The decision might have been good but luck or incomplete information intervened. When we redefine wrong, we can let go of the anguish we feel when we get a bad result and we can let go of the happiness when we get a right result. We can get off the roller coaster. 

Since we can't be 100% certain but we keep taking decisions, it means we are always guessing. It helps us allocate our resources. 

Source: Thinking in Bets - Annie Duke