Thinking in Bets

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Thinking in Bets Page 9

by Annie Duke


  “If it weren’t for luck, I’d win every one”

  Just as with motivated reasoning, our fielding errors aren’t random. They are, borrowing from psychologist and behavioral economist Dan Ariely,* “predictably irrational.” The way we field outcomes is predictably patterned: we take credit for the good stuff and blame the bad stuff on luck so it won’t be our fault. The result is that we don’t learn from experience well.

  “Self-serving bias” is the term for this pattern of fielding outcomes. Psychologist Fritz Heider was a pioneer in studying how people make luck and skill attributions about the results of their behavior. He said we study our outcomes like scientists, but like “naïve scientists.” When we figure out why something happened, we look for a plausible reason, but one that also fits our wishes. Heider said, “It is usually a reason that flatters us, puts us in a good light, and it is imbued with an added potency by the attribution.”

  Our capacity for self-deception has few boundaries. Look at the reasons people give for their accidents on actual auto insurance forms: “I collided with a stationary truck coming the other way.” “A pedestrian hit me and went under my car.” “The guy was all over the road. I had to swerve a number of times before I hit him.” “An invisible car came out of nowhere, struck my car, and vanished.” “The pedestrian had no idea which direction to run, so I ran over him.” “The telephone pole was approaching. I was attempting to swerve out of its way when it struck my car.”*

  Stanford law professor and social psychologist Robert MacCoun studied accounts of auto accidents and found that in 75% of accounts, the victims blamed someone else for their injuries. In multiple-vehicle accidents, 91% of drivers blamed someone else. Most remarkably, MacCoun found that in single-vehicle accidents, 37% of drivers still found a way to pin the blame on someone else.

  We can’t write this off to lack of self-knowledge by a few bad drivers. John von Neumann, considered a terror on the roads of Princeton, New Jersey, once offered this explanation after smashing his car: “I was proceeding down the road. The trees on the right were passing me in orderly fashion at 60 MPH. Suddenly, one of them stepped out in my path. Boom!” Et tu, JvN? Et tu?

  This predictable fielding error is probably the single most significant problem for poker players. I watched it firsthand with Nick the Greek at the Crystal Lounge. When he lost with seven-deuce, it was because he got unlucky that time. When he won playing those cards, it was because his plan of “surprise attack” was so brilliant. Off-loading the losses to luck and onboarding the wins to skill meant he persisted in overestimating the likelihood of winning with seven-deuce. He kept betting on a losing future.

  And this is not confined to Nick the Greeks of the small-time Billings variety. Phil Hellmuth, the biggest winner in World Series of Poker history (fourteen championship bracelets and counting), famously fell prey to this fielding error. After getting eliminated from a televised poker tournament, Hellmuth said on camera to ESPN, “If it weren’t for luck, I’d win every one.” This line has become legend in the poker world. (It was even the basis for a song, “I’d Win Everytime [If It Wasn’t for Luck]” in All In: The Poker Musical, a show based on Phil’s life.) When the ESPN episode aired, there was a collective gasp in the poker community. After all, Phil is saying that if the luck element were eliminated from poker—if he were playing chess—his poker skills are so superior that he would win every tournament he entered. So, clearly, any negative outcomes are due to luck, and any positive outcomes are the result of his superior skill.

  Poker players may have gasped, but the only difference between Phil and everyone else is that he said this out loud and on television. Most of us just have the sense to keep the sentiment to ourselves, especially when the cameras and mics are on. But, trust me, we are all vulnerable to the exact same thinking.

  I, certainly, am not exempt. When I was playing poker, I did my share of taking credit for winning and complaining about bad luck when I lost. It’s a fundamental urge. I’ve been conscious of that tendency in all areas of my life. Remember, we can know it’s a visual illusion, but that doesn’t keep us from still seeing it.

  Self-serving bias has immediate and obvious consequences for our ability to learn from experience.* Blaming the bulk of our bad outcomes on luck means we miss opportunities to examine our decisions to see where we can do better. Taking credit for the good stuff means we will often reinforce decisions that shouldn’t be reinforced and miss opportunities to see where we could have done better. To be sure, some of the bad stuff that happens is mainly due to luck. And some of the good stuff that happens is mainly due to skill. I just know that’s not true all the time. 100% of our bad outcomes aren’t because we got unlucky and 100% of our good outcomes aren’t because we are so awesome. Yet that is how we process the future as it unfolds.

  The predictable pattern of blaming the bad stuff on the world and taking credit for the good stuff is by no means limited to poker or car accidents. It’s everywhere.

  When Chris Christie participated in a debate before the Republican presidential primary in Iowa in early 2016, he played the part of behavioral psychologist in his attack on Hillary Clinton’s response to the tragic outcome in Benghazi: “She refuses to be held accountable for anything that goes wrong. If it had gone right, believe me, she would have been running around to be able to take credit for it.” Whether or not the accusation is correct, Christie certainly got the human tendency right: we take credit for good things and deflect blame for bad things. Ironically, only minutes earlier, he offered a pretty competitive example of the bias in himself. When asked by the moderator if the GOP should take a chance on nominating him in light of Bridgegate, he answered, “Sure, because there’s been three different investigations that have proven that I knew nothing.” Then he added, “And let me tell you something else. I inherited a state in New Jersey that was downtrodden and beaten by liberal Democratic policies, high taxes, high regulation. And this year, in 2015, New Jersey had the best year of job growth that our state has ever had in the last fifteen years. That’s because we’ve put conservative policies in place.”

  That’s a pretty fast pivot from “that bad outcome isn’t my fault” to “and let me tell you the good outcome I can take credit for.”

  I described this pattern during an address at a meeting of the International Academy of Trial Lawyers (IATL). One lawyer in the audience rushed to tell me after the speech about a senior partner he trained under when he was first out of law school. “You won’t believe how on-point this is, Annie. I assisted this partner at several trials and at the end of each day, he would analyze the witness testimony the same way. If the witness helped our case, he would say, ‘You see how well I prepared that witness? When you know how to prepare a witness, you get the results you want.’ If the witness hurt our case, he would tell me, ‘That guy refused to listen to me.’ It never varied.”

  I’m betting any parent of a school-aged child knows this. On occasions when my kids have done poorly on a test, it seems to have never been because they didn’t study. “The teacher doesn’t like me. Everybody did poorly. The teacher put material on the test we didn’t cover in class. You can ask anyone!”

  Self-serving bias is a deeply embedded and robust thinking pattern. Understanding why this pattern emerges is the first step to developing practical strategies to improve our ability to learn from experience. These strategies encourage us to be more rational in the way we field outcomes, fostering open-mindedness in considering all the possible causes of an outcome, not just the ones that flatter us.

  All-or-nothing thinking rears its head again

  Black-and-white thinking, uncolored by the reality of uncertainty, is a driver of both motivated reasoning and self-serving bias. If our only options are being 100% right or 100% wrong, with nothing in between, then information that potentially contradicts a belief requires a total downgrade, from right all the way to wrong. There is no “somewhat l
ess sure” option in an all-or-nothing world, so we ignore or discredit the information to hold steadfast in our belief.

  Both of these biases cause us to see our outcomes through the equivalent of a funhouse mirror. The reflection distorts reality, maximizing the appearance of our skill in good outcomes. For bad outcomes, it makes skill all but disappear, while luck looms giant.

  Just as with motivated reasoning, self-serving bias arises from our drive to create a positive self-narrative. In that narrative, taking credit for something good is the same as saying we made the right decision. And being right feels good. Likewise, thinking that something bad was our fault means we made a wrong decision, and being wrong feels bad. When our self-image is at stake, we treat our fielding decisions as 100% or 0%: right versus wrong, skill versus luck, our responsibility versus outside our control. There are no shades of grey.

  Fielding outcomes with the goal of promoting our self-narrative and doing it in an all-or-nothing fashion alters our ability to make smart bets about why the future unfolded in a particular way. Learning from experience is difficult—and sometimes impossible—with this kind of biased, broad-brush thinking. Outcomes are rarely the result of our decision quality alone or chance alone, and outcome quality is not a perfect indicator of the influence of luck or skill. When it comes to self-serving bias, we act as if our good outcomes are perfectly correlated to good skill and our bad outcomes are perfectly correlated to bad luck.* Whether it is a poker hand, an auto accident, a football call, a trial outcome, or a business success, there are elements of luck and skill in virtually any outcome.

  That the motivation to update our self-image in a positive way underlies self-serving bias gives us an idea of where we might look for solutions to overcome the bias. Maybe we could stop clinging to ego, giving up on that need to have a positive narrative of our lives. Maybe we could still drive a positive narrative but, instead of updating through credit and blame, we could get off on striving to be more objective and open-minded in assessing the influence of luck and skill on our outcomes. Maybe we could put in the time and hard work to retrain the way we process results, moving toward getting our positive self-image updates from accurate fielding, from truthseeking.

  Or maybe we could detour around the obstacles altogether by finding a work-around that doesn’t require us to address self-serving bias at all.

  People watching

  One could conceivably argue that maybe self-serving bias isn’t such a big deal because we can learn from other people’s experience. Maybe the solution that has evolved is to compensate for the obstacles in learning from our own experience by watching other people do stuff. There are more than seven billion other people on the planet who do stuff all the time. As Yogi Berra said, “You can observe a lot by watching.”

  Watching is an established learning method. There is an entire industry devoted to collecting other people’s outcomes. When you read the Harvard Business Review or any kind of business or management case study, you’re trying to learn from others. An important element of medical education is watching doctors perform medical procedures or other caregivers do their jobs up close. They watch, then they assist . . . and then, hopefully, they’ve learned. Who would want a surgeon who says, “This will be the first time I’ve seen inside a live human body”? It’s possible we could follow that example, going to school on the experiences of the people around us.

  In poker, the bulk of what goes on is watching. An experienced player will choose to play only about 20% of the hands they are dealt, forfeiting the other 80% of the hands before even getting past the first round of betting. That means about 80% of the time is spent just watching other people play. Even if a poker player doesn’t learn all that efficiently from the outcomes of the hands they play themselves, there is still a whole lot to be learned from watching what happens to the other players in the game. After all, there is four times as much watching everyone else as there is playing a hand yourself.

  Not only are all those other people’s outcomes plentiful, they are also free (aside from any ante). When a poker player chooses to play a hand, they are putting their own money at risk. When a poker player is just watching the game, they get to sit back while other people put money at risk. That’s an opportunity to learn at no extra cost.

  When any of us makes decisions in life away from the poker table, we always have something at risk: money, time, health, happiness, etc. When it’s someone else’s decision, we don’t have to pay to learn. They do. There’s a lot of free information out there.

  Unfortunately, learning from watching others is just as fraught with bias. Just as there is a pattern in the way we field our own outcomes, we field the outcomes of our peers predictably. We use the same black-and-white thinking as with our own outcomes, but now we flip the script. Where we blame our own bad outcomes on bad luck, when it comes to our peers, bad outcomes are clearly their fault. While our own good outcomes are due to our awesome decision-making, when it comes to other people, good outcomes are because they got lucky. As artist and writer Jean Cocteau said, “We must believe in luck. For how else can we explain the success of those we don’t like?”

  When it comes to watching the bad outcomes of other people, we load the blame on them, quickly and heavily. One of the most famous moments in baseball history, in which 40,000 people at a baseball stadium and tens of millions around the world instantly blamed an otherwise typical fan for keeping the Chicago Cubs out of the World Series, demonstrates this. The incident is known as the Bartman play.

  In 2003, the Chicago Cubs were one game from reaching their first World Series since 1945. They led three games to two in the series against the Florida Marlins, and led Game Six with one out in the top of the eighth inning. A Marlins hitter lifted a foul fly toward the left-field stands. At the base of the sloping wall separating spectators from the field, Cubs left fielder Moises Alou reached his glove over his head for the ball as several spectators on the other side of the wall also reached for it. One of the 40,000 spectators at Wrigley Field, Steve Bartman, deflected the ball, which then bounced off the railing, landing at the feet of another spectator. Alou stormed away, expressing anger at the fan who kept him from attempting to catch the ball.

  The Cubs had a 3–0 lead at the time Bartman, those folks near him, and Moises Alou reached for the foul ball. Had Alou caught it, the Cubs would have been four outs from reaching the World Series. Here’s how the future unfolded after Bartman touched the ball: The Cubs lost the game, and Game Seven too, failing again to reach the World Series. Bartman got the blame, first from the 40,000 people present (who pointed and chanted “A**hole!,” threw beer and garbage at him, and yelled death threats), then from the millions of Cubs fans, not just on sports and news shows replaying the incident at the time but for more than a decade. One person who actually assaulted Bartman while he was surrounded by stadium security said, “I wanted to expose him for ruining what could have been a once-in-a-lifetime experience.”

  Steve Bartman had a bad outcome. He reached for the ball, and the Cubs eventually lost. Was that due to his bad decision-making or bad luck? To be sure, he made the decision to reach for the ball, so there was some skill in that. He also, however, had an overwhelming amount of bad luck. Almost uniformly, people discounted that bad luck, blaming Bartman for the loss of that game and the series itself.

  Alex Gibney’s ESPN documentary on the Bartman play, Catching Hell, displays the double standard, showing the replay from numerous angles and interviewing spectators and members of the media from the scene. Gibney noted (and the footage clearly showed), “There are a lot of people who went for that ball.” One fan, who lunged right next to Bartman for the ball, couldn’t deny that he had reached for the ball, the same as Bartman. “I went for the ball. There’s no way . . . I obviously went for the ball.” Yet, he tried to claim that, unlike Bartman, he never would have interfered with the play: “Once I saw [Moises Alou’s] glove, I had no inte
rest in the ball.” That fan, at once, took credit for his good outcome in not having touched the ball and placed blame squarely on Bartman’s decision-making rather than bad luck.

  While everybody in the vicinity behaved the same way, Bartman was the unlucky one who touched the baseball. But the fans didn’t see it as bad luck. They saw it as his fault. Worse yet, none of the subsequent things that happened in the game—all clearly outside Bartman’s control—mitigated his responsibility. Remember that after that ball landed in the stands, the Cubs were in the same position they were in before the Bartman play. They still had the Marlins down to their last five outs, with a 3–0 lead in the game, their ace pitcher hurling a shutout, and a 3–2 lead in a best-of-seven series. That batter who hit the foul ball was still at the plate, with a 3–2 count. The Marlins went on to score eight runs in the inning, seven of them after (two batters later) the Cubs shortstop, Alex Gonzalez, bobbled an inning-ending double-play ball for an error.

  Bartman had a lot of bad luck to end up with that result, much of which had to do with the play of the team, over which Bartman clearly had no control. The fans, nevertheless, laid all the blame on Bartman rather than on, say, Gonzalez. Nearby fans yelled, “Rot in hell! Everyone in Chicago hates you! You suck!” As he walked through the concourse, people yelled, “We’re gonna kill you! Go to prison!” “Put a twelve-gauge in his mouth and pull the trigger!”

  It would be nice if a story line developed that gave Steve Bartman credit for the Cubs winning the World Series in 2016. After all, Steve Bartman was a key player in the chain of events responsible for a moribund franchise hiring baseball-turnaround specialist Theo Epstein as president of baseball operations and Joe Maddon as manager. Not surprisingly, that narrative hasn’t gotten any traction.*

 

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