Thinking in Bets

by Annie Duke

  We see this pattern of blaming others for bad outcomes and failing to give them credit for good ones all over the place. When someone else at work gets a promotion instead of us, do we admit they worked harder than and deserved it more than we did? No, it was because they schmoozed the boss. If someone does better on a test at school, it was because the teacher likes them more. If someone explains the circumstances of a car accident and how it wasn’t their fault, we roll our eyes. We assume the cause was their bad driving.

  When I started in poker, I followed the same pattern (and still fight the urge in every area of my life to this day). Even though I was quick to take credit for my own successes and blame bad luck for my losses, I flipped this when evaluating other players. I didn’t give other players enough credit for winning (or, viewed another way, give other players credit for my losing) and I was quick to blame their losses on their poor play.

  When I first started, my brother gave me a list of cards that were good to play, written on a napkin while we were eating in a coffee shop at Binion’s Horseshoe Casino. I clutched this napkin like I was Moses clutching the Ten Commandments. When I saw people win with hands that were not on my brother’s list, I dismissed it as good luck since they clearly did not know how to play. I was so closed-minded to the thought that they might deserve credit for winning that I didn’t even bother to describe these hands to my brother to ask him if there might be a good reason they would play a hand off the list.

  As my understanding of the game grew over time, I realized the hands on that list weren’t the only hands you could ever play. For one thing, only playing hands on the list meant you would never bluff. My brother gave me that list to keep me, a total novice, out of trouble. He gave me that list because the hands he was telling me to play would limit the mistakes a total beginner might make. I didn’t know that, depending on all sorts of factors, sometimes there are hands that wouldn’t be on the list that would be perfectly okay to play.

  Even though I had access to the list writer, I never asked my brother why these guys were playing these off-list cards. My biased assessment of why they were winning slowed my learning down considerably. I missed out on a lot of opportunities to make money because I dismissed other players as lucky when I might have been learning from watching them. To be sure, some of those people shouldn’t have been playing those hands and were actually playing poorly. But, as I figured out almost a year into playing, not all of them.

  The systematic errors in the way we field the outcomes of our peers comes at a real cost. It doesn’t just come at the cost of reaching our goals but also at the cost of compassion for others.

  Other people’s outcomes reflect on us

  We all want to feel good about ourselves in the moment, even if it’s at the expense of our long-term goals. Just as with motivated reasoning and self-serving bias, blaming others for their bad results and failing to give them credit for their good ones is under the influence of ego. Taking credit for a win lifts our personal narrative. So too does knocking down a peer by finding them at fault for a loss. That’s schadenfreude: deriving pleasure from someone else’s misfortune. Schadenfreude is basically the opposite of compassion.

  Ideally, our happiness would depend on how things turn out for us regardless of how things turn out for anyone else. Yet, on a fundamental level, fielding someone’s bad outcome as their fault feels good to us. On a fundamental level, fielding someone’s good outcome as luck helps our narrative along.

  This outcome fielding follows a logical pattern in zero-sum games like poker. When I am competing head-to-head in a poker hand, I must follow this fielding pattern to square my self-serving interpretation of my own outcomes with the outcomes of my opponent. If I win a hand in poker, my opponent loses. If I lose a hand in poker, my opponent wins. Wins and losses are symmetrical. If I field my win as having to do with my skillful play, then my opponent in the hand must have lost because of their less skillful play. Likewise, if I field my loss as having to do with luck, then my opponent must have won due to luck as well. Any other interpretation would create cognitive dissonance.

  Thinking about it this way, we see that the way we field other people’s outcomes is just part of self-serving bias. Viewed through this lens, the pattern begins to make sense.

  But this comparison of our results to others isn’t confined to zero-sum games where one player directly loses to the other (or where one lawyer loses to opposing counsel, or where one salesperson loses a sale to a competitor, etc.). We are really in competition for resources with everyone. Our genes are competitive. As Richard Dawkins points out, natural selection proceeds by competition among the phenotypes of genes so we literally evolved to compete, a drive that allowed our species to survive. Engaging the world through the lens of competition is deeply embedded in our animal brains. It’s not enough to boost our self-image solely by our own successes. If someone we view as a peer is winning, we feel like we’re losing by comparison. We benchmark ourselves to them. If their kids are doing better in school than ours, what are we doing wrong with our kids? If their company is in the news because it is about to go public, what’s wrong with us that we’re just inching forward in our work?

  We think we know the ingredients for happiness. Sonja Lyubomirsky, a psychology professor at the University of California, Riverside, and popular author on the subject of happiness, summarized several reviews of the literature on the elements we commonly consider: “a comfortable income, robust health, a supportive marriage, and lack of tragedy or trauma.” Lyubomirsky noted, however, that “the general conclusion from almost a century of research on the determinants of well-being is that objective circumstances, demographic variables, and life events are correlated with happiness less strongly than intuition and everyday experience tell us they ought to be. By several estimates, all of these variables put together account for no more than 8% to 15% of the variance in happiness.” What accounts for most of the variance in happiness is how we’re doing comparatively. (The breadth and depth of all that research on happiness and its implications is important, but it’s beyond what we need to understand our issue with sorting others’ outcomes. I encourage you to read Lyubomirsky’s work on the subject, Daniel Gilbert’s Stumbling on Happiness, and Jonathan Haidt’s The Happiness Hypothesis, cited in the Selected Bibliography and Recommendations for Further Reading.)

  A consistent example of how we price our own happiness relative to others comes from a version of the party game “Would You Rather . . . ?” When you ask people if they would rather earn $70,000 in 1900 or $70,000 now, a significant number choose 1900. True, the average yearly income in 1900 was about $450. So we’d be doing phenomenally well compared to our peers from 1900. But no amount of money in 1900 could buy Novocain or antibiotics or a refrigerator or air-conditioning or a powerful computer we could hold in one hand. About the only thing $70,000 bought in 1900 that it couldn’t buy today was the opportunity to soar above most everyone else. We’d rather lap the field in 1900 with an average life expectancy of only forty-seven years than sit in the middle of the pack now with an average life expectancy of over seventy-six years (and a computer in our palm).

  A lot of the way we feel about ourselves comes from how we think we compare with others. This robust and pervasive habit of mind impedes learning. Luckily, habits can be changed, whether the habit is biting your nails or decrying your terrible luck when you lose. By shifting what it is that makes us feel good about ourselves, we can move toward a more rational fielding of outcomes and a more compassionate view of others. We can learn better and be more open-minded if we work toward a positive narrative driven by engagement in truthseeking and striving toward accuracy and objectivity: giving others credit when it’s due, admitting when our decisions could have been better, and acknowledging that almost nothing is black and white.

  Reshaping habit

  Phil Ivey is one of those guys who can easily admit when he could have done better. I
vey is one of the world’s best poker players, a player almost universally admired by other professional poker players for his exceptional skill and confidence in his game. Starting in his early twenties, he built a reputation as a top cash-game player, a top tournament player, a top heads-up player, a top mixed-game player—a top player in every form and format of poker. In a profession where, as I’ve explained, most people are awash in self-serving bias, Phil Ivey is an exception.

  In 2004, my brother provided televised final-table commentary for a tournament in which Phil Ivey smoked a star-studded final table. After his win, the two of them went to a restaurant for dinner, during which Ivey deconstructed every potential playing error he thought he might have made on the way to victory, asking my brother’s opinion about each strategic decision. A more run-of-the-mill player might have spent the time talking about how great they played, relishing the victory. Not Ivey. For him, the opportunity to learn from his mistakes was much more important than treating that dinner as a self-satisfying celebration. He earned a half-million dollars and won a lengthy poker tournament over world-class competition, but all he wanted to do was discuss with a fellow pro where he might have made better decisions.

  I heard an identical story secondhand about Ivey at another otherwise celebratory dinner following one of his now ten World Series of Poker victories. Again, from what I understand, he spent the evening discussing in intricate detail with some other pros the points in hands where he could have made better decisions. Phil Ivey, clearly, has different habits than most poker players—and most people in any endeavor—in how he fields his outcomes.

  Habits operate in a neurological loop consisting of three parts: the cue, the routine, and the reward. A habit could involve eating cookies: the cue might be hunger, the routine going to the pantry and grabbing a cookie, and the reward a sugar high. Or, in poker, the cue might be winning a hand, the routine taking credit for it, the reward a boost to our ego. Charles Duhigg, in The Power of Habit, offers the golden rule of habit change—that the best way to deal with a habit is to respect the habit loop: “To change a habit, you must keep the old cue, and deliver the old reward, but insert a new routine.”

  When we have a good outcome, it cues the routine of crediting the result to our awesome decision-making, delivering the reward of a positive update to our self-narrative. A bad outcome cues the routine of off-loading responsibility for the result, delivering the reward of avoiding a negative self-narrative update. With the same cues, we flip the routine for the outcomes of peers, but the reward is the same—feeling good about ourselves.

  The good news is that we can work to change this habit of mind by substituting what makes us feel good. The golden rule of habit change says we don’t have to give up the reward of a positive update to our narrative, nor should we. Duhigg recognizes that respecting the habit loop means respecting the way our brain is built.

  Our brain is built to seek positive self-image updates. It is also built to view ourselves in competition with our peers. We can’t install new hardware. Working with the way our brains are built in reshaping habit has a higher chance of success than working against it. Better to change the part that is more plastic: the routine of what gives us the good feeling in our narrative and the features by which we compare ourselves to others.

  At least as far back as Pavlov, behavioral researchers* have recognized the power of substitution in physiological loops. In his famous experiments, his colleague noticed that dogs salivated when they were about to be fed. Because they associated a particular technician with food, the presence of the technician triggered the dogs’ salivation response. Pavlov discovered the dogs could learn to associate just about any stimulus with food, including his famous bell, triggering the salivary response.

  We can work to change the bell we ring, substituting what makes us salivate. We can work to get the reward of feeling good about ourselves from being a good credit-giver, a good mistake-admitter, a good finder-of-mistakes-in-good-outcomes, a good learner, and (as a result) a good decision-maker. Instead of feeling bad when we have to admit a mistake, what if the bad feeling came from the thought that we might be missing a learning opportunity just to avoid blame? Or that we might be basking in the credit of a good result instead of, like Phil Ivey, recognizing where we could have done better? If we work toward that, we can transform the unproductive habits of mind of self-serving bias and motivated reasoning into productive ones. If we put in the work to practice this routine, we can field more of our outcomes in an open-minded, more objective way, motivated by accuracy and truthseeking to drive learning. The habit of mind will change, and our decision-making will better align with executing on our long-term goals.

  There are people who, like Phil Ivey, have substituted the routine of truthseeking for the outcome-oriented instinct to focus on seeking credit and avoiding blame. When we look at the people performing at the highest level of their chosen field, we find that the self-serving bias that interferes with learning often recedes and even disappears. The people with the most legitimate claim to a bulletproof self-narrative have developed habits around accurate self-critique.

  In sports, the athletes at the top of the game look at outcomes to spur further improvement. American soccer great Mia Hamm said, “Many people say I’m the best women’s soccer player in the world. I don’t think so. And because of that, someday I just might be.” Such quotes can be discounted as a polite way of dealing with the media. There are plenty of contrary examples burned in our consciousness, like John McEnroe arguing line calls or golf pros who have turned missed putts into a ritual of staring at the offending line of the putt and tapping down phantom spike marks. Those aren’t anything more than performance tics. It’s practically a ritual on the PGA Tour that if a player misses a makeable putt, he has to stare at the green like it was somehow at fault. What you don’t see are practice rituals like Phil Mickelson’s, in which he places ten balls in a circle, three feet from the hole. He has to sink all ten, and then repeat the process nine more times. Players of Phil Mickelson’s caliber couldn’t engage in such a demanding regimen if they actually assigned much blame to spike marks.

  Changing the routine is hard and takes work. But we can leverage our natural tendency to derive some of our self-esteem by how we compare to our peers. Just as Duhigg recommends respecting the habit loop, we can also respect that we are built for competition, and that our self-narrative doesn’t exist in a vacuum. Keep the reward of feeling like we are doing well compared to our peers, but change the features by which we compare ourselves: be a better credit-giver than your peers, more willing than others to admit mistakes, more willing to explore possible reasons for an outcome with an open mind, even, and especially, if that might cast you in a bad light or shine a good light on someone else. In this way we can feel that we are doing well by comparison because we are doing something unusual and hard that most people don’t do. That makes us feel exceptional.

  Once we start listening for it, we hear a chorus out in the world like I heard during breaks in poker tournaments: “things are going great because I’m making such good decisions”; “things went poorly because I got so unlucky.” That’s what the lawyer heard from his senior partner in each evening’s postmortem of the trial. That’s what we heard from Chris Christie in the 2016 Republican presidential debate. That’s what I heard in every poker room I was ever in. There were times, and there still are, when I’m part of that chorus. Increasingly, though, I’ve learned to use that chorus to avoid self-serving bias rather than giving in to it. When I admitted mistakes, when I recognized the luck element in my successes, when I gave other players credit for making some good decisions, when I was eager to share a hand that I thought I played poorly because I might learn something from it, that chorus reminded me that what I was doing was hard, and that others weren’t often doing it. Identifying learning opportunities that other players were missing made me feel good about myself, reinforcing my routin
e change.

  Ideally, we wouldn’t compare ourselves with others or get a good feeling when the comparison favors us. We might adopt the mindful practices of Buddhist monks, observing the flow of inner thoughts, emotions, and bodily sensations without judging them as good or bad at all. That’s a great goal, and I’m all for a regular mindful practice. It will, the research indicates, help improve quality of life and is worth pursuing. But getting all the way there is a tall order if we don’t want to quit our day jobs and move to Tibet. It works against the way our brains evolved, against our competitive drive. As a parallel practice, the more practical and immediate solution is to work with what we’ve got, using that comparison to strengthen our focus on accuracy and truthseeking. Plus, we won’t have to give up our lives and find a remote mountaintop to live on.

  We need a mindset shift. We need a plan to develop a more productive habit of mind. That starts in deliberative mind and requires foresight and practice, but if it takes hold, it can become an established habit, running automatically and changing the way we reflexively think.

  We can get to this mindset shift by behaving as if we have something at risk when we sort outcomes into the luck and skill buckets, because we do have a lot at risk on that fielding decision. Thinking in bets is a smart way to start building habits that achieve our long-term goals.

  “Wanna bet?” redux

  Treating outcome fielding as a bet can accomplish the mindset shift necessary to reshape habit. If someone challenged us to a meaningful bet on how we fielded an outcome, we would find ourselves quickly moving beyond self-serving bias. If we wanted to win that bet, we wouldn’t reflexively field bad outcomes as all luck or good ones as all skill. (If you walked into a poker room and threw around words like “always” and “never,” you’d soon find yourself challenged to a bunch of bets. It’s easy to win a bet against someone who takes extreme positions.)