Annie Duke on Poker, Probabilities, and How We Make Decisions

Podcast Notes Key Takeaways It’s hard for people to make bets that hedge against their identityPeople will hedge against disaster with fire insurance but are less likely to hedge against their marriage with a prenup (only about 5% of married couples have a prenup)“We have this idea that if we do hedge against something, that somehow if the bad thing happens, we caused it. And this is particularly problematic in situations that do have very high emotional valence.” – Annie DukeBooks such asThe Power of Positive Thinkingby Dr. Norman Vincent Peale and The Secret by Rhonda Byrne teach readers to think positively because their outcome is dependent on their thoughts Be aware of the self-serving bias: We tend to attribute good things to our own skill, and we tend to attribute bad things that happen to us to luckBeing a good poker playing and good decisions in the game doesn’t exactly transfer over to other activities:“I do think that one of the things that poker teaches you is that you shouldn’t assume that just because people are really skillful in one domain that that’s going to transfer. Because I think that that ability can be very, very domain-specific.” – Annie DukeThe top 500 poker players tend to be brilliant in game-theory and in making real-time, high-stakes decisions“Just because you’re smart doesn’t mean that you can become a great player. I think that you have to be smart in a very particular way” – Annie DukeThe number one trait of a top poker player is open-mindedness:“In order to really succeed at the top levels of the game, you have to be so open minded. You have to be so willing to ponder on a daily basis the idea that you might be wrong, the idea that the things that you think to be true or what you think about an opponent — that it just might be inaccurate.” – Annie Duke

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For Annie Duke, the poker table is a perfect laboratory to study human decision-making — including her own. “It really exposes you to the way that you’re thinking,” she says, “how hard it is to avoid decision traps, even when you’re perfectly well aware that those decision traps exist. And how easy it is for like your mind to slip into those traps.” She’s spent a lot of time studying human cognition at the poker table and off it — her best-known academic article is about psycholinguistics and her forthcoming book is titled How to Decide: Simple Tools for Making Better Choices.

Annie joined Tyler to explore how payoffs aren’t always monetary, the benefits and costs of probabilistic thinking, the “magical thinking” behind why people buy fire insurance but usually don’t get prenups, the psychology behind betting on shark migrations, how her most famous linguistics paper took on Steven Pinker, how public policy would change if only the top 500 poker players voted, why she wasn’t surprised to lose Celebrity Apprentice to Joan Rivers, whether Trump has a tell, the number one trait of top poker players, and more.

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