Gambling fascinates me and I like stories associated with gamblers. Kerry Packer is an endless source of pleasure for me. He was famously irritated by a braggart in a Las Vegas casino who wanted everyone to know he had a $100m. Packer interrupted him by offering to toss a coin for a $100m! And he meant it.1
Annie Duke isn’t telling that sort of story. She’s written a book about ‘decision-making under conditions of uncertainty’, which is a version of Kahnemann and Tversky’s Judgement under uncertainty. Annie’s insight is to assert that all decisions are improved when there is money involved. It focuses the mind as it were. The taunt, ‘Put your money where your mouth is’, is very effective in drawing an argument to a close.
Her book is a discussion of improving decision-making. As we are all in love with ourselves and especially our beliefs we should actively seek out those that have an opposing viewpoint. We should test the robustness of our opinions by having them constructively criticised. This is clean opposite to what actually happens and especially in business. Businesses have hierarchies which hold sway in decision making. A junior member of staff contradicting a CEO has to be either very brave or a maverick.
Yet Annie’s insight is compelling. Life in a bracing intellectual atmosphere is more productive. Her background is as a professional poker player where decision making is more-or-less instantaneous. Unmediated biases or intuitions are hopeless in poker only a refined skilled set will suffice. And the way to get this is to subject yourself to on-going critical analysis, which takes tremendous powers of confidence. Doable, worth doing but can you?