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In this episode, former World Series of Poker champion and author Annie Duke explains how poker is a pertinent model system for decision-making in the real world, a system which blends imperfect information with some unknown percentage of both luck and skill. Annie breaks down the decision-making matrix, revealing how we often focus too narrowly on just one of the four quadrants, missing out on valuable learning opportunities in the remaining 75% of situations. She delves into how our tendency to evaluate only negative outcomes leads to a culture of risk aversion. This mindset, she argues, stifles the kind of bold decision-making necessary for progress and innovation across various fields, from poker and sports to business and medicine. Annie also introduces a robust framework for learning and the levels of thought required to excel in any domain. Finally, she discusses a strategy called “backcasting”, a concept that resonated deeply with Peter in terms of how he thinks about extending healthspan.

We discuss:

• Annie’s background, favorite sports teams, and Peter’s affinity for Bill Belichick [1:30];
• Chess vs. poker: Which is a better metaphor for decision-making in life (and medicine)? [6:45];
• Thinking probabilistically: Why we aren’t wired that way, and how you can improve it for better decision-making [12:30];
• Variable reinforcement: The psychological draw of poker that keeps people playing [19:15];
• The role of luck and skill in poker (and other sports), and the difference between looking at the short run vs. long run [32:15];
• A brief explanation of Texas hold ‘em [41:00];
• The added complexity of reading the behavior of others players in poker [47:30];
• Why Annie likes to “quit fast,” and why poker is still popular despite the power of loss aversion [52:45];
• Limit vs. no-limit poker, and how the game has changed with growing popularity [55:15];
• The advent of analytics to poker, and why Annie would get crushed against today’s professionals [1:04:45];
• The decision matrix, and the “resulting” heuristic: The simplifier we use to judge the quality of decisions —The Pete Carroll Superbowl play call example [1:10:30];
• The personal and societal consequences of avoiding bad outcomes [1:21:45];
• Poker as a model system for life [1:31:30];
• How many leaders are making (and encouraging) status-quo decisions, and how Bill Belichick’s decision-making changed after winning two Super Bowls [1:35:15];
• What did we learn about decision-making from the Y2K nothingburger? And how about the D-Day invasion? [1:39:30];
• The first step to becoming a good decision maker [1:43:00];
• The difference between elite poker players and the ones who make much slower progress [1:49:45];
• Framework for learning a skill, the four levels of thought, and why we hate digging into our victories to see what happened [1:52:15];
• The capacity for self-deception, and when it is MOST important to apply four-level thinking [2:00:30];
• Soft landings: The challenge of high-level thinking where there is subtle feedback and wider skill gaps [2:11:00];
• The benefits of “backcasting” (and doing pre-mortems) [2:13:30];
• Parting advice from Annie for those feeling overwhelmed (and two book recommendations) [2:21:30]; and
• More.

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