Review – Thinking in Bets

The world of professional gambling is a relatively closed-off world. This makes intuitive sense, given the secretive and oftentimes fleeting “edges” of gamblers, and their desire to continue to capitalize on the undereducated play of nonprofessional gamblers, where many gamblers make outsized returns.

One of the most widely known professional gamblers (before the recent reign of Jeopardy all-timer James Holzhauer) is the sports gambler Haralabob Voulgaris, a frequent and always-entertaining guest of Bill Simmons’ podcast. Haralabob’s insights into professional basketball, where he focused his energy and capital, were oftentimes counterintuitive, controversial, or against commonly-held wisdom, and were always entertaining. Unfortunately, to the detriment of the layman basketball media consumer, Mark Cuban, owner of the Dallas Mavericks, caught wind of Haralabob’s talent and hired him to become Dallas’ Director of Quantitative Research and Development.

Both Holzhauer and Voulgaris, and their abilities to snuff out edges and arbitrages working within established systems, demonstrated that there is much to be learned from the world of professional gambling. Another example is Ed Thorp, author of the blackjack card-counting book Beat the Dealer, who after being banned from the Vegas casinos turned his attentions to the stock markets, writing a follow-up book entitled Beat the Market (the stories of which are covered entertaining detail in his autobiography, A Man for All Markets). Regardless, the stereotypes of professional gamblers mob-connected sharks dropping millions on an inside tip or gut feeling has certainly matured considerably in recent years (though I’m sure these folks still exist).

Annie Duke’s Thinking in Bets is a business book that draws on Duke’s (seemingly controversial) time as a professional poker player, a profession that she took on following in the footsteps of her brother, professional player Howard Lederer, after failing to publish a dissertation in cognitive psychology. Duke’s book draws equally on both of her former lives, as well as from her most recent one — as a corporate consultant, “decision strategist” and speaker.

thinking_in_betsThinking in Bets: Making Smarter Decisions When You Don’t Have All the Facts, by Annie Duke (Portfolio Penguin 2018)

Thinking in Bets pulls liberally from the works of acclaimed economists, behavioral economists, psychologists, and sociologists like Daniel Kahneman, Dan Ariely, Michael Mauboussin, and Robert K. Merton, compiling some of their career-defining research with entertaining anecdotes from her adventures as a professional poker player surrounded by compulsive gamblers. These stories often times felt too few and far between, and would’ve been welcomed.

In lieu of more gambling examples, Duke draws on wellworn anecdotes from the world of sports, as well as from her newfound role as a corporate advisor, to help illustrate her points and presumably illicit recall from readers. These several-page-long level-setting explanations take away from Duke’s unique vantage point and attraction as a gambler-turned-writer. Reading this book, I wish that Duke elaborated more on the worlds of wagering and oddsmaking to complement her explanations of probability-based thinking and seeking out objectivity (termed “truthfulness” by Duke). While the subjectmatter of Thinking in Bets is worthwhile, it would be better served with some lighter treatment when she’s not diving deep into the published research.

One approach that Duke refers to as a common practice of professional poker players to avoid “resulting” (or incorporating the outcome of the event into one’s analysis of the approach / strategy / decision-making) is to analyze a poker player’s handling of a particular hand of poker, while never divulging the result itself, so as to avoid any biases that would naturally bias the evaluators. More parallels like this to the world of professional gambling, or even callbacks to famous hands from her poker-playing career or poker history, would only serve to drive her point home further.

A common critique that I find in “pop” social science books like Duke’s is a tendency to overload the book with every relevant study that could add to the author’s argument, and hope that the sum total of these studies with lead to the reader’s assent to the book’s broader premise. Each individual study normally provides interesting insights that could be potentially actionable if explained and explored in depth, but the barrage found in most books results in each individual conclusion becoming lost in the process and not actionable. While Duke doesn’t shy away from loading the reader up on studies, she helpfully pulls back to offer the reader helpful and actionable processes, while ceding that our brains are natural purveyors of these biases and deficits, and that there’s no use in trying to attempt to rewire our mental makeup entirely. Rather, like the most successful gamblers and learners, Duke explains the benefit of choosing one’s spots and seeing compound benefits from implementing small changes to one’s habits and routines.

Thinking in Bets is a useful book on cognitive psychology with some elements pulled from the world of gambling. However, Duke’s work found me wishing to return to the work of Nassim Taleb, especially his most recent book, Skin in the Game (reviewed here). For those looking to dive deeper into the world of gambling, the life of writer-turned-gambler Maria Konnikova comes to mind (book forthcoming?), as well as author Colson Whitehead’s The Noble Hustle.

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