Strategic Thinking

Thinking in Bets Every decision is a bet on the future made with incomplete information. By reframing decisions as bets, you naturally become more calibrated about uncertainty, more willing to update beliefs, and better at separating decision quality from outcome quality. Steps: 1. Reframe: Recognize that the decision you are making is a bet with incomplete information, not a certainty 2. Calibrate: Express your confidence as a probability (e.g., 70% likely) rather than a binary right/wrong 3. Separate: Distinguish between decision quality (process) and outcome quality (result). Good process can yield bad outcomes through luck, and vice versa 4. Field outcomes: When evaluating results, assign each outcome to a position on the luck-skill spectrum rather than defaulting to self-serving bias 5. Update: Incorporate new information to adjust your confidence levels. Seek disconfirming evidence actively Why it works: Framing decisions as bets activates natural skepticism and dampens motivated reasoning. The prospect of a wager forces you to confront how sure you really are, making you less susceptible to overconfidence, confirmation bias, and self-serving attribution. Common mistakes: - Resulting: Judging decision quality solely by the outcome it produced - Self-serving bias: Taking credit for good outcomes (skill) and blaming bad outcomes on luck - Binary thinking: Treating beliefs as right/wrong rather than as confidence levels on a spectrum - Hindsight bias: Believing after the fact that the outcome was inevitable or predictable