Book Summary – Thinking in Bets-3

This is Part 3 and the final of this multi-part summary. Read Part 1 and Part 2.

Importance of having a group/buddy system:
Have a buddy system to help you make more objective decision and forces you to think in bets. Most of the groups that we hang out with are based out of confirmation bias. All the people in the group share the same ideologies and set of ideas, anyone who tries to oppose a belief held by the group is met with hostile reaction from the other members of the group. Try to avoid this and have a group that thinks objectively, openly, willing to understand all perspectives.

Group exposes us to different viewpoints. They help us asks difficult questions to our beliefs exposing weaker beliefs from the stronger ones. It protects us from confirmation bias. We tend to remain entrench in our beliefs and shut out people that do not agree with us. Having a diverse group can stop us from digging deeper into our assumptions and beliefs.

The group needs to have an open mind and not be defensive in more controversial moments.

Point of buddy system is that it is easier for other people to spot our mistakes. What happened in the recent past drives our emotional response much more than how we are doing overall. Having a buddy system can protect us from that fallacy.

Self serving bias:
A self-serving bias is any cognitive or perceptual process that is distorted by the need to maintain and enhance self-esteem, or the tendency to perceive oneself in an overly favorable manner.

It is one thing to seek approval from the ones we respect but we want to seek approval from stranger too, even though we will never meet them again. This is self-serving bias.

Motivated reasoning and self serving bias are rooted deep in how our minds work. We can use this self serving bias by creating groups that reward us on accuracy and intellectual honesty, this so called reward can be in the from of social approval. This trick can also be used to alter or change habits. Try changing your habits by approval of others. A groups approval can change individual habits. Once this habit is formed it can be used even when you don’t have a group.

Use the 10–10–10 process:
Before a decision, ask yourself “What are the consequences of each of my options in ten minutes? Ten months? Ten years?”
These questions trigger mental time travel.

Backcasting: Working backward from a positive future
Backcasting makes it possible to identify the low-probability events that must occur to reach the goal. That could lead to developing strategies to increase the chances those events occur or to recognizing the goal as too ambitious.
Imagining a successful future and backcasting from there is a useful time-travel exercise for identifying necessary steps for reaching our goals. Working backward helps even more when we give ourselves the freedom to imagine unfavourable futures.

Pre-Mortem:
Despite the popular wisdom that we achieve success through positive visualization, it turns out that incorporating negative visualization makes us more likely to achieve our goals.
While backcasting imagines a positive future, a pre-mortem imagines a negative one.
It may not feel so good during the planning process to include this focus on the negative space. Over the long run, however, seeing the world more objectively and making better decisions will feel better than turning a blind eye to negative scenarios.

This is a lot like stoicism. I have been practicing certain parts of stoicism since past 3 years now and I can attest to this idea of imagining the negative rather than the positives as a powerful one. When you imagine the worst possible outcome of a decision, you have set the threshold of your expectations very conservatively, even a slight positive outcome will exceed the expectation threshold and make you happy about your decision.

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