How to Decide
Author: Annie Duke
A practical framework for making better decisions under uncertainty. Duke, a former professional poker player, teaches how to separate decision quality from outcome quality.
Why This Book Matters to Me
Duke’s core insight—that decisions are predictions about the future, and outcomes don’t validate decisions—fundamentally changed how I evaluate my choices. Key questions I keep returning to:
- Resulting: How do you avoid judging decisions by outcomes alone?
- Counterfactuals: How do you remember the other possible futures that didn’t happen?
- Outside View: How do you escape the distortions of your own perspective?
The discipline of asking “If I were wrong, why would that be?” is now a regular practice when making high-stakes calls.
Core Definitions
Resulting: Judging decisions by outcomes rather than process. The quality of the outcome drives how we interpret the decision details.
Luck: The element you have no control over that determines which of the possible outcomes you actually observe in the short run.
Counterfactual: A what-if. A possible outcome of a decision that is not the one that actually occurred.
The Outside View: Information about what’s true of the world in general—the antidote to the distortions of your inside view.
On The Tree of Possibilities
“That’s what the future looks like when it’s ahead of you: a tree of possibilities.”
There are more possible futures than the one that actually happens. At the time you’re deciding, looking ahead, you can see so many possibilities in the context of all the other things that might happen. You glimpse the multiverse before you decide.
But there are many possible futures and only one past. Because of this, the past feels inevitable.
On Resulting
Even when we have identical details about the decision process, the quality of the outcome drives how we interpret those details. This is the power of resulting.
“Our willingness to examine outcomes is asymmetrical. We are more eager to put bad outcomes in context than good ones.”
The paradox of experience: Experience is necessary for learning, but individual experiences often interfere with learning.
The Six Steps Framework
- Identify the reasonable set of possible outcomes
- Identify your preference using the payoff for each outcome—given your values
- Estimate the likelihood of each outcome unfolding
- Assess the relative likelihood of outcomes you like and dislike
- Repeat for other options under consideration
- Compare the options to one another
“Without examining the size of the payoffs, it is impossible to figure out whether going for the upside is worth risking the downside.”
On Guessing and Precision
“This way of thinking, that there is only ‘right’ and ‘wrong’ and nothing in between, is one of the biggest obstacles to good decision-making. Because good decision-making requires a willingness to guess.”
Two questions to improve your guesses:
- What do I already know that will make my guess more educated?
- What can I find out that will make my guess more educated?
Being more precise—expressing probabilities as percentages—makes it more likely you’ll uncover information that can correct inaccuracies.
On Your Biased Intuition
“Your intuition serves at the pleasure of the inside view. Your gut does too. Intuition and gut are infected by what you want to be true.”
Disconfirmation bias means you apply a higher standard when evaluating information that contradicts your beliefs. You ask “Could this be true?” of information that agrees with you, but “Must this be true?” of information that disagrees.
A pros and cons list also serves the inside view—getting you to the decision you want rather than the one that’s objectively better.
“The outside view disciplines the distortions that live in the inside view.”
The Bottom Line
Your greatest challenge as a decision-maker is seeing things that, by their nature, are going to be hazy. Making it a habit to ask yourself “If I were wrong, why would that be?” helps you approach your beliefs with skepticism—getting more focused on what you don’t know. The shock test showed we are pretty bad at figuring out what we don’t know. We have too much confidence in what we think we know.