Decision Quality, Timing, and Time Spent

— Annie Duke, Thinking in Bets

You can control decision quality and you can’t control luck, so we’ll focus on what we can control. Annie Duke is a professional poker player, so it makes sense that she sees the world in a poker-esque way. I agree with her, but I want to expand on this to make it more applicable outside of poker.

The currency of poker is money, represented by chips. You bet money in hopes of making more money and your ultimate goal is to walk away with as much money as possible. The currency of life is time, and you can either spend the time doing things that you want or betting it certain activities in hopes of winning even more time.

Actions in poker happen in defined order. This is not true in life, which makes timing an important factor that influences outcomes, hence the idea of right/wrong place, right/wrong time. You can have everything down perfectly but act at the wrong time and it will all be for nought.

Now I will expand what Annie said with some more practical detail:

Decision Quality

How do you measure decision quality? The simplest way is by equating decision quality with outcome quality. This works in simple scenarios where cause and effect are closely tied and the time frame is short. As the complexity and time frame of the task increases, chance starts to play a larger role in the outcome.

When situations where decision quality = outcome quality, making a good decision will net you a good outcome and making a bad decision will net you a bad outcome. When complexity and scope increase, you can make a good decision and end up with a bad outcome and vice versa because of chance.

Most important decisions that you make will involve a healthy component of chance. In these scenarios you can think of your decision as a function of the information you have on hand, what you value, and your decision making process. You will never have perfection information on the situation or what you value, so this is by all means “decision making under uncertainty”.

Equating outcome quality with decision quality is something that Annie Duke call “resulting”. The issue with resulting is that you are judging your decision based on outcome quality, which is information you didn’t have at the time. This is unfair to your past self and essentially makes it impossible to consistently make good decisions because it requires you to see into the future and know what the outcome of your decision will be ahead of time.

In theory, if you had unlimited time to make every decision you would be able to make the optimal decision every time, even under uncertainty. But, the decision making process is also constrained across the time dimension. All decisions have deadlines, which makes computational efficiency an important determinant of decision quality. Those who are more computationally efficient will be able to come up with higher quality decisions than others given the same amount of time.

Computational efficiency for people is a function of intelligence and experience. Think of intelligence as the power of your processing unit (CPU, GPU, TPU, etc) and experience as the amount of training data you have and the number of training cycles you’ve performed on the data. How intelligent you are, for the most part, is out of your control, but what you decide to accrue experience in is (to a large part) within your control. Hence the importance of how you choose to spend your time.

Timing

If a decision is what you do then timing is when you do it. Technically, timing is another decision that you make, but it’s important enough and distinct enough to talk about on its own.

Roughly speaking, there are two ways to time things. The first is to guess and hope that you get lucky. A good example of this is trying to time the stock market, which, as we all know, doesn’t work over the long run. The second is to make your decisions ahead of time and wait until the right moment comes to strike. The first I’ll call “guessing” and second I’ll call “being opportunistic”.

You can’t control the outcome of guessing because it’s essentially all luck, and luck is out of your control. But being opportunistic is a different story. Being opportunistic requires you to know what you want beforehand and what you will do if certain opportunities arise. You can even go one step further and proactively prime the pump by doing things that increase the chance of coming across an opportunity. The best example of this is simply telling people around you what you want. There’s a good chance that one of them will tell you about an opportunity you didn’t know about or offer it to you. (Of course, you’re responsible for doing to the same for them if you they ask.)

If you approach the idea of “being opportunistic” systematically, you end up with a “holding area” of sorts where you keep track of all the things that you want but are waiting for the right opportunity or time to take advantage of. Whenever you decide you want something, you can add it to the holding area, and whenever you successfully take advantage of an opportunity you can remove it from the holding area. In the meantime, you can “prime the pump” for the items in the holding area in order to increase the chance of coming across an opportunity.

Time Spent

How you choose to spend your time is technically a decision as well, but as with timing, it’s important enough to talk about on its own.

As I’ve already mentioned before, how you spend your time dictates what sort of things you gather experience in, which affects your computational efficiency when it comes to certain kinds of decisions. A professional soccer player doesn’t need to stand and think about where he should be on the field during a play because he’s been playing for 20 years. After a certain point, the decision-making process becomes so efficient that it becomes unconscious or second-nature.

How you spend your time is how you spend your life. Life is measured by units of time, and if you waste all your time, you’ll never get it back. The same can’t be said for money.

The entire purpose of making good decisions and improving your timing and making money and everything else is to improve the way you spend your time. When I say “improve the way you spend your time”, I mean either enjoying your time more or making yourself more productive. All roads lead back to time and how you spend it.

Conclusion

Decision quality is important because decisions have outsized leverage in determining outcomes. Timing is important because it also has a large effect on outcome quality. How you spend your time is important because how you spend your time is how you spend your life. Also, it determines what sorts of things you will get good at in the long run.

How you time things and how you spend your time are both decisions, so Annie Duke is right:

Just remember the importance of the time dimension.

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John Doe

John Doe

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Processing information, stacking concepts. Writing this down so I don’t keep thinking about the same things over and over again