Poker champ wows Davos with the secret of smart decision-making
A psychology expert-turned-poker champion has revealed the secrets of smart decision-making to an audience of business leaders at this year’s Davos summit.
The Russian-American psychologist and writer Maria Konnikova, who used her research into over-confidence to become a top poker player, said an “optimism bias” about our own abilities and other people’s kindness could prove a serious barrier to making the right decisions.
She said this optimism meant humans tended to think they had just been unlucky rather than admitting their flaws.
She suggested the most self-confident and typically successful people actually did worst in a stock market game she made them play as part of her research. Participants apparently kept doing the same things they had always done, because they were so confident their strategies could not be wrong.
READ MORE: What is Davos? The 2019 World Economic Forum explained
She said her surprising tactic in poker — being nice — also exploited the tendency to be optimistic and overly positive about others. It gave her a huge advantage as she knew players would probably reciprocate by playing aggressively towards others rather than her.
But she said business people could avoid excessive optimism about a given scenario or person by applying one simple test.
“Use the ‘Bob next door test’—if this were happening to Bob next door, what would you tell him?
“People are less good at properly assessing themselves. If you want to be a good strategic decision maker, ‘poor me’ can’t be in your vocabulary. There’s only room for an objective decision process,” she said.
READ MORE: Nasdaq chief says machines won’t fully replace humans in trading
The first rule to avoid being fooled by anything was to “trust but verify,” digging deep and asking more questions if issues failed to pass the Bob-next-door test.
Her second pearl of wisdom for anyone hoping to make better decisions was to focus on self-knowledge.
“Have you taken the time to sit down with yourself and ask—what do i believe? Why do I believe it? What do I want to believe? Who do I trust? What makes me tick?
“We’re not very good at asking ourselves, but you know who is? Con artists.”
READ MORE: Politicians avoid Davos champagne as they insist ‘more to UK than Brexit’
