Life’s Three-Point Shots: Assessing Risk

Harnessing the Power of Thinking in Bets

This might be the season's most thrilling last 30 seconds in the NBA playoffs: the Knicks vs. 76ers, Game 2 of the Eastern Conference Finals. 

4th quarter, 27 seconds left in the game. The Knicks close in on Philly with a 3-pointer that bounces off the rim but impossibly goes in. Knicks 99, '6ers 101. Philly throws the ball to their superstar Tyrese Maxey, who loses control of the inbound pass. The Knicks recover and pass to Donte DiVincenzo, who is outside the 3-point line. He fires - Knicks could take the lead. The Madison Square Garden crowd freezes in anticipation — no good! But somehow, the Knicks' OG Anunoby gets the rebound and now has a big decision to make. Where do I pass the ball? He makes his decision and, once again, passes to DiVincenzo outside the 3-point line. With only 13 seconds left, DiVincenzo fires again …

Again, the crowd gasps, watching the arc of that shot. Down by 2, a 3-pointer has launched. Thirteen seconds left, and it all comes down to this one decision — not who shot the ball, but who picked the shooter. Check out this epic moment and the thrill of the Knicks' win. 

But why on earth would the Knicks' Anunoby pass all the way back out to the 3-point line when other players were much closer to the basket? 2 points and overtime seems like the safe bet, so why risk going for 3 and the win - or the loss? 

It's about split-second decisions and assessing risks. It's about thinking in bets.

Thinking in Bets

Annie Duke is a former professional poker player, a game of decision-making with imperfect information. She writes about decisions and the power of thinking in bets in her fascinating book, Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts.

According to Duke, if we think of decisions as bets about our future that include life's uncertainty, we'll make better choices.  Like poker, our lives are shaped by the quality of our decision process plus the luck that plays out within those decisions. 

What she means is that decisions are really bets. Decisions are rarely 100% right or wrong—they are bets with probabilities. Framing them that way helps create more honest assessments of alternatives, consequences, and probabilities. It separates the decision-making process from its outcome because outcomes are more influenced by luck than we want to believe. 

Duke then adds the idea of "resulting" to describe a cognitive bias in decision-making where outcomes are mistakenly used to judge the quality of the decision process. In poker, “resulting” is when players mistake luck for the quality of the decision process, like this: “I won that hand because I bluffed really well” could be resulting when you won that hand out of sheer luck. But now you feel empowered as a great bluffer when you aren’t, a blindspot that ends up creating big losses. 

Great poker players discount luck in assessing their card-playing decisions. They rely on available data to determine probabilities, and then make decisions on those probabilities. Champion poker players are interested in the quality of the decision process and don't confuse that with luck's impact on the probability of a good outcome. During the course of a poker game, better decisions based on probabilities - on bets -  create better outcomes. And to a poker player, that’s winning.

What does this have to do with Anunoby's decision to get the ball to DiVincenzo outside the 3-point line? Let's go one step further.

"Risky" 3-Pointers 

Daryl Morey thought in bets and ended up changing the game of basketball. As the general manager of the Houston Rockets from 2007 - 2020, he challenged the conventional offense strategy of mid-range shots by focusing on the efficiency of 3-point shots. Back then, 3-pointers were considered risky business and not the dominant shot, as they are today.

Morey's "Moreyball" analytics-driven strategy transformed the Rockets to favor shots either from beyond the three-point line or very close to the basket. The Rockets soon led the NBA by taking 43% of their shots from the three-point range, much higher than any other team. They also focused on shots within 3 feet of the rim, making up 31% of their attempts, while only 26% were mid-range, the lowest in the league.

Morey's bet, his strategy, was based on data that created scoring probabilities he could measure, and he was right! Over time, the NBA adopted Morey's approach to basketball, and the "3-point revolution" began.

The Knick's Anunoby is a student of the game, and knew about Moreyball. He knew how to think in bets. Had Anunoby used a "resulting" mindset in those last 13 seconds to decide who should get the ball, he would have mistaken DiVincenzo's just-missed 3-pointer as an outcome due to lack of skill rather than an outcome due to bad luck. He would not have passed him the ball for what turned out to be the winning 3-pointer, and then who knows what would have happened. 

I think this quote by Anne Duke from her poker-playing days sums up Daryl Morey and OG Anunoby's decision-making process:  

I had to learn to focus on the things I could control (my own decisions), let go of the things I couldn't (luck), and work to be able to accurately tell the difference between the two.

Placing Our Bets

In my own life and in the stories of my patients and friends, fear often keeps us mid-court, supposedly playing it safe but where the odds are actually against us. We’re making the wrong bets when we are mid-court. Those 3-pointers of opportunity feel too risky - but are they?  How can we be more like Anunoby and Morey and objectively assess the probabilities of our options? 

How do we avoid "resulting"?  It’s so easy to fall victim to resulting.  

It takes courage to stop ourselves from knee-jerk decisions and false assumptions and instead think in bets on the future that account for luck, whether good or bad.  As Duke says, thinking in bets leads to better decisions, and better decisions (mixed with luck) lead to a better life.

Epilogue

In an ironic twist to the story, Daryl Morey is the current President of Basketball for the 76ers, who the Knicks defeated in this story!  You win and lose some, so let's not "result" Morey's knowledge and skills!