Claude's Book Review - June 2024

Quit

The Power of Knowing When to Walk Away

by Annie Duke

Penguin Random House, 2022. 252 pages

It is time for another book review. This month, my attention turned to Quit by Annie Duke, a bestselling author, speaker, consultant in the decision-making space, and former professional poker player. Ahead of ordering the book, I read many promising reviews — and some disappointing ones. Before diving into my review, let me remind you that I am very interested in decision-making theory, especially at the strategic level. Some of my current beliefs on the topic have strongly been influenced by critically reading work from Kahneman, Tversky & and related scientists, notably around prospect theory.

In her latest book, Annie Duke addresses the important topic of when to walk away from a decision or when to say no. She introduces the topic in the book’s prologue by describing the story of Muhammad Ali failing to quit boxing until nearly forty and subsequently suffering the consequences of his book decision. She did catch my attention with assertions like “persistence is not always the best decision” or “success does not lie in sticking to things.” In the book’s first section, the author makes a compelling case for quitting more often and earlier than one typically does. She presents the quitting question as a decision-making problem. Two main properties characterise the decision problem of whether to quit or not: i) uncertainty, resulting from the world being stochastic, and ii) lack of information due to missing facts at hand. As such, the only time one can decide about quitting is when it is too late. The book’s writing style hooked me, and I was fond of reading ahead.

And then came the first but. The author makes the case that the quitting decision should be made in an expected value theory framework. First, this should be a compelling recommendation. Unfortunately, it comes with two significant shortcomings. First, expected value theory works best when related to repeatable events. Stated differently, relying on expected value theory is a poor choice when addressing whether to play Russian roulette. Second, expected value theory ignores the full distribution around the decision or formulated in mathematical terms; it assumes that the associated distribution has only two moments. Most of the quitting choices I can think of fail at least at one of those shortcomings. Furthermore, the author is lax in distinguishing between absolute decisions (quitting playing a poker hand) and relative decisions (quitting one job for another).

In the remaining three parts of the book, Duke revisits theories about behavioural decision-making, notably prospect theory, which have gained traction over the last decennial. She offers numerous case studies, some correctly attributed, some not (some of which I was previously aware of reading to me as plagiarism). As I have written on numerous occasions, if you are interested in a topic, I always recommend reading the original! This is especially the case for this book, as the author, to me, could do a better job of giving an overview of behavioural decision making by oversimplifying and leaving out notable parts. Furthermore, Duke fails to distinguish between explanatory and foresight theories. Prospect theory is about explaining why humans make decisions in a certain way rather than prescribing how we should make decisions. Nevertheless, if you are still getting familiar with decision-making theory in general, this book may spark your interest in the topic. The author addresses the specific topics of distinguishing between knowing and doing, thinking about kill criteria ahead of being confronted with a given decision, understanding and ignoring sunk costs, and having a backup plan, to name just a few. Most of them are illustrated with compelling examples, stories, or case studies (subject to my plagiarism concern).

The bottom line of my review of the book Quit is that, while interesting at first (and well written), it has numerous flaws that irritate the knowledgeable reader. I’m afraid I have to disagree with the praise this book has received. To me, the author fails in two key areas, making the book lousy. First, she does poorly in presenting research insights into behavioural decision-making. She takes too many shortcuts, making some of her characterisations only partially correct or even wrong. Second, by not distinguishing between explanatory and prescriptive theories into decision-making, she derives advice for how to answer the quit question that may or may not be appropriate.

This is mostly a re-tread of previous behavioural research into decision-making (loss aversion, sunk costs, and the like) with a heavy emphasis on the US. I found no additional insights. The main question was when to quit reading, about which the book was not helpful.

As always, this is my personal subjective assessment of the book Quit with which you may or may not agree. Any well-argued opinions, whether in agreement or not, are welcome!

? 2024 innovate.d llc

#book #bookreview #businessbook #business #management #decisionmaking #quitting #expectedvaluetheory #evtheory #prospecttheory #decision #deciding #sunkcosts #lossaversion #random #distribution #endowment

Download as PDF | Buy on Amazon #kickback | Subscribe to my newsletter