Something You Should Know - A Better Way to Solve A Problem & How Human Biases Affect Your Decisions

Episode Date: February 24, 2020

We all make mistakes. However, wouldn’t it be nice if you could make fewer of them? This episode begins by revealing two simple strategies that have been proven to help people make fewer mistakes wh...en they attempt to accomplish a task. (Source: Joseph Hallinan author of Why We Make Mistakes https://amzn.to/39OVFrM) When you have a problem, you need to find a solution. Maybe though, the better course of action should be to change or reframe the problem. That’s the advice of Thomas Wedell Wedellsborg, who is author of the book What’s Your Problem? To Solve Your Toughest Problems, Change the Problems You Solve (https://amzn.to/3bUChLN) . Listen as he explains the fascinating process of changing the problem to find a better solution.   When you have a cold or the flu, doctors recommend bed rest. Why? What’s so special about bed rest? Listen as we discuss what bed rest does to help you get better – and the benefits are real. https://www.wsj.com/articles/fighting-the-flu-when-you-need-to-stay-home-and-in-bed-1423504355 While you like to think that you look at the world through objective eyes, it just isn’t true. Humans have very distinct biases that color your view of things, events and people. While these biases are often helpful, they can also get in the way. Listen as I discuss this with Dr. Daniel Krawczyk, a professor of behavioral and brain science at the University of Texas in Dallas. He is also the co-host of the Mental Models podcast (https://www.mentalmodelspodcast.com/) and co-author of the book Understanding Behavioral Bias (https://amzn.to/2vOw3MY). You’ll get some great insight into to how biases influence your thoughts and decision making.  This Week's Sponsors -AirMedCare Network. Go to www.AirMedCareNetwork.com/something and get up to a $50 gift card when you use the promo code: something -Better Help. Get 10% off your first month by going to www.BetterHelp.com/sysk and use the promo code: sysk Learn more about your ad choices. Visit megaphone.fm/adchoices

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Starting point is 00:00:00 As a listener to Something You Should Know, I can only assume that you are someone who likes to learn about new and interesting things and bring more knowledge to work for you in your everyday life. I mean, that's kind of what Something You Should Know was all about. And so I want to invite you to listen to another podcast called TED Talks Daily. Now, you know about TED Talks, right? Many of the guests on Something You Should Know have done TED Talks. Well, you see, TED Talks Daily is a podcast that brings you a new TED Talk every weekday in less than 15 minutes. Join host Elise Hu.
Starting point is 00:00:37 She goes beyond the headlines so you can hear about the big ideas shaping our future. Learn about things like sustainable fashion, embracing your entrepreneurial spirit, the future of robotics, and so much more. Like I said, if you like this podcast, Something You Should Know, I'm pretty sure you're going to like TED Talks Daily. And you get TED Talks Daily wherever you get your podcasts. Today on Something You Should Know, two simple strategies that will have you making fewer mistakes. Then, a better way to solve problems, rather than find the solution, change the problem.
Starting point is 00:01:17 You'll hear people say, what's the real problem? As if there was only one problem or cause for whatever's going on but for most of the problems in our lives there's more than one way of approaching it also when you have a cold of the flu the doctor recommends bed rest but does that really do anything and understanding human biases they shape your thoughts and decisions and you probably don't even notice it one of the really potent biases in our lives is known as the endowment effect. Whatever we own becomes extra valuable to us.
Starting point is 00:01:51 And the risk is you get too attached. That's why we have storage units people rent because they just can't part with their things. All this today on Something You Should Know. Since I host a podcast, it's pretty common for me to be asked to recommend a podcast. And I tell people, if you like Something You Should Know, you're going to like The Jordan Harbinger Show. Every episode is a conversation with a fascinating guest. Of course, a lot of podcasts are conversations with guests,
Starting point is 00:02:23 but Jordan does it better than most. Recently, he had a fascinating conversation with a British woman who was recruited and radicalized by ISIS and went to prison for three years. She now works to raise awareness on this issue. It's a great conversation. And he spoke with Dr. Sarah Hill about how taking birth control not only prevents pregnancy, it can influence a woman's partner preferences, career choices, and overall behavior due to the hormonal changes it causes. Apple named The Jordan Harbinger Show one of the best podcasts a few years back, and
Starting point is 00:02:58 in a nutshell, the show is aimed at making you a better, more informed, critical thinker. Check out The Jordan Harbinger Show. There's so much for you in this podcast. The Jordan Harbinger Show on Apple Podcasts, Spotify, or wherever you get your podcasts. Something you should know. Fascinating intel. The world's top experts. And practical advice you can use in your life.
Starting point is 00:03:24 Today, Something You Should Know with Mike Carruthers. Hi, welcome to Something You Should Know. I'm going to start today by talking about mistakes, the mistakes you make. And we all make mistakes. It's human to make mistakes every day. But wouldn't it be good to be able to cut down on the number of mistakes you make? So here are two techniques to cut down on errors. First, get more sleep. Lack of sleep is a huge factor in the number of mistakes we make. A study done at Harvard looked at medical residents who worked 24-hour shifts, and they found that if those medical residents worked more than five 24-hour shifts in one month,
Starting point is 00:04:07 their error rate for errors that actually harm patients went up 700%. And number two, make a checklist of steps before you tackle any project. The New England Journal of Medicine published a study that looked at what happens when doctors make a pre-surgical checklist of things they need to do during surgery. The results were that doctors who did make the checklist cut their surgical death rate of their patients by 50%. And that is something you should know. So, let's say you have a problem.
Starting point is 00:04:47 What do you do? Well, you try to figure out the solution to that problem. But wait a minute. Maybe, just maybe, the problem you're trying to solve, maybe that problem isn't the real problem. Maybe you're trying to solve the wrong problem. And what you need to do is reframe the problem as something else entirely. This will make perfect sense in just a moment as you meet Thomas Waddell Waddellsborg.
Starting point is 00:05:13 He's author of the book, What's Your Problem? To solve your toughest problems, change the problems you solve. Hey Thomas, welcome to Something You Should Know. Hello Mike, and thanks for inviting me. So let's start with an example of what you mean by somebody trying to solve the wrong problem. For instance. I think my favorite example is, imagine you are the owner of an office building. And people in the building, they're complaining about the elevator or the lift,
Starting point is 00:05:43 that it's slow, They have to wait. It's annoying. And if you just take that problem for granted, well, what most people do is they try to make the elevator faster. They say the problem is the elevator is slow. Let's figure out how to make it faster. Can we upgrade the motor? Do we need to go out and buy a new elevator. And if you ask actual landlords or building managers about this, they often try something very different, which is to put a mirror up in the hallway next to
Starting point is 00:06:12 the elevator. Because what happens is people, of course, they arrive and they go, oh, that's beautiful. And they forget that they're waiting for the elevator. Now, that's a very simple example of the idea that sometimes the best way forward is not to solve the problem that's put in front of you, but instead to ask, is there a different or better problem to solve here? Instead of trying to make the elevator faster, can we make people forget that they're waiting? That's probably the most easy example to remember what reframing really is. So, but in that example, making the elevator faster isn't necessarily the wrong problem. It's just a different problem. Exactly.
Starting point is 00:06:54 And I think that what you're saying is really drilling down to the core of a myth around problems and how we think about them. People often, you'll hear people say, what's the real problem? As if there was only one problem or cause for whatever's going on. That's maybe true in some contexts where you have like, you know, if you're in a manufacturing situation where a lot of these problem solving frameworks started. But for most of the problems in our lives, there's more than one way of approaching it. If you have problems with your daughter who doesn't want to do her homework, you have a challenge in your family relationships, you have something going on in your career that you're struggling with, very often it's not just one thing.
Starting point is 00:07:44 It's kind of a more fuzzy problem. And that's good news because that typically means there are more than one way of going about trying to solve it. So that's a great example because I think it perfectly illustrates your point. But rather than trying to make the elevator faster, that instead you put mirrors up next to the elevator so people can look at themselves and not realize how long they're waiting. That's very clever. It's very brilliant. And it's probably something I would have never thought of. But it's just clever. So how do you become more clever? I mean, how do you get there? How do you come up with that? Let's not try to make the elevator faster.
Starting point is 00:08:25 Let's come up with a clever solution to something else. It's just so funny that most people aren't that good at this because it's not something we've been paying so much, like a lot of attention to. If you look at everything within the space of problem solving, there's so much focus on this question of how do we brainstorm for better solutions? And there is comparatively little attention paid to the fact that solutions is only one half of this. The other half is the ability to think creatively about a problem. And that's really the core thing that I'm trying to teach people in my work. If you wanted the one sentence kind of summary, I'm trying to upgrade the world's ability to solve problems by making them better at reframing the problem itself.
Starting point is 00:09:14 But how do you get better at doing that as a concept when it seems very individual? Like it's very much, oh, mirrors. Oh, yeah, mirrors. But how does that help me then the next time when there's another problem totally unrelated? I'd say the very first step is just to understand what reframing is. And that you can explain to people by using the elevator story or similar. But if you want to get a little bit more tactical and kind of get an approach
Starting point is 00:09:45 for how to do this more systematically, I like to use a very simple three-step process. It's almost like taking a step back, thinking, and then moving forward again. And the very first, whatever problem you're facing, the very first step is just to go in and say, wait a second, before we start jumping into solutions, what is the problem we're trying to solve? Literally just put it down on a piece of paper in two sentences or explain it to somebody you're sitting with, what's the problem we're trying to solve? It's such a simple question, but sometimes it can just prevent people from falling in love with some kind of solution that that's not in the right direction. So that's probably the central habit. What you want to do next is go in and have maybe
Starting point is 00:10:31 even a five-minute conversation, doesn't have to be very long, about whether there's a different way of looking at the problem. Is there another way of thinking, is this really about the speed of the elevator? Or is there something else going on? Are people really tired of the landlord? Is it because everybody goes to lunch at the same point in time? Basically, a five-minute conversation with one other person, trying to brainstorm not on the solution, but on the problem itself and trying to challenge the way you see it. And then the third step at the end is really just to move forward in some way. The big danger, I think, with a lot of problem solving methods is that you can get stuck in thinking mode. I mean, paralysis by analysis is a real thing. You always have to end your thinking about a problem by figuring out something to take a step forward and try to learn more, maybe try prototyping something or do a small experiment or talk to
Starting point is 00:11:33 somebody who's involved in the problem. So that's really the practical process for doing this, irrespective of what you're dealing with, is to go in and say, what's the problem? Spend five minutes trying to challenge your thinking about it and then move forward. So give me some examples of problems that you could apply that process to. I'll share one of my favorites. A friend of mine, Tanya, Tanya Luna, she's an author as well, and her husband, Brian, they had a great marriage just when they started out. But they had one problem, which was they tended to get into a little bit like bitter fights over small things like who walked the dog, the budget, like everybody fights. But both Tanya and Brian kind of felt that their conflicts got a little too acerbic. And what was interesting, so Tanya told me like, yeah, in the beginning,
Starting point is 00:12:25 we sat down and we thought about our backgrounds, like we're from different cultures, how do we grow up? And that didn't really help them. Like all of these historically oriented, like Sigmund Freud type thinking, maybe it was true, but it didn't really help them change the situation. And then Tanya did something interesting. She started looking for what's called bright spots. A bright spot is a way to think about looking for instances of when you may already have solved the problem in the past. And that happened to be her and Brian at some point. They had a conversation about the budget over breakfast, and that was totally painless.
Starting point is 00:13:08 And after that, they stopped and said, wait, the budget is normally a very hard topic for us to discuss. How did things go so well this time? And they realized that the problem wasn't their backgrounds or cultural habits or whatever. It was that most of their fights started after 10 in the evening. So, you know, they were just tired and cranky. And so Tang and Brian instigated this rule in their relationship, the 10 o'clock rule, which basically means that if your spouse brings up something contentious, and it's after 10 o'clock, then you say, honey, it's after 10 o'clock, we'll talk tomorrow. And she credits that with something like 80% of their fights just stopped. They just stopped being an issue once
Starting point is 00:13:57 they understood that solving for the time they had the fight was really the most effective approach. So how do you get to that point? How do you get to that let's not fight after 10 o'clock point? There must be like a series of questions or specifically that you can ask that lead to that epiphany moment. I think the way to do this to get a little bit better at it basically is to start understanding some of the types of questions that are good to ask. So I'll share a couple of
Starting point is 00:14:33 examples. I mentioned already the bright spots approach. That's really about saying, you know, if you always have problems for the Thanksgiving dinner, Was there ever a Thanksgiving dinner that worked better or worked, you know, what was different about that? Another powerful approach I really like is the one of looking in the mirror. And with looking in the mirror, what I mean is looking at your own role in creating the problem. But we just like, we're all human beings and we tend to, you know, if there's an issue, we tend to go like, oh, I'm the innocent victim here. And there are these idiots in my life that are creating chaos for me. But there is something powerful in saying, you know, in the
Starting point is 00:15:16 family or maybe you have, you know, you work with a team at work that's not really doing what they're supposed to be doing. The question is really, you know, what am I doing? How am I creating this problem somehow? It can just be very powerful to start taking a hard look in the mirror and questioning your own role. That's an angle we tend to be blind to a little too often. Another thing, and I'll share a fun story with that, is to rethink the goal you're trying to reach.
Starting point is 00:15:47 Very often when we have a problem, we focus relentlessly on the problem, but we don't necessarily ask, wait, what does winning look like? What's the outcome I really want to achieve here? And that's surprisingly often the key to moving forward or to reframing your problem. So a beautiful story of that comes from Robert Sternberg, who's a big name in creativity research, about a leader at work. He loves his job, but he hates his boss. And so he goes to a headhunter and he gives the headhunter his CV and he says, can you help me find a new job, please, in the same industry so I can get away from this horrible boss? The same evening, the leader talks to his wife and together they realize that there's a much better goal to pursue. And what he does the next day is he goes to the headhunter.
Starting point is 00:16:41 But instead of giving him his own CV, he gives the headhunter his boss's CV and says, can you help my boss find a new job? And that ended up happening. The boss, not knowing anything about this, gets a job offer, accepts it, moves away from the company, and the leader at the end of the day gets promoted into his boss's role. So a very beautiful example just of saying, what's the right goal to pursue here? Is it necessary that I need to get out of this company? Or would it help if I could get rid of my boss in a positive way? We're talking about problem solving, and my guest is Thomas Waddell Waddellsborg. He's the author of a book called What's Your Problem? To solve your toughest problems,
Starting point is 00:17:27 change the problems you solve. Hi, I'm Jennifer, a founder of the Go Kid Go Network. At Go Kid Go, putting kids first is at the heart of every show that we produce. That's why we're so excited to introduce a brand new show to our network called The Search for the Silver Lining,
Starting point is 00:17:50 a fantasy adventure series about a spirited young girl named Isla who time travels to the mythical land of Camelot. Look for The Search for the Silver Lining on Spotify, Apple, or wherever you get your podcasts. People who listen to Something You Should Know are curious about the world, looking to hear new ideas and perspectives. So I want to tell you about a podcast that is full of new ideas and perspectives, and one I've started listening to called Intelligence Squared. It's the podcast where great minds meet. Listen in for some great talks on science, tech, politics, creativity, wellness, and a lot more. A couple of recent examples, Mustafa Suleiman, the CEO of Microsoft AI, discussing the future of technology.
Starting point is 00:18:31 That's pretty cool. And writer, podcaster, and filmmaker John Ronson, discussing the rise of conspiracies and culture wars. Intelligence Squared is the kind of podcast that gets you thinking a little more openly about the important conversations going on today. Being curious, you're probably just the type of person Intelligence Squared is meant for. Check out Intelligence Squared wherever you get your podcasts. So, Thomas, what are some of the other questions you can ask that get you thinking along these lines?
Starting point is 00:19:06 One very powerful thing is really this idea of trying to take somebody else's perspective. So, you know, when we're talking about a problem, there's multiple people involved in it. There's this thing within research called perspective taking, and that's literally the ability to step into somebody else's shoes and understand how they see the world. Now, what's fascinating about the research is it shows very clearly that we tend to commit two big mistakes when trying to understand other people. First of all, we just don't do it. The biggest mistake is we invest zero mental effort in trying to think about what might be going on in other people's lives. If my mother-in-law always is difficult at Thanksgiving, just asking the interesting one, even when we do think about what other people might be going through, our first guess tends to be wrong, even if it feels
Starting point is 00:20:13 right. We tend to be very quick at formulating some idea about, oh, here's what's going on. And you actually have to go beyond that and look for, could there be a reasonable explanation for this? Are they actually just good people trying to do their best in a difficult situation? Instead of assuming, as we so often do, oh, they're idiots or they are out to get me or all of these things we just instinctively do. Isn't that interesting that this whole idea of, you know, put yourself in someone else's shoes, we're not very good at that. No. But we think we are. We think, oh, okay, well, yeah, I understand. But I guess we don't really understand. I'll tell you about a striking example I experienced.
Starting point is 00:21:00 I normally teach reframing to adults. But at one point, a friend of mine who runs an elementary prep school in the Houghton River Valley invited me up to try teaching problem solving to a group of five, six, and seven-year-old kids. And what's so fascinating is if you ask adults, so what type of problems do you think these kids had? You know, in the session I asked them, pick a problem from your life that you want to discuss. And adults tend to think immediately, oh, this is about the iPad. They hate it when mom and dad takes away the iPad or bedtime or, oh, I have to go to school or the food I'm getting. I don't like it. Interestingly enough, and it was very powerful for me, when I saw the problems the kids actually picked, the parents did not figure in any of them. We think in our own heads because, you know, that the bedtime is the kid's biggest problem because that's our biggest problem. That's the part about dealing with my kid that I struggle with the most. But actually, when you looked at the problems the kids picked, they had to do almost exclusively with friends and with siblings, brothers and sisters. A very memorable example, this was a
Starting point is 00:22:16 young one, kind of saying, you know, my sister hits me and my family when she gets mad, and you can't hit back because she's smaller than you. That was a quite cute example. Another one just went in and said, well, I have to audition at school sometimes and I get really nervous because my friends are in the room. So it was so striking to me that even with, you know, with kids, with people that we've literally known them an entire lifetime. We still tend to import our own problems and our own worldviews into the situation when we're trying to understand what they really struggle with. That was just so powerful for me. What's another example, like the elevator example you gave in the beginning of our discussion here. What's another example of solving a different problem that really illustrates this?
Starting point is 00:23:09 The most powerful example I know of that is the story of the rolling suitcase. When we put wheels on suitcases, that happened in the year 1972. Or in other words, in the span of human history, first we put a man on the moon, and then we put wheels on suitcases. That to me is just such a powerful example of the idea that sometimes progress is not about coming up with a fancy new technology or anything like that. Sometimes it just depends on looking at the people in your life and seeing if there's a basic problem that they've been struggling with for so long that everybody's become blind to it. Yeah, that is such a good example. And I've talked with people about that
Starting point is 00:23:56 before. I mean, why did it take so long to put wheels on a suitcase. And you look at old videos or movies, pictures of people, you know, before then, lugging around these heavy suitcases. Why did it take so long? I think to me, the most interesting thing about the suitcase story is actually what happens a little bit later. Because, you know, when new ideas are coming in, there is sometimes some resistance to that.
Starting point is 00:24:25 And, you know, when they decided to do that, they were a little bit afraid of like, are people ready to roll a suitcase instead of just carrying it? And it turned out they were. The first suitcases, though, they were kind of these square leather things for squeaky metal wheels.
Starting point is 00:24:41 It was kind of, if you were trying to walk with it, it was like walking with a drunken dog. It wasn't very stable. The crazy thing is, as you know, we came up later with the rollerboard, which is just the idea of turning the suitcase on its side and adding a telescope pole so it's
Starting point is 00:24:58 easier to drag and more stable. That took us 15 years. Literally 15 years after the original idea, somebody said, I think there's a better way of doing this. And I think one of the things that blind us to that is literally this fixation on new technology and the future when we're trying to make the world better. Very often it is like, look at the things that are going on around you and try to see if there's a problem similar to the rolling suitcase that's missing. So wrap this up for me. What's the takeaway you think that people should get from this whole discussion about reframing problems? It's really a thinking skill. It's important to me that people don't fall too much into like a process trap of thinking like, oh, there's these like 18 steps you have to go through and so on. The second you go down that path, you just use it very, very rarely. There are really two pieces of advice I have. One is just start doing this now.
Starting point is 00:26:06 Once you're done listening to this fantastic podcast, go in and find a problem in your life. It doesn't have to be a big one. And just start discussing that with other people. So instead of thinking you have to save this for the really big problems you run into once a year, just start building the habit and the practice of asking, what's the problem we're trying to solve here? And is there a different way of looking at that? And the second piece of advice I'll share is to tell the people you solve problems with, so that might be your family or somebody you work with, about reframing. Because what I found is, it's a little bit difficult to do this alone. It is much more powerful and you'll have a lot more success with it. framing is. So share this podcast, share the slow elevator story or the suitcase story or whatever
Starting point is 00:27:05 it is, just so they understand what you're trying to do when you start saying, wait a second, before we jump into solution mode, let's just discuss the problem for five minutes. Well, it's an interesting way to think. And really, it's kind of liberating that, you know, if you can't solve the problem, then change the problem and solve that one. Thomas Waddell Waddellsborg has been my guest and the name of his book is What's Your Problem? To Solve Your Toughest Problems, Change the Problems You Solve. There's a link to the book in the show notes. Thank you, Thomas. Well, thanks so much, Mike. Really, really enjoyed it. Do you love Disney? Then you are going to love our hit podcast, Disney Countdown.
Starting point is 00:27:46 I'm Megan, the Magical Millennial. And I'm the Dapper Danielle. On every episode of our fun and family-friendly show, we count down our top 10 lists of all things Disney. There is nothing we don't cover. We are famous for rabbit holes, Disney-themed games, and fun facts you didn't know you needed, but you definitely need in your life. So if you're looking for a healthy dose of Disney magic, check out Disney Countdown wherever you get your podcasts. listeners' dilemmas with hilariously honest advice. Then we have But Am I Wrong, which is for the
Starting point is 00:28:25 listeners that didn't take our advice. Plus, we share our hot takes on current events. Then tune in to see you next Tuesday for our listener poll results from But Am I Wrong. And finally, wrap up your week with Fisting Friday, where we catch up and talk all things pop culture. Listen to Don't Blame Me, But Am I Wrong on Apple Podcasts, Spotify, or wherever you get your podcasts. New episodes every Monday, Tuesday, Thursday, and Friday. We all like to think that we look at the world objectively, that we make decisions based on the facts as we know them, that we're level-headed, thoughtful, careful. And boy, are we wrong in so many ways.
Starting point is 00:29:10 You see, we humans have a lot of biases that twist and tweak our thinking and our decision-making. Sometimes it serves us well, other times, not so much. But what might help is understanding that you have these biases, what they are, and how they work. Here to help is Dr. Daniel Krawczyk. He's a professor of behavioral and brain science at the University of Texas in Dallas. He's co-host of the Mental Models podcast and co-author of the book, Understanding Behavioral Bias. Hi Hi Daniel, welcome. Hi Mike, happy to be here. So let's begin by just in broad strokes here explaining what behavioral biases are. Well we have a lot of biases that we develop in life and they really come from the way our brains process a complicated world around us. So when we talk about biases, they can be just shortcuts
Starting point is 00:30:07 that we tend to take most of the time because they often work out for us. And when people talk about biases, they're usually talking about the benefit being we're efficient. We can get more done in less time, and we don't have to think so hard about each possible decision. Now, that's helpful a lot of the time, but occasionally we get really tripped up badly by sort of thinking too little about a particular decision or problem. And this is where biases can really hurt us. And that's when we have to step back, reflect, you know, do some harder work to think about something. And so I think of them as our brain's shortcuts that are sometimes helpful, but like shortcuts tend to do, we occasionally make a wrong turn. So give me an example, an everyday example
Starting point is 00:31:01 of how that plays out. Right. So a very easy example is called recency bias, and this has to do with our memory systems. We very potently represent recent events. This could be what's ongoing today. It could be just the fact that you're going to remember events from the past week much better than you do last month or three months ago. And so we tend to live in the now. And this comes from our brain's circuitry. We actually have different representations for very recent events versus later ones. This can get into difficult territory with things like investing because there's so much news coverage. So we tend to pay a lot of attention to the news and we can start to risk
Starting point is 00:31:51 over-representing what might happen based on just what we've taken in recently. And we do this, it seems, just because. I mean, it's just our natural reaction to think this way, not because we're doing it consciously. Well, we're doing it unconsciously. Well, this is what's so tricky about biases. That's right. You can sort of appreciate them when someone describes that you might be doing this. But in the moment, you know, we don't notice this because our stream of consciousness just kind of takes these shortcuts for us. And this is why they're tricky. And so... So take me through an example of how this might work.
Starting point is 00:32:34 Okay. So you're getting a lot of different information on your phone. You know, your newsfeed is clicking things out. And let's imagine you were investing in, say, Equifax. And in 2017, Equifax had this big data breach, which was again in the news recently linked to China. And so all we can think about is this Equifax data breach and privacy and all kinds of bad things. And people predict the stock will go down. everyone's panicked. The reality is they're a relatively sound company. And so over time, the price held. And so that's an example of where we can panic too much because just recent information is on our minds and very potent in the moment. So you have to take a broad view. Just know, just think about really how does this fit
Starting point is 00:33:25 into the general picture of the world as it goes on and try to keep yourself from getting carried away. So talk about some of the different specific biases that we have, we may not even realize we have, but that we're operating with all the time. Well, for example, one of the really potent biases in our lives is known as the endowment effect. Whatever we own, whatever we have becomes extra valuable to us. And this is related to our personal history with it. So for example, if you're investing in a company and you've held that company stock for a long time, you have all kinds of memories about it and associations about it. And the risk is you get too attached and you have a hard time selling it. This can be true of our possessions as well. It's why we have storage units people
Starting point is 00:34:17 rent because they just can't part with their things. And it's related to another bias called the sunk cost. So we all know about when we've put in a ton of work on something, we hate to walk away from it because we've put in so much effort. And those really are related to our emotions. Both of them are what I would think of as memory biases because we've developed a history with either our possessions or our stocks. And it just becomes something we like and something that a lot of memories come to mind quickly. And so it can be very tricky to sell things when we ought to. Talk about the framing effect or the framing bias. Imagine you're in a grocery store and you see meat that's advertised as 10% fat. That sounds terrible. You don't want to buy it. But if you see meat that's advertised as 90%
Starting point is 00:35:15 lean, wow, that sounds fantastic. I'll go ahead and make that purchase. Of course, it's the same percentage. It's just how you say it. So it's sort of the question, is the glass half empty or the glass half full? And words really do matter because they will highlight certain features of things. And it turns out we fall for this all the time. So when we make kind of careless, slightly thoughtless, fast decisions, we will be tricked by these frames. So you can see that in marketing and advertising all the time. One of the things we noticed, we did a brain imaging study on this, and it turned out the amygdala, an emotional area of the brain, was linked to these kind of fast, automatic, frame-based decisions. And sometimes people would notice that there was trickery and they would
Starting point is 00:36:06 make a more rational kind of analysis and answer properly the same way for both kinds of frames. And the areas of the frontal lobes were active. Our thinking, our conscious cortex was active. So you see, even at the level of the brain, you can find evidence that these biases are very strong. So the advice there is just think a little bit more carefully before you make a purchase, just to, you know, really review your assumptions and make sure the wording isn't in some way triggering you to take a shortcut. What's the hindsight bias? Well, hindsight bias is another tricky one. So they always say hindsight has 20-20. And what happens here is whenever something occurs, we feel as if we should have noticed it. And it looks different after the fact. And that's one of those distortions where we tend to maybe think we should have
Starting point is 00:37:06 factored this in. And the reality is sometimes things were predictable and we didn't notice they were going to happen. But sometimes things are very unpredictable and just kind of a freak occurrence. And what you have to do there, don't assume you were just being really absent-minded and should have noticed this. Sometimes, especially in the complicated world of things like finance, you know, the world's just so complex, we can't always see it coming along. So you can analyze news and events in your life and just sort of acknowledge that maybe that wasn't foreseeable. It may not have even been probable. So another piece of advice we give for rigorous thinking is just to think in probabilities whenever possible, you know, just like we do with the weather.
Starting point is 00:37:57 You know, there's a 60% chance of rain. It does not mean that it's 100% chance. And if you just take that little step, it helps you to better realize, you know, not everything was bound to happen just because it happened to have occurred in the past. And the optimism bias? Well, this is another great one. Optimism is something we often think is really helpful in life, and it certainly can be. It makes us feel better about the future. And I think it's related to our sense of optimism is that when we imagine things in the future, we see it working out. When you're doing something like investing, the optimism bias can be tricky because you tend to take too favorable a view of the future. And it's a little bit sobering to have to think back, well, how could things go wrong?
Starting point is 00:38:52 But that, of course, is what rigorous thinking is about. We have to make better decisions. We have to guard against the dangers of the future. So while an eternal optimist may be happier overall, they can get very tripped up by this bias of overly emphasizing the positive. This is related to another colorful bias called the ostrich effect, like the proverbial ostrich that sticks its head in the sand when bad news is occurring. And that's, of course, tricky. Also, it's painful to receive bad news, but we want to stay well informed. And, you know, it applies all over the place, like in health care, people are worried about going to the dentist because they don't want to find that, oh, my gosh, there's all these problems it's going to be painful to fix.
Starting point is 00:39:41 So that's the ostrich bias affecting our life. And the reality is we just have to confront the here and now. Don't get too emotional about it. And we're always better informed if we take in the information. Well, that's kind of a lethal combination, because if you have the optimism bias where you think the future is going to work out and you have the ostrich effect where you, when you do hear bad news, you tend to ignore it. Well, that just spells trouble. Optimism bias and the ostrich effect are very linked because when you get both of those biases going, you're sort of really too, you're putting on the rose colored glasses, so to speak, and being a little bit too positive and maybe ignoring some risks that are occurring in your life.
Starting point is 00:40:31 Is it human nature to look at the future with optimism? Is that just the way we're wired? You know, that's an interesting question. I think it would be what we call an individual difference. Some people just happen to be a little bit more positive than others. One of the things about our situation when we predict the future, though, is we just try to visualize if you're going on a day trip, for example, you're going to imagine it being sort of a sunny day and you're going to imagine getting to everything on time. And we have a very hard time thinking through where are the curveballs, right? Because by definition, they're unexpected. And so those just are harder for us to notice, I think. And so just when we make a forecast, we often think it's going to be better than it really is. And I guess that says something about
Starting point is 00:41:27 our psychology that it's beneficial to think about the positive. Positive words are more memorable to us most of the time. However, and here's an interesting fact I just learned, if you're sleep deprived, you tend to not remember the positive as much. You tend to actually have a better memory for negative things. So sometimes our state of mind can affect our optimism level as well. Well, and when you talk about memory, one of the things that interests me about memory is how over time you can test it, how inaccurate it can be. Like if you go back to the house you used to live in as a kid, it doesn't look anything like you remembered it. It's smaller. The rooms aren't exactly the way you remembered them. Well, then what am I
Starting point is 00:42:17 remembering? Yeah, that's right. It's always a little bit different. The house you grew up in always seems smaller. I think just based on our adult viewpoint in the cold light of day, so to speak. Memory has a strange property. It's not a recording device. We tend to think of our memories as these high-fidelity audio and video recordings, especially things we can visualize easily. But then the reality is over time, we store what's known as a gist memory. So that sort of an abstract sense of what the important things were. And our own personal perspective kind of gets infused into that memory so that whatever your interpretations were in your childhood will sort of color that memory of your house. And so memory is more of a sketch.
Starting point is 00:43:11 It's like a sketch within our mind rather than being a video recording. And that's really important to keep in mind. And so when you have those disagreements with your siblings about what actually happened in your childhoods, keep in mind they're operating from probably a different sketch than you are, and likely the truth is somewhere in between. And when you go back to a house and actually see your possessions and things, you think, wow, that was actually different than I remembered it. What's the primacy effect? Primacy is kind of the counterpart of the recency bias, which we talked about earlier.
Starting point is 00:43:47 Anything presented in a memory experiment early on tends to be remembered. And this is sort of like if you imagine your first day of school is a lot more memorable in retrospect than the 30th day of school. And it's simply about maybe the novelty of the situation. So new events are highly potent for our memory systems. And additionally, we don't have as much interference. So as you repeatedly go to a school or the workplace, you start to build up all these similarities and everything kind of becomes melded together. And so what happens on your 31st day interferes with the 30th day, which has had a lot of interference as well.
Starting point is 00:44:33 So this is another bias which tends to occur. Whatever happened first, whatever happened early on in a situation will have too big of an effect. We're going to remember it a lot better than equally important events that maybe happened later down the road. So that's sort of a core lesson about the way our brains lay down memories, the early novel situations get remembered, as well as the very recent things that happen right now. So that critical middle period, whatever happened, you know, not early, but not late, is often lost in the shuffle. You know, it's amazing with all these left turns that your brain makes for whatever reason, it's amazing we get anything accomplished. I mean, we're not necessarily seeing the world
Starting point is 00:45:24 as it is. We're seeing it through all these biases. Well, you know, the one thing I would say about that is we do press onward, and this is where biases may help us because the world is so complicated. If we really took the time to reflect on everything we do, we just get a lot less done. So over time, you know, we tend to develop pretty beneficial responses, automatic responses, and those biases are sometimes helpful. So that's what's lost in the behavioral bias story is actually they provide us with a means of getting through our day and being relatively happy, as we've talked about. So, you know, that optimism bias is sometimes a good thing when we just simply want to reflect
Starting point is 00:46:10 on how our life is going. Well, it's really interesting that we have these biases, and I think it really helps to identify them and name them so we can recognize them when they show up. My guest has been Dr. Daniel Krawczyk. He is a professor of behavioral and brain science at the University of Texas in Dallas. He's co-host of the Mental Models podcast and co-author of the book,
Starting point is 00:46:36 Understanding Behavioral Bias. Thanks for being here, Daniel. All right. Great interview, Mike. Thank you very much. When you have a cold or the flu, doctors typically recommend that you get plenty of bed rest. So what's so great about bed rest? Well, for one thing, if you're in bed, you can't get other people sick, but there's more to it than that. According to the medical director of the Wellness Institute at the Cleveland Clinic,
Starting point is 00:47:06 staying still is very important. Exercise is the enemy. When you limit mobility, your body has more resources to fight off your illness. Plus, when you exercise, your body temperature goes up. Flu and cold organisms replicate at a faster rate when the body gets hotter. Also, if you head to the office when you're sick, the stress of work can make it hard for your body to attack the illness. Another reason bed rest is recommended is that when you're lying down, blood flow doesn't have to work against gravity. But the doctor says any position where you're calm and inactive is fine.
Starting point is 00:47:48 And that is something you should know. You know, we have a lot of listeners to this podcast. And if you, along with every other listener, would tell one other person about this podcast, well, we'd have a lot more listeners. So please share this podcast with a friend. I'm Micah Ruthers. Thanks for listening today to Something You Should Know. Welcome to the small town of Chinook, where faith runs deep and secrets run deeper. In this new thriller, religion and crime collide when a gruesome murder rocks the isolated Montana community. Everyone is quick to point their fingers at a drug-addicted teenager, but local deputy Ruth Vogel isn't convinced.
Starting point is 00:48:29 She suspects connections to a powerful religious group. Enter federal agent V.B. Loro, who has been investigating a local church for possible criminal activity. The pair form an unlikely partnership to catch the killer, unearthing secrets that leave Ruth torn between her duty to the law, her religious convictions, and her very own family.
Starting point is 00:48:45 But something more sinister than murder is afoot, and someone is watching Ruth. Chinook. Starring Kelly Marie Tran and Sanaa Lathan. Listen to Chinook wherever you get your podcasts. Contained herein are the heresies of Rudolf Bantwine. To be continued... God, and we are not its favoured children. The Heresies of Randolph Bantwine, wherever podcasts are available.

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