The Debt Trap

We like to think that good financial decisions come down to discipline and basic math. But the psychology of money turns out to be deeply complicated. Researcher John Dinsmore explains the hidden mental biases that shape how we think about spending, borrowing, and the future. We explore how these forces can steer us toward costly mistakes — and how to guard against them. Then, on Your Questions Answered, researcher Bobby Parmar returns to consider the upsides of embracing uncertainty.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Shankar Vedantam?

  This is Hidden Brain. I'm Shankar Vedantam.

• 0:05Shankar Vedantam?

  It happens all the time. The lovely couple with the nice house, beautiful family, and gainful careers unexpectedly find themselves drowning in tens of thousands of dollars of credit card debt.

• 0:17Speaker 01

  Debt grew by $93 billion at the end of 2024, and half of that increase came from new credit card debt.

• 0:28Shankar Vedantam?

  Or maybe it's the fresh college graduate who, rather than looking forward to a bright future and a sense of freedom, finds himself trying to pay back a series of compounding loans, only to watch the balance grow year after year after year.

• 0:42Speaker 01

  One out of every four Americans with student loans is delinquent. That's nearly triple the pre-pandemic delinquency rate.

• 0:53Shankar Vedantam?

  And then there's the retiree who thought she had enough saved until one medical emergency wiped out her nest egg.

• 1:01Speaker 02

  And so you just start chipping away at your savings, chipping away at everything you have, and ultimately chipping away at retirement.

• 1:10Shankar Vedantam?

  It's easy to believe this would never happen to me. I would be smarter, savvier, better at saving. And yet, hundreds of millions of people around the world find themselves enmeshed in debt. Some of this has to do with reckless spending, of course. But even when you do everything right, budget, plan, and make reasonable choices, debt has a way of surprising you.

• 1:39Shankar Vedantam?

  Today on the show, the unseen traps that influence our behavior when it comes to money, the entities that take advantage of our mistakes, and how to win back our freedom.

• 1:51Shankar Vedantam?

  The psychology of debt. This week on Hidden Brain.

• 2:08Speaker 03

  Working as a dedicated Fidelity advisor, I always ask, what's important to you? I'll look at those priorities and goals alongside your full financial picture to build a comprehensive plan designed to help grow and protect your wealth. With proactive portfolio insights and an eye on taxes, I'm here to help you make the most of your money. I'm Laura Maxwell, and I'm a dedicated Fidelity advisor. Learn more at fidelity.com/wealth. Investment minimums apply. Fidelity Brokerage Services, LLC, member NYSE, SIPC.

• 2:39Shankar Vedantam?

  Support for Hidden Brain comes from Pacific Life Insurance. You make promises throughout your life. For nearly 160 years, Pacific Life has been helping you keep them by protecting those who matter most. Pacific Life, the power of a promise. Ask a financial professional how Pacific Life can help you create a more confident financial future. Pacific Life Insurance Company, Omaha, Nebraska. And in New York, Pacific Life and Annuity, Phoenix, Arizona.

• 3:10Shankar Vedantam?

  Support for Hidden Brain comes from ADT. It's that time of year, back to school, back to work, back to routine. ADT wants to help you get back to home. With their customizable systems that can be professionally installed and the ADT Plus app that lets you access your whole system from your phone, ADT has your home security covered. Visit ADT.com or call 1-800-ADT-ASAP. When every second counts, count on ADT.

• 3:45Shankar Vedantam?

  We like to think we are good with money. Make a budget, save a little bit each week, open a retirement account. With a little willpower and discipline, we're going to be okay. At Wright State University, John Dinsmore studies financial decision-making, how our minds work when it comes to money, and why our hopeful plans often fail to come to fruition. John Dinsmore, welcome to Hidden Brain. Thanks for having me. John, I want to start with the story of businessman David Siegel and his wife Jacqueline. Who were they and how did they first come into money?

• 4:20Speaker 04

  Well, David Siegel was the timeshare king of the United States. So for those who aren't familiar, a timeshare is, let's say you want to have a vacation home in Florida, Miami. Rather than having to buy an entire condo on your own, you would buy some portion of it and you would be assigned a certain number of weeks to be able to use at that timeshare location. But for a company like Westgate, which was David Siegel's company, it would also open you up to a larger timeshare network so that if you didn't want to go to Miami on vacation every year, you could maybe take weeks at some of their other properties, Las Vegas,

• 5:04Speaker 04

  San Diego, or wherever.

• 5:07Shankar Vedantam?

  And I understand that Jackie was a former Miss Florida Pageant winner and the two of them met in 1998, fell in love, and had eight kids together.

• 5:16Speaker 04

  Yes, yes. So he had, David Siegel had been very active with that particular beauty pageant and started to court Jackie. And yes, they had eight kids, which is a lot of kids. And so they were living together in what we would consider a very large house. It was like 26,000 square feet.

• 5:46Shankar Vedantam?

  So this 26,000 square foot home in Florida, it had 17 bathrooms, but apparently it wasn't really big enough because they started to imagine building an even bigger house.

• 5:59Speaker 04

  Yes. Well, they said they were just bursting at the seams, which is probably a, you know, they probably have a different standard than a lot of us. But bursting at the seams with 26,000 square feet, and I think they had gone on a vacation to France and seen the Palace of Versailles and decided, you know what? We're going to build a house just like the Palace of Versailles. And I think it was going to be like 90,000 square feet.

• 6:29Shankar Vedantam?

  I want to play you a clip of Jackie walking around the foundation of the house as it's being built. She and David are describing their plans for the home. This is from the documentary, The Queen of Versailles.

• 6:40Speaker 05

  And he says, I want a health spa. And then I said, we need maids quarters. I forgot how many kitchens, 10 kitchens. We have a sushi bar.

• 6:48Speaker 06

  Two tennis courts, one will be a stadium court. Full-size baseball field, which will double as the parking lot when we have parties.

• 6:57Speaker 05

  But this is our ice skating slash roller rink.

• 7:01Shankar Vedantam?

  So life is good. They're clearly living the American dream. What happens next, John?

• 7:07Speaker 04

  Well, the Great Recession starts. And with the Great Recession, well, Lehman Brothers falls and the banking industry is in crisis. And so no loans are going out. So David Siegel, with all of his properties, and in particular, a new property, what, PH Towers in Las Vegas? Well, the bank stopped lending money. And so all of a sudden, there was no money to be had anywhere. So they have to figure out, not only what to do with David's business, but also with this gargantuan house that they were in the middle of trying to construct.

• 7:51Shankar Vedantam?

  I understand that before your academic career, John, you had a previous life in real estate. So you understand well the role that money plays in the real estate business.

• 8:02Speaker 04

  Yeah, so for real estate developers, you know, it takes so long if you're building a shopping center or something like that. These projects are like, they like take 10 years to come to fruition. So I was actually out in Vegas when PH Towers was being built. And a project like that probably had started five years before that when the market was really good. But we were, all of us out at this real estate conference in Las Vegas, were looking at PH Towers and another place that was called City Center and just thinking, well, the market was already falling. How are these things going to survive? I mean, it was, it was a very obvious crisis that was unfolding there.

• 8:49Shankar Vedantam?

  I want to play you another clip from the documentary. This is David San, who was also a vice president of Westgate Resorts, describing the scenario.

• 8:59Speaker 07

  He will tell you that the lenders are pushers. They got us addicted to cheap money. And once we were addicted, they took away our money. And now we're addicts. We have to have that money in order to maintain the company that we built.

• 9:18Shankar Vedantam?

  It's striking, John, the use of the words "pushers" and "addicts."

• 9:24Speaker 04

  It is. I mean, I would argue that he's maybe rationalizing a little bit to deflect some blame. I mean, these are not unsophisticated people. But he is right in the sense that when money is coming to you and it's affordable, the tendency is to think that it's always going to be that way. When, if you take a moment to think about it, you'll understand that, you know, things change.

• 9:49Shankar Vedantam?

  So the stock market is plummeting. It's a, you know, "once in a century" financial crisis, it's called. What happens to this company? And what happens to the Palace of Versailles, the new Palace of Versailles?

• 10:02Speaker 04

  Well, the company can't do anything if it's not getting money from banks, right? They've already put as much of their own money into it as they have. And then they need regular, they're called loan draws, to keep the building going. And without the loan draws, they can't do anything. So they have to lay off all other people. And on a personal basis, the Segal family is looking at this $100 million house that they're building. And they can't move forward on that either because they don't know. I mean, at some point, they tried to sell it while they were going through this cash crunch. But the difficulty is, in a recession like that, nobody has any money. So, you know, they were trying to sell the biggest house in America

• 10:46Speaker 04

  at a time where no one's buying any houses, let alone, you know, a 90,000-square-foot house.

• 11:01Shankar Vedantam?

  I'm wondering what you make of this story, John. In many ways, these people seem so completely out of touch with reality. They have maids and drivers and private planes. And it's hard to feel sorry for them. And yet, there also seems to be something very human about their story.

• 11:14Speaker 04

  It is very human. I mean, they seem like nice people, right? Even though they're living this very extreme sort of lifestyle. At one point in the documentary, a friend of Jackie's, I think, is having trouble making her house payments. And so Jackie sends her, I want to say $5,000, to hopefully save the house. They had had a good run of success, whether however much luck was involved. Things had been working well for a while. And then they just got in over their skis a little bit and didn't think that things would turn against them. And all of a sudden, they had to start making some pretty tough choices as far as things

• 11:57Speaker 04

  to give up and how to keep the house and all those things.

• 12:01Shankar Vedantam?

  So where do things stand right now with this grand house, John? Is it still under construction? What's happened to it?

• 12:09Speaker 04

  It is still under construction. They had paused construction during the financial crisis because they didn't have any money. They had tried to sell the partially constructed house at one point, but no one was buying. But after a few years and once Westgate Resorts was able to move forward and become financially solvent, they began construction again. But Jackie just posted on social media this year that it is still not finished.

• 12:44Shankar Vedantam?

  The story of David and Jackie may seem extreme, but it illustrates many of the psychological traps that affect us all. More on how these traps work and how to avoid them when we come back. You're listening to Hidden Brain. I'm Shankar Vedantam.

• 13:08Shankar Vedantam?

  Support for Hidden Brain comes from Stripe. Stripe is built for whatever comes next because scaling your business model isn't a set it and forget it thing. You want to test, iterate, and launch new pricing plans constantly. With Stripe Billing, you can easily experiment with new subscriptions and launch new usage-based and hybrid pricing models so your revenue model can change as fast as your product and market fit evolve. Reach new customers, expand globally, and keep revenue operations ready for whatever comes next. Stripe Billing powers any business model. It's built to support you no matter how much you scale with a network powering more than

• 13:46Shankar Vedantam?

  1.6% of global GDP and the partner of choice for 86% of Forbes AI 50 companies that have monetized to date. Learn how you can power any business model at stripe.com/billing. Support for Hidden Brain comes from Mazda. Being safer on the road starts with the person behind the wheel. That's Mazda's philosophy when designing every vehicle. Their proactive safety features help keep you more aware, connected, and engaged during every drive, which means your car does more than help protect you. It helps make you a safer driver, which helps protect everyone. That's why Mazda has been named Consumer Reports' safest new car brand. To learn more, visit MazdaUSA.com.

• 14:29Shankar Vedantam?

  Consumer Reports does not endorse products or services.

• 14:36Shankar Vedantam?

  This is Hidden Brain. I'm Shankar Vedantam. John Dinsmore studies financial decision-making at Wright State University. He's also a fan of the hit television show, The Office, where Steve Carell plays Michael Scott, an office manager at a paper supply company whose dreams are much bigger than his reality.

• 14:57Shankar Vedantam?

  In one episode, Michael visits a high school. He's meeting a group of graduating high school seniors whom he first met 10 years earlier when the students were third graders. During that earlier meeting, Michael promised to pay the entire class's way through college. John, you've seen this episode many times and say that it's based on a real-life story?

• 15:21Speaker 04

  Yes, there was a man named Eugene Lang, who was a wealthy investor in New York City, and so he had visited an elementary school in Harlem where he promised those, you know, sixth graders, I guess, that he would pay their way through college. And he had significant resources. He not only followed through on the promise, he put another 16,000 kids through college.

• 15:43Shankar Vedantam?

  Wow. Was the same true for Michael Scott in the fictional TV series?

• 15:48Speaker 04

  The same was not true. Michael Scott wanted to be a hero to these kids, but he had no such resources. But he thought that he would one day. But unfortunately, it didn't work out quite that way.

• 16:00Shankar Vedantam?

  I want to play you a clip from that episode. It's both funny and sad.

• 16:05Speaker 03

  You lied to us.

• 16:07Speaker 08

  Yep, I lied to myself, too. I'm not a millionaire. I thought I would be by the time I was 30, but I wasn't even close. And then I thought maybe by the time I was 40. But by 40, I had less money than when I was 30. Maybe by my 50s, I don't know.

• 16:23Shankar Vedantam?

  John, you say the story is a classic example of optimism bias?

• 16:28Speaker 04

  Absolutely. I mean, we all tend to think that our ship's going to come in, that we're going to get our big break, or we're going to get the promotion. We don't really ever think about that. Life is full of surprises, both good and bad. So, you know, we never think that, you know, maybe we'll get laid off from a job, where about half of workers get laid off at one point or another, or we don't think we're going to get passed over for that promotion. But these things happen. But we, when we think about the future, we never really incorporate those potential negative surprises into our vision of the future.

• 17:13Shankar Vedantam?

  You once saw a documentary about D-Day, which gave you another interesting example of the optimism bias. Can you tell me that story?

• 17:21Speaker 04

  Okay, so the documentary was going through the events of D-Day and then they would flash forward talking to some veterans decades later recalling their experiences. And there was a man who stormed the beach at Omaha and he recalled getting briefed on the mission ahead. And the commanding officer said, look, two out of three of you are not going to make it through this. And he was 18 years old and he looked to the man on either side of him and thought, well, these poor bastards. He never thought that he was ever actually in danger. He thought that, well, the people next to me have 100% chance of not making it through, but I'm going to be fine. And that's very optimistic.

• 18:04Speaker 04

  And the younger we are, the more optimistic we tend to be.

• 18:14Shankar Vedantam?

  Talk about this. There's research that shows that younger people tend to have more of the optimism bias than older people?

• 18:21Speaker 04

  Yes, so the younger you are, the more optimistic you tend to be, the more you think things are going to fall into your favor. And so this is, it's a great thing for perseverance. Optimism is, it's not always great for dealing with finances. It tends to have us bite off more than we can chew.

• 18:48Shankar Vedantam?

  I'm thinking about all the choices that young people have to make. When you're in your late teens or early twenties, you might be deciding to go to college. You might be deciding to take on student loans. You might be a young person just starting out in your first job. And if you actually believe that things are going to be rosier than they actually are, you could be in for a surprise.

• 19:11Speaker 04

  Absolutely. It's at a time where a lot of people, you know, when you're 18, you're thinking about going to college. You're considering student loans. And this is at a time where- I mean, if you're like me, you're not really sure what you want to do. And if you pick a major, you don't know if you'll enjoy it, you'll be good at it, or you'll even work in it. And yet you are having to take out debt to finance this education for something where you may or may not be making enough money to justify the investment.

• 19:44Shankar Vedantam?

  Hmm.

• 19:46Shankar Vedantam?

  I want you to tell me a personal story. I understand that in the fall of 2005, life was coming at you pretty fast. You had just been offered a job in Richmond, Virginia. You'd also met the woman of your dreams in Washington DC. Tell me about your life at that time, John.

• 20:03Speaker 04

  It was a really exciting time. I was working for a real estate development company and I had met Alyssa up at Glover Park in DC. There was a dog park there and we were both walking our dogs. And we started dating in November and it was a bit of a whirlwind romance. And the real estate company wanted to move me down to Richmond, Virginia from DC. And I just, we were on the same page of where things were going between me and Alyssa. So I just assumed she would come and she was fine with it. But she said, you know, I'm not moving to Richmond with my boyfriend, wink, wink.

• 20:43Speaker 04

  So, which was fine. We were, you know, we were both on the same page on that. So we were, we went down to Richmond to look for a house. And separately, I was looking for a ring.

• 20:59Shankar Vedantam?

  So you were hoping to close on a house and then propose to Alyssa. You knew a friend of a friend who was a mortgage broker who was going to help you through this transition.

• 21:10Speaker 04

  Yeah, it was actually one of the owners of the real estate company that I worked for. He recommended a friend to me. So we started going through the process of getting approved for a mortgage. And he said, there shouldn't be any problems.

• 21:28Shankar Vedantam?

  You were also buying a ring. Were you planning to pay cash for the ring, John?

• 21:33Speaker 04

  No. We were actually, I was gonna put the ring on credit, but wanted to wait until the house was bought so as to not have anything extra on my credit report when we were doing the underwriting for the house.

• 21:51Shankar Vedantam?

  All right, so there's a lot going on. You're getting engaged. You're moving to a new city. You're trying to buy a house. You're trying to buy a ring. Tell me what happened next.

• 22:01Speaker 04

  We were about two or three days before closing the house. And then the mortgage broker calls up and said, "Well, there's a problem. And the mortgage that I told you would be able to get, we can't get. So you're gonna need to do something called a no-doc mortgage." And a no-doc mortgage, this is in the height of the housing craze and the housing bubble. It was a mortgage you could get without providing any proof of income.

• 22:31Speaker 04

  And in exchange for not providing proof of income, you were gonna pay a higher interest rate and higher fees.

• 22:45Shankar Vedantam?

  Well, you must have been taken aback at this point because it felt like the rug was being pulled out from under you.

• 22:50Speaker 04

  Yes, I didn't necessarily suspect anything right away. It was more just, okay, well, you know, I don't want to be homeless. And we were supposed to have this house in a couple of days, but felt really stuck. We actually didn't feel like we necessarily had any other option.

• 23:12Shankar Vedantam?

  So there were a couple of moments when you realized that something was off. First, you had your dad look at the paperwork.

• 23:20Speaker 04

  Yeah, my dad was a real estate attorney in Virginia Beach. And so he offered to do the closing. And when we were going through the closing, he noticed, first he noticed the prepayment penalty. And he said, well, these are illegal in Virginia. So you should talk to your underwriter to have it removed. And so, but we, we went ahead because we wanted to close the house. And I can't remember if I ever talked to the underwriter about the prepayment penalty. But we would refinance some years later. And then we got this, you know, mystery check for $3,000 after the refinance, which was refunding the illegal prepayment penalty.

• 24:07Shankar Vedantam?

  So the people you were working with don't seem like particularly nice people, John?

• 24:13Speaker 04

  You could say that. I mean, I, working in real estate development, a lot of times you are swimming with sharks. And it felt at times that I was swimming with sharks. Now, the, the other owner of the company, when he had asked me about how the closing went, and I told him, he got just kind of an annoyed look on his face. I think he immediately smelled a rat and said, you know, next time, let me put you in touch with someone. And that was the first time where I really thought, okay, this was maybe deliberate.

• 24:42Shankar Vedantam?

  So the fact that you ended up not getting the mortgage you thought you were going to get, that you had this last minute switch, how much did it end up costing you over the long run, John?

• 24:52Speaker 04

  Let's see, we had that mortgage for probably about two years. And it, the original, like more normal mortgage was going to be about $2,100 a month. And the no-doc mortgage took us to, I think, $3,300. And so you do the math, a couple of years, it cost us about $30,000.

• 25:10Shankar Vedantam?

  Wow.

• 25:18Shankar Vedantam?

  You talk about a principle known as intertemporal discounting, and it's all about how, in some ways, we imagine that the future is going to be more flush than the present. And this is true when it comes to time. It's also true when it comes to money.

• 25:32Speaker 04

  Yeah, absolutely. So if you take the instance of this no-doc mortgage that I found myself in the middle of, there were a lot of components to it where you look at it and there are fees there that are just getting rolled into the loan. And when something gets rolled into a loan, whether it's a mortgage, or a car loan, or something like that, because it is pushed off into the future and it's bundled with all these other fees, we tend to not really understand how much we're paying for it and how much it's actually costing us.

• 26:07Shankar Vedantam?

  So in other words, if someone were to tell you, you have to pay 500 bucks more today, you might say, well, I don't have 500 bucks. But if someone says you have to pay 500 bucks two years from now, you imagine that your future self is somehow going to be able to come up with that money.

• 26:21Speaker 04

  Absolutely. Well, and it's often the future, too. And so it doesn't really seem like $500, as silly as that sounds.

• 26:28Shankar Vedantam?

  I'm wondering how this speaks to the growing interest in buy-now-pay-later schemes. These are not just credit schemes. These are just schemes that basically defer payments into the future. And there are a whole number of marketers and companies that have sprouted up that allow us to buy seemingly extravagant things today with the promise that we don't have to pay for them today.

• 26:50Speaker 04

  Right. Buy-now-pay-later continues to surge in popularity. And it's really just a reframing of credit cards. But one of the funny things about how inconsistent we are in assessing the cost of debt is that, okay, we're not going to call it credit card. We're not going to call it a loan. We'll just call it buy now, pay later. And that sounds very friendly, even though it's the same thing. And if you look at the interest rates on some of these things, they are as high or higher than an expensive credit card. But because we see it, oh, well, this isn't a credit card. I'm just getting it now and then I'll deal with it later. It shouldn't sway our decision making, but it does.

• 27:35Shankar Vedantam?

  You know, I was reading a New York Times article a few weeks ago, John, and it was about a buy now, pay later company called Klarna. And it used a term that I had not heard before called Klarna maxing. Have you heard this term before?

• 27:49Speaker 04

  I have not heard Klarna maxing. I mean, I think if we go back to like the no-doc loans, of course, it's an absurd notion that we'll lend you $300,000 to buy a house without verifying your income. And that will work for a while. But when the economy turns, and economies go through cycles, that's when a lot of these things come crashing down. Now, I don't know Klarna's specifics in terms of how they deal with this. But if you look at the mortgage industry, their thing was, well, we'll be selling these liabilities off to other people. So I'd be curious to see if they're holding those liabilities or not. Because, you know, once the economy goes in a downward turn, a lot of these people are going to stop making payments.

• 28:36Shankar Vedantam?

  When we come back, more mental traps that can lure us into debt. You're listening to Hidden Brain. I'm Shankar Vedantam.

• 28:54Shankar Vedantam?

  Support for Hidden Brain comes from Planet Visionaries. Professional climber and environmental advocate Alex Honnold hosts Planet Visionaries, a podcast spotlighting the people tackling climate challenges with real, hopeful solutions. Throughout season six, Alex brings together extraordinary change makers for powerful conversations about grit, determination, and the power of hope to fuel our fight for a better future. In partnership with the Rolex Perpetual Planet Initiative, this is Planet Visionaries. Listen or watch wherever you get your podcasts.

• 29:27Speaker 09

  This podcast is supported by Nurtec ODT. Remedy Pant. We know you didn't ask for an interruption, but migraine doesn't wait for the right moment to interrupt either. It just barges in, takes your time, and throws everything off. So when migraine takes your time, take Nurtec. It's for the acute treatment of migraine with or without aura in adults. Nurtec can provide pain relief in two hours, which can last up to two days. Ask your healthcare provider if Nurtec is right for you, because your time is for you, not migraine. Don't take if allergic to Nurtec ODT. Allergic reactions can occur even days after use. Get help right away for trouble breathing, rash, swelling of face, mouth, tongue, or throat. High blood pressure and Raynaud's syndrome can occur. Get help for high blood pressure, numbness, coolness,

• 30:11Speaker 09

  pain, or color changes in fingers and toes. Common side effect is nausea. For full prescribing information, call 1-833-4-NURTEC or visit nurtec.com. All right, back to your podcast, playlist, or whatever's keeping you going today.

• 30:30Shankar Vedantam?

  This is Hidden Brain. I'm Shankar Vedantam. Have you had an experience in your life where you thought you were getting a great deal, only to find yourself mired in debt? Have you found ways to protect yourself from getting in over your head financially? If you have a personal story you'd be willing to share with the Hidden Brain audience, please find a very quiet room and record a voice memo on your phone. Two or three minutes is plenty. Email the audio file to us using the email address [email protected]. Use the subject line "money." Again, that email address is [email protected].

• 31:13Shankar Vedantam?

  John Dinsmore studies financial decision-making at Wright State University. One thing he's noticed is that smart people often think they will never fall prey to debt traps. But while financial smarts and self-discipline can certainly play a role in building good habits around money, some of the mental forces that draw us into debt are wired into the unconscious algorithms in our heads. Becoming aware of them can protect us from problems we didn't see coming.

• 31:43Shankar Vedantam?

  John, I want to talk about a time you and your wife went on a cross-country road trip. It turned into something of an adventure. What was the plan and what happened?

• 31:52Speaker 04

  So it was during lockdown with COVID. And so you couldn't really fly to anywhere. So we had an SUV and it was rated to be able to tow up to 5,000 pounds. So we decided to tow a, to rent a camper and tow it down to Florida to see my mother-in-law.

• 32:17Shankar Vedantam?

  And how did it go?

• 32:19Speaker 04

  Let's see, we're, we're in Dayton, Ohio. By the time we hit Cincinnati, it was overheating. And we still had to get all the way to South Florida. So it was touch and go for most of the time. And then we made it back. It was a good trip, if a little harrowing. We had to buy a lot of coolant for the SUV. And a few weeks after we got back, we were having lunch and we looked out and we just heard a pop. And all of a sudden, there was just auto fluid all over the parking lot. Our car had died.

• 32:57Shankar Vedantam?

  What happened next, John? Did you have to get a new car?

• 33:00Speaker 04

  Well, first, we had it towed to the dealership to have them evaluate it. And they told us, well, it's going to be $14,000 to fix your car. So clearly, we weren't going to do that. So it was time to get a new car. So we went shopping. But unbeknownst to us, the car market during that time was, cars were very scarce. It was very hard to find a car. So even just to find a car was, was an achievement, let alone to, you know, be able to negotiate a decent price and that sort of thing.

• 33:37Shankar Vedantam?

  I understand that you found a car that was supposed to be extremely reliable.

• 33:42Speaker 04

  Right. After our SUV had died, we really wanted to, and we had loved the SUV, but it was not the most reliable. So this time, we were going to go for a brand known for reliability. And because cars were so scarce, we saw them roll one off of the truck and we literally just said, we'll buy it. Because it was the only car that the dealership had.

• 34:08Shankar Vedantam?

  I understand that they told you that this was the kind of reliable car that people give to their grandchildren. So this was a pitch that the car was going to be super safe and last for a very long time. But as the paperwork was coming together, they decided to suggest adding a little protection to the car.

• 34:27Speaker 04

  Right. When they were trying to convince us to buy the car, it was all about safety and reliability. That this, you know, you can't kill these cars, essentially. And so we committed to buying, we get through the paperwork for buying the car, and then came the pitches for all the add-ons. And so what was this car is indestructible turned into, but if something goes wrong, it could really ruin you financially. So you're going to want to buy all these extended warranties and protective coatings and all these things.

• 35:01Shankar Vedantam?

  Did you wonder if this car is so reliable, why are they asking me to buy all these warranties?

• 35:07Speaker 04

  Right, yeah. I was, I thought, am I crazy? Like, five minutes ago, you were talking about how this thing was the best car on earth. And now it was, boy, you got to watch out. This thing really could set you back if it breaks down.

• 35:22Shankar Vedantam?

  So talk about this idea, because this happens all the time when people buy products. They are rated extremely safe, extremely reliable. But at the point at which people are pulling out their credit cards, we're often told that we should buy an extended warranty. We should buy insurance, effectively, to protect the car from, from its own destruction. Talk about the psychological factors that this kind of marketing is playing on, John.

• 35:44Speaker 04

  Right, so there's a phenomenon known as loss aversion, right? That we hate losing much more than we love winning. And so this is why we typically, if we have stocks that are investments that are gaining, we tend to sell them too early. And if we have investments that are losing, we tend to hold on to them because we just don't want to lose. If we just hang around long enough, it'll come back and it won't be a loss. Well, this also manifests itself in things like buying unnecessary warranties and that sort of a thing. And all of a sudden, you know, buying an extended warranty for however many thousands of dollars for your car, which might have seemed absurd 30 minutes ago, starts to have some appeal to it because, well, for most people, you know, the car is the second biggest

• 36:29Speaker 04

  purchase they ever make in their lives behind a house. So you don't want that to turn into a loser. So you're willing, a lot of times, to take on the extra expense of these extended warranties.

• 36:41Shankar Vedantam?

  We talked earlier about the disconnect between our present selves and our future selves. You say this plays into a concept called expense prediction bias. What is expense prediction bias, John?

• 36:54Speaker 04

  Expense prediction bias goes to the fact that we all have too many expenses in life. And so to actually try and keep some sense in your head of what your expenses are is nearly impossible. Now, we are able to quantify in our heads what they call regular expenses. Regular expenses happen at the same time every month for the same amounts. So your mortgage, you're going to remember that. Your electric bill, you're going to remember that because they happen at the same time for the same amounts. But most of our expenses are actually irregular, right? Car repairs, travel, entertainment, healthcare, they happen every month, but they don't happen at the same times and for the same amounts.

• 37:37Speaker 04

  And so when we try and quantify these things in our heads, we massively underestimate what our actual expenses are. And so when we're looking at taking on debt or making a big purchase that requires financing, we tend to dramatically underestimate our ability to pay for things.

• 37:53Shankar Vedantam?

  So this is not so much something that marketers are doing to us. It's just something that we are doing to ourselves. In some ways, we are, we are overestimating our capacity to pay for our debts in the future.

• 38:04Speaker 04

  Right, we are all at a disadvantage when trying to figure these things out. And it's not because we lack intelligence or background. It's just, there's just too many things to be able to keep straight in your head. So if you're trying to make an itemized list of all your expenses, you're not going to be able to do it.

• 38:28Shankar Vedantam?

  One idea that we have circled around over and over in this conversation, John, is the idea of self-control. And of course, we've talked about self-control previously on Hidden Brain, but talk about how self-control affects our ability to deal with debt and to handle our expenses.

• 38:45Speaker 04

  So self-control is something that enables us to be able to hold off committing to something. But we tend to think of self-control as being a stable personality trait, when actually it's a reflection of where we are in the moment. Over the course of a day, a lot of times, if we're dealing with a lot of complicated issues or facing some difficulties, our self-control can actually degrade over the course of the day. So even if you are a very disciplined person, you still are going to find yourself in moments where maybe you are more impulsive than maybe you normally would be.

• 39:26Shankar Vedantam?

  I understand there was one study where gamblers were offered a drink at a casino, and it changed how they behaved subsequently?

• 39:35Speaker 04

  Right, so if you've ever been to Vegas or to any casino, the adage is that once you start winning, then free drinks start coming to you. And people see that for what it is, right? A chance to maybe degrade people's judgment and have them make bigger bets than they normally would. But a study found that even offering a drinker a drink and them saying no, the act of resisting that degraded their decision-making going forward.

• 40:14Shankar Vedantam?

  I want to talk about the role of compound interest, John. Many of us have learned about compound interest in school or college, of course, but there's something about compound interest that always feels unintuitive, that it feels difficult to wrap our minds around.

• 40:30Speaker 04

  Right. There's a quote that's often attributed to Albert Einstein, which is, "Compound interest is the eighth wonder of the world." And the reason why it's a mystery to so many people is, interest is a price on money. And it's, most prices we encounter is something that we incur once. But compounding interest is a price that is applied to the amount of money that you borrow, and it's reapplied constantly. And over time, as interest rates are applied again and again, it becomes exponentially more expensive than we would anticipate. So, most people do not understand the true effects of compounding interest.

• 41:13Shankar Vedantam?

  How does this affect our ability to deal with debt? Because so much of debt, of course, is about compound interest. And sometimes, you're not just paying interest on the principal that you borrowed, sometimes you're paying interest on the interest.

• 41:25Speaker 04

  Correct. So, if you would ask, let's say, someone who's looking to buy their first house, and let's say it was a $200,000 house, let's say 6%, if you ask the person how much interest they would pay on their loan, they might say, well, 6%, $200,000. Okay, that's going to be $12,000 of interest. No, it's actually about $232,000 of interest on top of the $200,000, right? But like with trying to predict our own expenses, there's just too many components to it, and the price is applied too many times for someone to have a real grip on how much it's costing them.

• 42:04Shankar Vedantam?

  One of the things that you talk about is the role of rewards programs and how they hijack our brains desire to pursue financial goals. Talk about this. Everything from airline miles to getting the 10th coffee free once you buy nine coffees at the local cafe.

• 42:22Speaker 04

  So if we're going to go with the example of, say, a free 10th coffee after you buy nine, research shows on rewards programs that not only will that reward program keep you loyal to that cafe, but you will actually increase the frequency of your visits to that cafe as you approach receiving the reward. So that's coffee. But if we're looking at credit cards and, say, miles for travel and that sort of thing, you also find that people increase their purchases and the size and frequency of their purchases as they get closer to some milestone reward, say, like a free plane ticket or something like that.

• 43:01Shankar Vedantam?

  Do you have a personal example of doing this yourself, John?

• 43:05Speaker 04

  I will say on the retail side, in Ohio, there's Grater's Ice Cream, which I think they're nationwide now, but they're from Cincinnati. And they give you a free ice cream on your birthday. And even if I've already had ice cream cake and I'm not hungry at all, I make such a point of getting to Grater's to have my free birthday ice cream, even if it makes me ill. So I am as susceptible as anyone.

• 43:33Shankar Vedantam?

  So it's interesting, when we cash in on these benefits, when you get the free ice cream that you don't want on your birthday, or you get the 10th cup of coffee, we view these as financial windfalls, but in fact, we're the ones doing the paying.

• 43:55Speaker 04

  Absolutely, right. But you get this reward, right? Winning prizes is fun. Now, if you put it in the credit context, these rewards are harmless if you pay your balance off every month. But I think it's like two thirds of credit card holders carry balances forward. So for what would be a $200 or $300 round trip ticket, people end up paying thousands of dollars in interest for it.

• 44:18Shankar Vedantam?

  We've talked a lot about how our brains work against us when it comes to financial decisions. But it's not just that we have these biases. It's also that money itself does something to us. It changes how we behave. You ran a study once about hormone levels and financial status. Describe the study to me and what you found.

• 44:35Speaker 04

  OK, so we took a control group and a treatment group and had everyone give saliva tests to measure their testosterone. And then one group, we had them handle just stacks of paper and the dimensions of dollar bills. The other group, we had them handle stacks of $20 bills. And the people who handled $20 bills experienced a rise in testosterone when they handled money. And that rise in testosterone made them more aggressive and more self-focused and less likely to donate to charity.

• 45:08Shankar Vedantam?

  Why do you think this happens, John? Why is handling money versus handling paper that's the same dimensions, the same size as money? Why does it have this effect on us?

• 45:19Speaker 04

  So this study is done in a field known as evolutionary psychology. Evolutionary psychology looks at what are behaviors endemic to humans that maybe go back to when we were living in caves? So when we were living in caves, the more status you had amongst the other cavemen and women, the more resources flowed to you, the less cooperative you had to be and the less you had to consider others. Well, back then, status was probably about, you know, physical dominance. Now, status is more determined by economic resources. So people handling large sums of money experience a rise in testosterone

• 46:04Speaker 04

  and they become more focused on themselves and less concerned with others.

• 46:10Shankar Vedantam?

  Do you think most people have a good sense of how their own minds are working when it comes to debt and money, John?

• 46:16Speaker 04

  Probably not, right? There's lots of things that we that influence us without our knowing it. I mean, as someone who does research on marketing and reads lots of research on marketing, you see things that, you know, tiny influences that change people's preferences and choices without them being willing to acknowledge that it does affect them. So, you know, if you look at, well, when we talked about intertemporal discounting, how you time things can lead to what you call a preference reversal. In scenario A, people want the first choice, but you take that same person and you put them in a different context and they they want different things.

• 46:59Speaker 04

  If you ask people to choose the best option versus eliminate the worst options, they end up making different choices. You know, what is the default choice within an array of options usually carries a lot of power? One of my favorites was Starbucks introduced the Trenta, I guess, which is the extra-large coffee. And it didn't sell a lot of Trentas. What it actually did was it sold a lot of what used to be the large coffee because all of a sudden it seemed like a more moderate option, even though it was still 20 ounces or whatever it was, because it was no longer the extreme or endpoint option, they viewed

• 47:42Speaker 04

  it as moderate, so more people started buying it.

• 47:46Shankar Vedantam?

  I mean, in some ways, what you're saying is that marketers are taking advantage of these natural gremlins that are in our heads.

• 47:53Speaker 04

  Yes, I mean, and we are required to make decisions about and pass judgment on things that we can't be experts on. There's too many things to make choices about, and because of that, we tend to look for little signals to guide our choices, just so that we feel like it's based in something. And a lot of times, those little signals that we seize on are irrelevant.

• 48:22Shankar Vedantam?

  It's nice to believe that being good with money comes down to basic literacy. Learn how to crunch some numbers, make a budget, and exercise a little discipline, and you'll be good. But often enough, financial literacy is not enough to combat the biases that shape our decisions and the marketers who know how to take advantage of our mistakes.

• 48:43Shankar Vedantam?

  When we come back, strategies for fighting back. You're listening to Hidden Brain. I'm Shankar Vedantam.

• 49:01Speaker 09

  This podcast is supported by Nurtec ODT. Remedy Pant. We know you didn't ask for an interruption, but migraine doesn't wait for the right moment to interrupt either. It just barges in, takes your time, and throws everything off. So when migraine takes your time, take Nurtec. It's for the acute treatment of migraine with or without aura in adults. Nurtec can provide pain relief in two hours, which can last up to two days. Ask your healthcare provider if Nurtec is right for you because your time is for you, not migraine. Don't take if allergic to Nurtec ODT. Allergic reactions can occur even days after use. Get help right away for trouble breathing, rash, swelling of face, mouth, tongue, or throat. High blood pressure and Raynaud's syndrome can occur. Get help for high blood pressure, numbness,

• 49:45Speaker 09

  coolness, pain, or color changes in fingers and toes. Common side effect is nausea. For full prescribing information, call 1-833-4-NURTEC or visit Nurtec.com. All right, back to your podcast, playlist, or whatever's keeping you going today.

• 50:01Speaker 10

  With the Discover Cash Back Card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5% cash back at different categories each quarter on up to $1,500 in purchases. That's 5% cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to discover. Terms apply. See discover.com/5 for details.

• 50:31Shankar Vedantam?

  This is Hidden Brain. I'm Shankar Vedantam. Have you had an experience in your life where you thought you were getting a great deal, only to find yourself mired in debt? Have you found ways to protect yourself from getting in over your head financially?

• 50:48Shankar Vedantam?

  If you have a personal story you'd be willing to share with the Hidden Brain audience, please find a very quiet room and record a voice memo on your phone. Two or three minutes is plenty. Email the audio file to us using the email address [email protected]. Use the subject line "Money." Again, that email address is [email protected].

• 51:15Shankar Vedantam?

  We're taught that being good with money is about making smart choices. Spend less, save more, avoid debt. On paper, that's true, but real life isn't a spreadsheet.

• 51:28Shankar Vedantam?

  In his book, "The Marketing of Debt: How They Get You," John Dinsmore says that being good with money isn't just about knowing what to do on paper. It's also about resisting the forces that lure us into self-sabotage.

• 51:43Shankar Vedantam?

  John, when you buy a house, you're not only thinking about how much it costs, you're also thinking about home inspections and repairs and the quality of local schools and whether you're going to get along with your new neighbors. Can you talk about the role of exhaustion when it comes to the financial mistakes we make?

• 52:00Speaker 04

  Yeah, and housing or buying a house is probably the best example of it. There are so many things to do, and it's such an important purchase in someone's life. All of these things make it what psychologists would call like a depleting process, right? And the more complex something becomes, the more energy we have to dedicate to it, the greater likelihood that we're going to have a breakdown in our self-control.

• 52:28Shankar Vedantam?

  The psychologists Donna Webster and Ari Kruglansky refer to this as seizing and freezing, where we basically have a desire to bring the process to a conclusion because we're so tired, we're so exhausted.

• 52:39Speaker 04

  Yes, so and what the seizing and freezing refers to is when you're not sure what's important, you will seize upon one piece of information and then you will freeze out everything else. So because you're so glad to bring things to resolution that a lot of times you're unwilling to consider new information that would help you make a better decision.

• 53:07Shankar Vedantam?

  I'm wondering if the same thing happens when people buy cars. You know, the process starts out being very fun. You're taking the car for a spin. You're being told about all the nice things about the car. You get the feel of a new car, the smell of a new car. It's all very exciting. But then after you've spent an hour exploring how fun the car is, the process of actually negotiating the purchase of the car begins, including financing terms and a whole bunch of other things.

• 53:33Speaker 04

  Absolutely, and chances are this was not the first dealership you were at that day, right? You've been looking for a while and doing this again and again. And at some point, I mean, it could even be that the car you choose is the result of exhaustion and a breakdown in self-control. But even if it's not, then you get into being offered all of the extras and all of these options. And, you know, it makes it harder and harder to make good decisions going forward.

• 54:04Shankar Vedantam?

  And of course, the vast majority of new cars are financed. So now you actually have to negotiate the terms of an auto loan. Is it four years? Is it five years? Is it six years? They're different interest rates. They're different monthly payments.

• 54:15Speaker 04

  Absolutely, and if you haven't done your homework, and a lot of times people haven't, it means you could take on more expensive loans than you would have to otherwise.

• 54:28Shankar Vedantam?

  What can we do to resist getting sold something we don't really want or need when we are exhausted, John?

• 54:36Speaker 04

  Well, I think there's a few things that you can do. So, well, one thing is you can take a break. You can defer. So if we're going with the car scenario, when they start trying to sell you all these add-on things, you can say, you know what? Can I come back to you later? Let's move forward right now, but can I come back later? This will give you a chance to take a break. It will also put off the salesperson. The salesperson will always tell you that you can change your mind later about the warranties or whatever. But in the meantime, it'll help you just get past that hard sales pitch. And another thing that you can do is if you're starting to feel too exhausted and you find yourself focusing on being exhausted and maybe, God, I'm so tired, right?

• 55:20Speaker 04

  A lot of times it's helpful just to walk outside and give yourself a little pep talk. Studies have shown that the more you perseverate on being in a weakened condition, the more weakened you actually become. But if you can actually, you know, give yourself a pep talk and tell yourself that you can do this and take a little time to compose yourself, you're going to make better decisions.

• 55:51Shankar Vedantam?

  Many complex financial deals involve doing math, and many people hate doing math. One study looked at brain scans of people as they were doing difficult math problems. Tell me what it found, John.

• 56:04Speaker 04

  So one study did an fMRI of people who said they had math anxiety and asked them to do math problems, and it lit up the threat detection centers of their brain. So it was like they were being chased by a tiger because they were so intimidated and overwhelmed at the notion of doing math, which, if you're dealing with financial questions, can be a real problem.

• 56:35Shankar Vedantam?

  I mean, I've often received documentation for various things and the documentation runs for five pages and there's fine print and all kinds of numbers and it's not surprising in some ways that your brain seizes up and says, oh, my God, this is the last thing I want to be reading and thinking about.

• 56:51Speaker 04

  Absolutely, and we all know the phrase, stress makes you stupid. It doesn't actually make you stupid, but it does limit your abilities. You're not as capable as you normally would be to deal with issues like home loans.

• 57:07Shankar Vedantam?

  Talk a little bit about how marketers take advantage of our desire for simplicity, John.

• 57:12Speaker 04

  As a marketer, typically, if you want to really highlight something and get people to understand and remember something, you make things as simple as possible, right? And pricing for financial products is not simple. In fact, there's usually multiple components of price, different fees and that sort of thing. So what marketers of debt will sometimes do is put a very attractive price upfront and because we will take that simple piece of information and block out everything else, then, you know, deep in the fine print or other parts of the website or wherever, you'll see all the kickers that actually escalate the expensive things. But they will make us feel like we understand something when we actually don't.

• 57:57Shankar Vedantam?

  So in other words, I'm told that something has a 0% introductory rate and I focus on the 0% and not on the word introductory.

• 58:05Speaker 04

  Right. We will walk away thinking of 0%, despite the fact that that's only good for, say, three months and then it goes up to 27% or something like that.

• 58:13Shankar Vedantam?

  Is this related to the idea called partition pricing, John?

• 58:17Speaker 04

  Yes. So partition pricing is where people, where a product has multiple components of price, right? So if you think of it, if someone is shopping for shoes in the mall and they see that the shoes are $55 to take home, but you're shopping on a website and the shoes are listed as $50 plus $10 shipping, people will often go for the $50 shoes that actually cost them $60 because they see that first price and that's how they encode it and they think of that as being cheaper than the $55 shoes in the mall.

• 58:52Shankar Vedantam?

  So in some ways, it's a little bit like a magic trick. If you're a marketer, partition pricing allows you to hide the real cost of the item.

• 59:00Speaker 04

  Yes, we typically can only encode one price for a product in our memories. So we see the one price and then we stop looking for other things or don't take other things into account.

• 59:11Shankar Vedantam?

  How do we get around this problem? How do we, given the fact that we have these limitations, that we focus on things that are right in front of us, we have this desire for simplicity, we don't like to do math, how do we solve this?

• 59:25Speaker 04

  I wish I had a more attractive answer for you, but the answer is to do the math and to do the work. If you're aware of these biases or shortcomings, you're more likely to be able to process them and deal well. I mean, one of my, one of the studies that I came across was from a couple of economists named Stango and Zinman. And what they found was the price that people pay for debt, the biggest factor is how much effort people put into shopping for debt. It's not your credit score. We tend to think of credit scores as something, you know, that comes down from heaven, and it is what it's gonna be, and that's the price we pay for things. It's, it's more about effort and shopping around and finding competitive pricing.

• 1:00:09Shankar Vedantam?

  In other words, if someone offers you a loan or a mortgage, make sure that you are doing some price comparisons to make sure that there isn't another loan next door that's, that's a better rate for you.

• 1:00:21Speaker 04

  Absolutely. I mean, my story about buying the house, the truth is, we probably, we did have options. We could have shopped around, but we felt like we couldn't. Some years later, we're living in Ohio and we go to refinance our house here, and we dealt with a mortgage broker who, at the last second, wanted to introduce an extra $1,500 fee, and we just walked because we knew better. I mean, we had learned the hard way, and we found a mortgage with a lower interest rate as a result from walking away.

• 1:01:03Shankar Vedantam?

  One of the phenomena that you have studied is something called the endowment effect. We've talked about this previously on Hidden Brain. Talk about the role of the endowment effect in debt and how we can deal with it as consumers.

• 1:01:16Speaker 04

  Okay, so the endowment effect, again, we hate losing much more than we love winning. So if you look at the Queen of Versailles example, at some point where things start to go south with the tower in Vegas, all of the associates of David Siegel are saying, why don't you just sell this tower? This would solve all of our problems. And he refuses to. It's his, he tends to think it's more valuable than it is, and you know, the market will tell you what it's worth. And so he holds on to it and holds on to it, creating lots of financial stress for everyone. And the tower ultimately gets foreclosed upon a couple of years later.

• 1:02:00Speaker 04

  Because it was his and it was so valuable to him, he wouldn't make what was, to everyone else, a very obvious and common sense decision of getting rid of this thing that you couldn't afford.

• 1:02:13Shankar Vedantam?

  I mean, there have been multiple studies that have been conducted that show that if you give somebody even, you know, a trivial thing, a trinket, a pen, an eraser, within seconds, they start to assign value to that pen or that eraser, so that if they were to part with it, they would want to be compensated for parting with this thing. And in some ways, it's the endowment effect again, that once you have something that's part of your endowment, part of your property, if you will, you tend to want to guard it zealously.

• 1:02:43Speaker 04

  Yes, and even if that thing is draining you of all of your resources. But because it's yours, you think it's more valuable than anyone else does, and so you tend to hold on to it when you shouldn't.

• 1:02:54Shankar Vedantam?

  Now, one of the interesting ideas you explore, John, is that we can sometimes use the endowment effect and loss aversion to our advantage, especially when it comes to retirement savings. How so?

• 1:03:06Speaker 04

  So there's an ability to take a lot of these phenomena and kind of turn them around and use them to help you, right? So with the endowment effect, when you get money, it's harder to let go of that money. So if you're looking at something like saving for retirement, once the money hits your account, if you have to actually then write a check to put money into a savings account or a retirement account, you become less likely to do so. A reason why social security has been such a successful program is because it is money for retirement taken out of people's checks before they get them, right? So you can do this for yourself by having automated savings, whether it's a college

• 1:03:47Speaker 04

  fund for the kids, your retirement, or just savings in general, and have the money taken out of your check before it gets to your account. And when that happens, people don't miss the money as much as they would if it had hit their account, and they find that over time, they're able to save a lot more as a result.

• 1:04:07Shankar Vedantam?

  In other words, if my salary is, let's say, $1,000, instead of having the $1,000 come to my account and then have to write a check for $200 to my savings or to my retirement account, what you're saying is it's helpful to set things up so that that $200 gets deducted upfront, and I only receive a salary of $800, and I don't think of that $1,000 as my endowment now, I think of it as just 800.

• 1:04:34Speaker 04

  Right, right. And probably most people have had the experience of you get a raise and you think, all right, but I'm still going through all my money. And it's because when the money comes into your account, there's always something that's legitimate that's there to have money to be spent on. But the truth is, if it's put away in an account, a savings account away from you, you're going to figure out how to make do on the money that you have.

• 1:05:13Shankar Vedantam?

  Talk about the role of status branded credit cards, John. How do they work and what should we do about them?

• 1:05:19Speaker 04

  So if you think back to the American Express Gold Card, which was the real first status branded card, it was a massive success. It immediately became this status symbol in the culture, right? And so what credit card marketers figured out was, wow, people really like these things. So over time, most of your credit cards became diamond or sapphire or platinum or whatever. And what we found, what studies have shown is that, and this includes credit cards to people with bad credit, with few resources. And what studies have shown is that if you are someone who feels like you're lacking status, like having less money, but you have a status branded card,

• 1:06:02Speaker 04

  you have a tendency to use this card a lot more, particularly if you're using it in front of people whose opinion of you you value.

• 1:06:12Shankar Vedantam?

  In other words, I might not actually have the ability to pay for this super expensive restaurant meal, but I feel good to pull out this flashy credit card and drop it on the table and pick up the check.

• 1:06:24Speaker 04

  Absolutely, right? You're sending a strong signal to the people around you, to the people whose opinion you care about. It would be, otherwise, would it be like having a Ferrari and never taking it out of the garage? It's a beautiful fast car, yes, but a reason for having a Ferrari a lot of times is so that other people can see you in a Ferrari. And status branded credit cards can be a lot like that.

• 1:06:49Shankar Vedantam?

  I mean, in some ways, it's a genius marketing move, isn't it? Because it's taking advantage of this desire we have to look perhaps wealthier and more successful than we actually are in the eyes of other people.

• 1:07:00Speaker 04

  Absolutely. I mean, there's a lot of aspirational marketing, you would call it, right? For people who may not have the resources, but who can have this thing that makes it look like they do. And I don't know if branders of credit cards thought more about it other than people like this brand will put this brand on every card. But over time, the data should show them that people with lesser means are using these types of cards more often and more than they can afford.

• 1:07:32Shankar Vedantam?

  What do you think people should do with their status branded credit cards?

• 1:07:36Speaker 04

  Well, the flip side of it is studies have also shown that if you have a credit card that's branded with some sort of value brand, like say, you know, Goodwill or Walmart or something like that, that it reverses the effect. So I'd be less enticed by a platinum card and more enticed by a card that maybe communicates financial good sense.

• 1:08:08Shankar Vedantam?

  You know, there's an irony here, John, which is I think the people who might be most drawn to status branded credit cards are often people who want to show that they have status, and it's probably because in some ways they don't feel like they have status, whereas people who actually might be wealthy or well off might have less need to demonstrate their status either to themselves or to others. And so precisely the people who need to get the thrift branded credit cards are not the people who are actually getting them.

• 1:08:37Speaker 04

  Correct. Yes. So if you feel like you're lacking in status, it may be that this credit card and just the way it's branded may be one of the, maybe the only signal of status that you can send out to people, so people of lesser means will gravitate towards them.

• 1:08:55Shankar Vedantam?

  We talked earlier about the optimism bias. We assume the future will be better than the present, and therefore we'll have more money in the future. You said that one way to combat this kind of bias is to seek examples that run counter to it. How would we do this?

• 1:09:12Speaker 04

  Right. So psychologists refer to it as counterfactual thinking. So any kind of bias, whether it's optimism or anything else, what's helpful is to challenge yourself to think of something that is the opposite, or like an example that is the opposite of what you're currently thinking. So if you're thinking to yourself, "Well, I'm going to have lots of disposable income in the future," you know, ask yourself, "Well, have you ever had disposable income?" Right? So these are ways to challenge your notion of the future. If the past or the present can't provide you with any examples of what you're imagining

• 1:09:53Speaker 04

  for the future, well, then that will help you have a more restrained or rational approach to things.

• 1:10:00Shankar Vedantam?

  Is basic financial literacy something that could help us here, John?

• 1:10:05Speaker 04

  Absolutely. I think about 25 states have made financial literacy part of high school curricula, which is great. Financial literacy helps. It's certainly better to know than to not know. The other part of it is the effects of financial literacy can fade over time. So it's always worthwhile, if you're approaching a significant financial decision, to either reacquaint yourself before you do that, or to get help from someone who is dealing with those types of decisions all the time.

• 1:10:37Shankar Vedantam?

  In other words, if you're buying a house, for example, maybe spend 15 bucks and buy a book that basically says, here are financial tips on how you can buy a house.

• 1:10:46Speaker 04

  Right, absolutely. And on the other side, the lenders, they live in financial decisions. So they're going to have an inherent advantage. So you need to kind of bone up. Even if you've already read that book, it's good to refresh yourself before decisions like this.

• 1:11:08Shankar Vedantam?

  I'm wondering, with all that you have learned about financial decision making, John, have you made better financial choices in your own life as a result?

• 1:11:19Speaker 04

  Well, the worst decisions that I've made often have been because I felt helpless, or that maybe I... being afraid to ask for help, I think, is part of it, too. Convincing myself that I understood something when I really didn't. Often, and I don't think I'm alone, it's embarrassing to ask for help sometimes, but what's more embarrassing, losing $30,000 on a mortgage, or asking a friend to look at something for you?

• 1:11:53Shankar Vedantam?

  One of the themes underlying how we think about money is our aversion to doubt. We don't like to question our assumption that, of course, we'll be making more money a decade from now. We don't want to sit with questions about how much we're actually paying in interest on our dream home. It's uncomfortable to ponder the prospect of future car repairs, so we agree to the expensive warranty that the salesman is pushing. What we crave is certainty in money, in love, and in many other dimensions of our lives. But are there times we should be embracing our doubts?

• 1:12:32Shankar Vedantam?

  We recently heard a powerful story from a listener named Suzanne. She called in to tell us about a time when she went to get a routine flu shot at her pharmacy.

• 1:12:42Speaker 11

  During the pandemic, I went to my pharmacist for my flu shot. And I looked at her and she looked so tired. And I said, you know what? Even though we have an appointment, it's late at night. I'm sure I'm your last patient. Let me come back tomorrow. However, she said, no, no, I've got time.

• 1:12:58Shankar Vedantam?

  Suzanne had to make a decision. She was worried the pharmacist was fatigued. Was it wise to proceed? Could something go wrong?

• 1:13:06Speaker 11

  My intuition was step away. She wasn't in a good place to give me the shot. But I wanted to be a pleaser and not contradict her ability to help me out at that time with our appointment.

• 1:13:21Shankar Vedantam?

  You've probably had moments like this. A voice of doubt creeps into your mind and you have a quandary. Should you listen to your doubts or push them aside in favor of certainty? Suzanne decided to ignore her doubts. She agreed to stay to get the flu shot.

• 1:13:41Speaker 11

  And I said, you want me to sit? And she said, no, I can, I can just stand above you. I was going to face a certain direction. And she placed the needle into my rotator cuff,

• 1:13:54Speaker 11

  which left me screaming. And she said, relax, relax. I'm, I feel like I'm going to break the needle off.

• 1:14:03Speaker 11

  Well, she completely tore my rotator cuff, which has been a problem that's plagued me since the pandemic. And I've done all sorts of medical interventions, but it was a very bad situation that has led me to difficulty.

• 1:14:23Shankar Vedantam?

  We're often told, "Don't be a doubting Thomas. Plunge in, full speed ahead." But there are times when taking a pause and listening to our doubts can help us make better decisions. How can we identify the moments when doubt is our friend? That's when we come back. You're listening to Hidden Brain. I'm Shankar Vedantam.

• 1:15:00Speaker 09

  This podcast is supported by Nurtec ODT. Remedy Pant. We know you didn't ask for an interruption, but migraine doesn't wait for the right moment to interrupt either. It just barges in, takes your time, and throws everything off. So when migraine takes your time, take Nurtec. It's for the acute treatment of migraine with or without aura in adults. Nurtec can provide pain relief in two hours, which can last up to two days. Ask your healthcare provider if Nurtec is right for you, because your time is for you, not migraine. Don't take if allergic to Nurtec ODT. Allergic reactions can occur even days after use. Get help right away for trouble breathing, rash, swelling of face, mouth, tongue, or throat. High blood pressure and Raynaud's syndrome can occur. Get help for high blood pressure, numbness, coolness, pain, or color changes in fingers

• 1:15:45Speaker 09

  and toes. Common side effect is nausea. For full prescribing information, call 1-833-4-NURTEC or visit nurtec.com. All right, back to your podcast, playlist, or whatever's keeping you going today.

• 1:15:59Speaker 10

  With the Discover Cash Back Card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5% cash back at different categories each quarter on up to $1,500 in purchases. That's 5% cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to discover. Terms apply. See discover.com/five for details.

• 1:16:29Shankar Vedantam?

  This is Hidden Brain. I'm Shankar Vedantam. Whether at work or in politics, we tend to prefer people who are decisive, who never appear to question their own thoughts or actions. But is that always a good thing?

• 1:16:51Shankar Vedantam?

  At the University of Virginia, Bobby Parmar studies the science of the unknown. He joined us for a recent episode titled, "Trusting Your Doubt." Today, he returns to the show to respond to listener questions about the science of doubt. Bobby Parmar, welcome back to Hidden Brain.

• 1:17:09Speaker 12

  Thanks so much for having me, Shankar.

• 1:17:12Shankar Vedantam?

  Bobby, we talked in our last conversation about how the human mind is hardwired to prefer certainty. We don't like the feeling of doubt. Why is it that our brains are built like this?

• 1:17:23Speaker 12

  You know, for so many of us, certainty feels so good. There's just this great feeling that we get when we can predict what's going to happen, when we've mastered our environment or the way that we think about things matches the world in which we find ourselves. And certainty requires very little cognitive effort. There's a lot of research that shows that we find cognitive effort costly and aversive. You know, it almost feels painful to exert cognitive effort. Psychology is a science. Unlike physics, we don't have lots of laws. But one law we do have is the law of least work, which is the idea that if there are two options and they both have the same amount of reward,

• 1:18:08Speaker 12

  most organisms are going to choose the option that requires lower effort, lower physical effort, lower cognitive effort.

• 1:18:15Shankar Vedantam?

  You've given your students different scenarios where they have to grapple with their own doubts. One was a thought experiment involving an airline pilot and whether he should be allowed to fly a plane. Talk about the scenario and what it tells us about doubt and decision making.

• 1:18:30Speaker 12

  One of the ways in which we train our students to make better decisions under conditions of uncertainty is to give them practice in lots of different types of examples. And so this is an example that we've used in the past as an exam case or as a classroom discussion, where there's a pilot for an airline. And through his own routine testing in his personal life, discovers that he has the gene for hunting disease. And this is a disease that basically causes the neurons between the brain and the muscles to atrophy. And so sometimes patients can lose control over their bodily movements. Sometimes it can happen very gradually. Other times it can happen very suddenly. And the pilot discloses this information on social media and then takes it down.

• 1:19:12Speaker 12

  But you, as, let's say, a leader in this airline, learn about this and now you have to figure out what to do. Do you allow this person to continue to fly? Do you take them out of the cockpit? Do you put in, you know, safety protocols? How do you handle a situation like this?

• 1:19:28Shankar Vedantam?

  And I'm assuming it's a little tricky because health information is confidential information, is it not?

• 1:19:34Speaker 12

  Absolutely. And particularly information around someone's genetics. We have laws that prevent the use of that in a work setting. But one loophole in the law is if someone discloses that information on social media. So companies are allowed to use that information if you voluntarily disclose that information. And so now, now you're in a position where legally you can use this information because this person has disclosed on social media. But morally, you're not sure if this is the right thing to do for the pilot, for your company, for passengers. And it's a really tricky scenario because we can interpret it in multiple ways. What is our primary responsibility or obligation here? Is it to protect our passengers? What do we owe this pilot?

• 1:20:18Speaker 12

  Privacy, transparency, care? And students really struggle with the uncertainty and the doubt in, in this kind of scenario.

• 1:20:28Shankar Vedantam?

  Hmm. I understand that some students reach for a very quick conclusion while others are willing to sit with the doubt and uncertainty a little longer.

• 1:20:37Speaker 12

  Yeah, and you can really see it in the way that they respond to the scenario. So some students will very quickly say, look, I don't think we should have this information. I feel bad about the situation. I'm going to allow him to fly and I'm not going to pay attention to the fact that I learned this information. It's a very quick intuitive reaction that they then justify by picking a couple of pieces of information that are aligned with their gut feeling. Other students are able to examine the situation from multiple perspectives, thinking about perhaps what policy should the airline have regarding genetic testing in the future? Thinking about what does it mean to protect this particular pilot and his interests and his, you know, goals for his career?

• 1:21:21Speaker 12

  And what they're able to do is to generate a set of solutions that are sensitive to all of those different aspects of the scenario. They've, I don't like to use the phrase sitting with doubt or sitting with uncertainty because they're actually playing with it, they're active. And they're using that doubt to learn about what's possible to do. And so their recommendations are much more robust, they're much more well thought out. They have plans in place to consult with doctors and to report things to the FAA under certain conditions. They're partnering with the pilot in question to put in safety protocols to protect his privacy so other people don't learn about his condition, to make sure there are safety protocols for passengers so their risk isn't increased in any way, shape or form.

• 1:22:04Speaker 12

  And this kind of effective problem solving can only really happen when decision makers are comfortable with not knowing.

• 1:22:13Shankar Vedantam?

  One of the things that I find interesting about doubt is that there is something of a Goldilocks dimension to this emotion. The right amount of doubt can help us to look around corners, address problems before they emerge, but too much doubt can become paralyzing. We received a question about this from a listener named Chevenise, who says she struggles with too much doubt.

• 1:22:34Speaker 13

  My doubt has shifted from something that's occasional to something that's frequent. And I have a mind of my own and should be taking full responsibility of my decisions, whether acting independently or choosing to go along with others. But I often second guess my judgment. As a result, I started defaulting to letting others make decisions, not because I don't know, but because if I'm wrong, I feel safer when the potential shame belongs to someone else rather than myself. So how do I move past that?

• 1:23:05Shankar Vedantam?

  Bobby, do you have any practical advice for people like Chevenise, who doubt themselves too much?

• 1:23:11Speaker 12

  Such an important question and one that so many of us struggle with, whether it's doubting too much, like Chevenise pointed to, or not doubting enough and running headfirst into a set of

• 1:23:22Speaker 12

  solutions or alternatives. You know, one thing that is helpful in identifying that Goldilocks zone is something that I call the principle of requisite variety. And the idea is that it takes complexity to notice complexity. Take, for example, your immune system. If your body only had antibodies for, let's say, two types of cold or two types of virus, then you'd get sick all the time if your environment had lots of different types of viruses in it. But if your immune system could represent all of those different types of viruses and have antibodies for all those different types of viruses, you could deal with the complexity of the situation that you find yourself in. And so ideally, if we bring this back to thinking and making decisions,

• 1:24:06Speaker 12

  the way that we think about things has to match the complexity of the situations that we find ourselves in. And so we can make two types of error. We can make the error where our thinking is too simple for a world that's more complicated. Or we could make the error that Chevenise has pointed out to, which is that our thinking can be way too complicated for a situation that we're facing. And so there's a couple of things that I think are helpful in this regard. The first is to remember that the point of engaging doubt is to act better, not to get the right answer. And so sometimes we ruminate and we go back and say, "Look, I want to make sure I get the perfect answer here, and that's why I'm thinking over and over again about what's happening." And a better way of assessing your thinking is to say,

• 1:24:50Speaker 12

  "Did this help me run an experiment that was worthwhile? Did this help me take the next step in a way that I feel proud of and confident in?" And so one of the things we want to ask ourselves is, "Do I feel like I know enough that I can act? And can I act in a way that maybe isn't an all-or-nothing decision, but it's a next step that allows me to learn more, gain more confidence, and iterate from there?"

• 1:25:14Shankar Vedantam?

  Chevenise's struggle to control her feelings of doubt feel really relatable and common. Interestingly, it also gets at deeper questions about free will that are currently raging in the academic world. You say that doubt can be a bellwether in the debate over free will?

• 1:25:32Speaker 12

  I think that's exactly right. Currently, the debate is framed as a binary. Either we have free will and we can make choices that are divorced from our context and our biology and our history, or we don't have free will and all of our choices are determined by our context, our genetics, our history. And I think doubt provides a really interesting lens on that particular debate. When we experience certainty, we don't think that there are other options. It's kind of like certainty constrains our thinking and we have these conditioned, quick responses to the situations that we're facing.

• 1:26:12Speaker 12

  Doubt kind of disrupts those subconscious or unconscious scripts that we have and provides a pause between stimulus and response. And in that pause, we can think of other ways of interpreting what's happening around us. And now that we can choose between alternate interpretations, is this person giving me this difficult feedback because they want to hurt me or because they care about me? I don't know. But now, by choosing between those different interpretations, I'm opening up some degrees of freedom. It's still not completely divorced from history and context and biology, but it is a degree of freedom where I get to shape and author my life in ways that I couldn't if I didn't see alternative choices.

• 1:26:56Shankar Vedantam?

  I mean, in this model, exercising free will is almost a skill. It's not something we have or don't have. It's something that we can choose to have.

• 1:27:05Speaker 12

  That's exactly right, because when we take the time to learn about what's happening around us and not default to whatever dominant interpretation is in our environment or the first thing that occurs to our mind, then we're building the capacity to exercise our free will by changing the way that we interpret the world around us.

• 1:27:25Shankar Vedantam?

  We've all heard the phrase, "Trust your gut." We typically interpret that to mean that we should act decisively. Listener Michelle has a question about that.

• 1:27:34Speaker 14

  How do you reconcile radical doubt with the idea of embodiment? Particularly the role of gut feelings or bodily signals in decision-making? Many of us are encouraged, especially in modern talk therapy, to listen to our bodies or notice somatic cues as sources of insight. But as Bobby discusses, those signals can also be shaped by fear, bias, or past experience. So how do you practice embodiment while still exploring your doubt?

• 1:28:09Shankar Vedantam?

  So Bobby, we hear a lot about paying attention to bodily cues like your heart rate or butterflies in your stomach. Sometimes these signals can be helpful in alerting us to danger, but sometimes they can also be debilitating in keeping us from performing at our best. I think Michelle's question is insightful. Are these physical cues the manifestations of doubt?

• 1:28:30Speaker 12

  I love this question. I think it's such an important one. And Michelle is exactly right. We're always told to pay attention to our gut. And the body knows what the right answer is. And if we take that seriously, the body is giving us really important signals. Those somatic cues, whether that's sweaty palms or butterflies in your stomach or feeling your jaw tighten because you think this is a situation that is making you angry. Those are really important signals, but we might not treat them as commands. We might not treat them as the final interpretation of the situation that we're facing. We want to treat them as important information that is teaching us something about our own history.

• 1:29:14Speaker 12

  Why is it that we're having this set of somatic reactions? Maybe something happened to us in the past and our body's trying to warn us. That warning may be very wise, it may be unwise, in the specific situation we're facing. And so treating those somatic cues as another hypothesis to say, huh, my body's telling me I should get out of here. What else in this environment is consistent with that hypothesis? And also, what else is inconsistent with that hypothesis? It is very important to take the time to retrain your body. And so when we look at all different types of therapy, particularly exposure therapy. So in my past, I have this vivid memory. Of taking my daughter to a discovery museum.

• 1:29:57Speaker 12

  You know, she was three years old and going down these giant slides and dad, come with me and I'm going down the slide and it's like a completely covered slide, like a tube. And halfway through, I am having a panic attack. I am stuck in this slide. I'm an adult. I don't know if I'm going to get out and you know, my body is telling me I gotta go. I'm in danger. Now, once I got out of the slide, of course, you're not in any real mortal danger, right? And you're, you'd know that that wasn't the right interpretation. It was important for me over time to train my body to not have that reaction. And it doesn't happen just by thinking different thoughts. You have to take the time to expose your body slowly to those kinds of stimulus where

• 1:30:38Speaker 12

  perhaps your somatic reaction isn't matching the environment that you're in.

• 1:30:43Shankar Vedantam?

  Hmm. A listener named Nancy sent us a note pointing out what she sees as one benefit of doubt. She says that doubt, which is often seen as a negative thing, can lead us to something that everyone would agree is positive, and that thing is curiosity. What do you think, Bobby?

• 1:31:01Speaker 12

  I 100% agree with Nancy. There are conditions under which, when we see the benefits of engaging in that cognitive effort, of learning, of noticing differently, that we can gain the benefits of doubt by turning doubt into curiosity. There are also times where we don't see those benefits, where we're paying much more attention to the costs of that cognitive effort, where doubt feels like, you know, this is something where my body's telling me I gotta get out of here. This is a situation I have to avoid. And so this balance of how much excitement or benefit we see and how much threat we see is really critical from turning doubt into this thing that is painful, into doubt

• 1:31:45Speaker 12

  that is something that is positive. And curiosity is a great way of thinking about the positive version of doubt.

• 1:31:56Shankar Vedantam?

  When we come back, how we can use doubt to motivate ourselves. You're listening to Hidden Brain. I'm Shankar Vedantam.

• 1:32:25Speaker 15

  An extraordinary holiday starts at Paragold, the destination for luxury home. Elevate the season with unique heirloom quality decor, gifts, hosting essentials, and more from design's best brands. Shop our largest ever selection in-store and online at paragold.com.

• 1:32:41Speaker 09

  This podcast is supported by Nurtac ODT. Remedy Pant. We know you didn't ask for an interruption, but migraine doesn't wait for the right moment to interrupt either. It just barges in, takes your time, and throws everything off. So when migraine takes your time, take Nurtac. It's for the acute treatment of migraine with or without aura in adults. Nurtac can provide pain relief in two hours, which can last up to two days. Ask your healthcare provider if Nurtac is right for you, because your time is for you, not migraine. Don't take if allergic to Nurtac ODT. Allergic reactions can occur even days after use. Get help right away for trouble breathing, rash, swelling of face, mouth, tongue, or throat. High blood pressure and Raynaud's syndrome can occur. Get help for high blood pressure, numbness, coolness,

• 1:33:25Speaker 09

  pain, or color changes in fingers and toes. Common side effect is nausea. For full prescribing information, call 1-833-4-NUR-TAC or visit Nurtac.com. All right, back to your podcast, playlist, or whatever's keeping you going today.

• 1:33:41Speaker 10

  With the Discover Cash Back Card, it's payback time when you earn cash back on everyday purchases. Activate and earn 5% cash back at different categories each quarter on up to $1,500 in purchases. That's 5% cash back at different places each quarter, like grocery stores, on gas, and at restaurants. It pays to discover. Terms apply. See discover.com/five for details.

• 1:34:15Shankar Vedantam?

  This is Hidden Brain. I'm Shankar Vedantam. At the University of Virginia, Bobby Parmar studies when to listen to the voice of doubt in your head. He's the author of Radical Doubt: Turning Uncertainty Into Sure-Fire Success. Bobby, let's turn to the implications of your research in workplaces. We've talked about our preference for leaders who act decisively. In many corporate environments, employees who ask clarifying questions or pause to consider a decision are often perceived as hesitant or even obstacles to reaching a goal. Confident voices, on the other hand, are praised for their conviction. I'm thinking of Mark Zuckerberg's famous motto, "To move fast and break things," for example.

• 1:34:59Shankar Vedantam?

  Listener Amy had a question about doubt in the workplace. She writes, "How do organizations benefit from seasoned, reflective thinking when their cultures often privilege confidence over consideration?" What do you think, Bobby?

• 1:35:13Speaker 12

  What a powerful question from Amy, one that I spend a lot of time thinking about and working with organizations around. And she's absolutely right. There are cultures that prioritize confidence and decisiveness over uncertainty. And many of those cultures, over time, realize that that can lead to wasted time and effort and burnout in their employees when leaders aren't taking the time to exercise some wisdom and curiosity. And so then many of those companies come around to say, "Well, how can we make better decisions? How can we embrace doubt more effectively in our day-to-day decision-making so that we can avoid some of these costly errors that come out of, perhaps, a false certainty?" And there's lots of things that leaders can do, thankfully.

• 1:35:58Speaker 12

  One tactic that I like is to be very careful about how we structure meetings and conversations. If you are a senior leader, leading a conversation about, let's say, a new product proposal, it's very easy to let people say whatever they want. Typically, if you're in a culture where people show that they're really smart by poking holes in other people's idea, within the first 10 minutes, everyone is very negative about this new product proposal. And what I've seen wise leaders do is they actually time-box those things. And they say, "Okay, the first thing I'd like for us to do is to spend some time thinking about the virtues of this idea." And once they've done that, then they think through, okay, what are some concerns that we have or some weaknesses that we should be aware of?

• 1:36:43Speaker 12

  And by taking time to think about both of those things, we don't become overly negative or overly positive about an idea, and we can exercise much more careful and critical thinking.

• 1:36:55Shankar Vedantam?

  I'd like to talk about the types of situations where it might feel like there isn't time to stop and allow space for doubt. Listener Nancy, who made the connection between doubt and curiosity, sent us this message. She says, I can see how training and practice in the management of doubt can be quite useful in a situation where there's some time to ask questions and consider alternative points of view. However, what about in sudden or emergency situations? With practice, can doubt trump more reactive thinking? What do you think, Bobby? Is doubt less useful in situations where you have to make quick decisions like an emergency?

• 1:37:31Speaker 12

  This is a question that I often get from executives, and I think Nancy has placed her finger on something that is very important to think about. I think doubt is very helpful in acute emergency situations. It's just helpful at a different stage of the process. And so often, I'll work with medical professionals who are operating in an ER or in an emergency room, folks who might work on an aircraft carrier or a nuclear power plant. And all of these situations require very quick decisive action and decision making. And so to Nancy's point, people don't have even a few minutes to think about what they might do. And what ends up happening is, under those conditions of stress, acute time pressure or social

• 1:38:16Speaker 12

  stress, lack of resources, people fall back on their habits. And if they have strong training, those habits can help them in those situations. And if they don't have strong training, or if they haven't been trained for that particular crisis, Their habits can't help them or don't help them in those situations. And so what we end up seeing in those acute moments is that typically there's an error. Something happened, a patient died on the operating table. There was a containment issue in the power plant. And then, once that error is contained, people come back and they use doubt to learn about what happened. Why did it happen? What could we do differently next time?

• 1:38:57Speaker 12

  And they use the insights from that learning process to retrain or train the next group of people who will be confronting that situation. And so we see those benefits of doubt occur after an error where people don't have a chance to actually think carefully. And then that learning is used to adapt the training to minimize the likelihood of the error in the future.

• 1:39:22Shankar Vedantam?

  I love this idea because of course, the situations that come up, even in emergency settings, are often situations that we've confronted before. And this explains why, you know, when an EMT shows up at the crash site of an accident, the EMT doesn't lose their head. They're able to react calmly, they're able to think about things. It's because they've been in this scenario before, they've trained for it.

• 1:39:43Speaker 12

  Absolutely. And it takes time to practice and to really learn to regulate yourself and what to pay attention to. And so thank goodness they have that training. We all benefit from that.

• 1:39:55Shankar Vedantam?

  We received a number of messages from listeners who shared stories about the role of doubt in their assessments of their romantic relationships. Here's one from listener Lauren.

• 1:40:05Speaker 16

  There's this prevalent idea that when you know, you know. Like when you're with that right person, the person you're supposed to be with, you just know. And I found that in a relationship where I really thought I knew very early on, and then spent four years finding out that I was wrong. And I wonder if I had had some more doubt, if I would have noticed some of those patterns earlier instead of leaning back to that sense of knowing, that sense of certainty. And since getting out of that relationship, it really undermined that sense of knowing. And I've been flooded with doubt, which has also been.

• 1:40:46Speaker 16

  Problematic, because even the presence of doubt seems like it's supposed to be wrong. Because when you know, you know. But I've also found that the more that I embrace that doubt, the more I'm able to use it as something that's trying to help me. But I'm still trying to find that balance.

• 1:41:04Shankar Vedantam?

  So Bobby, this is another example of the tricky line we walk with doubt. In the best of circumstances, doubt can help us identify problems and avoid unnecessary heartache. But on the other hand, there's a risk that it can lead us to ruminate. How do we walk this line, particularly in situations where our emotions are deeply invested in the outcome, such as our romantic relationships?

• 1:41:26Speaker 12

  This is such a great example of how we're all taught to be right answer getters. Lauren talked about when you know, you know. It's certain. It's a match made in heaven. It's a perfect puzzle piece. How can there be doubt? And in fact, if there is doubt, maybe it's not the right relationship or the right person for you. That's the story that we're all sold. And for many of my students who are in the age range where they're starting lifelong relationships and finding romantic partners, we talk about this distinction between finding and making. And when we think we're going to find the right partner, it reinforces this idea that there's a right answer out there, versus this idea of how do I make a better relationship?

• 1:42:09Speaker 12

  And making a better relationship is one where you have to pay attention to what's working, what's not working, what do we have in common, what do we not have in common? How do we like to live together? How are we going to solve conflicts and problems? And you're less focused on getting the right answer and avoiding doubt, and more focused on saying, what am I learning about myself and my partner, and what it will take for us to build a life together, to build a relationship together? And when Lauren talked about using her doubt more productively, I would imagine that that's the kind of work that she's doing.

• 1:42:42Shankar Vedantam?

  It's worth noting that it can be particularly difficult to listen to our doubt when we're going against the norms and perceived wisdom of the people around us. This can be true in the workplace, but it can also be true in other contexts as well. Listener Hillary says she's struggled with this tension when it comes to raising her children.

• 1:43:00Speaker 17

  I never know if I am doing the right thing. When my belief differs from that of the majority, I often wonder, am I missing something? And how to hold firm to the possibility that it's okay that I don't think the same way.

• 1:43:23Shankar Vedantam?

  So researchers like Bob Cialdini have shown how easily we're influenced by what is popular in our social circles, Bobby. Hillary here is talking about this in the context of parenting, but I think we've all experienced this feeling that everyone is doing something one way. Surely that must be the right way to do it.

• 1:43:40Speaker 12

  I can empathize with Hillary's story so much. You know, when we were raising our daughters, we had a very similar moment. My oldest daughter, who's now 18, when she was a baby, had a really hard time sleeping on her own. And everyone was saying that you should sleep train your baby. And we tried, it didn't work for her, it didn't work for us. She was crying, we were crying. And what do you do in those environments where everyone's like, this is the right answer? You obviously have to sleep train your baby. And it wasn't working for us. You know, so I have a lot of empathy for what Hillary's saying. And in those moments, I think you have to step back and say, just like our intuition, just like our somatic signals, what's happening in our social environment is one hypothesis

• 1:44:24Speaker 12

  about how to deal with the situation at hand. What are other hypotheses? And what is the evidence that this alternate hypothesis, not sleep training my child, or doing this thing that is different than the social norms, that that would work or that would be effective in this situation? And then there's a second piece here, which is, it's not necessarily that your alternate hypothesis is the perfect right answer. It's also going to have weaknesses, and it's also going to have things that you're going to have to mitigate. And so, being able to think through, if I don't sleep train my child, and my child does sleep in a bassinet next to us, or in the bed. How am I going to change that over time? What are the risks of that? And how can I mitigate those risks?

• 1:45:07Speaker 12

  So it still requires this process of learning and testing and iteration. One of the things that I see a lot is in society, we try to sell this idea that there's a perfect signal, that you're going to get the right answer. The perfect signal comes from society. The perfect signal comes from your body. The perfect signal comes from your gut reaction or your intuition or the textbook. And that might be true for a certain class of problems. But when we confront moments of doubt, by definition, there are multiple competing good answers. And we have to learn to use that doubt to propel more careful noticing and learning so that we can make something work in the situation that we face.

• 1:45:52Shankar Vedantam?

  In our previous conversation, Bobby, we discussed how to harness doubt in a positive way. A listener named Andrew shared his story along those lines.

• 1:46:01Speaker 18

  In May of last year, I was elected to a municipal position on my local city council. And in the run up to that, I found that I was able to harness doubt, which had been a overall negative in my lifetime up to that point. I found myself often almost paralyzed by doubt in assessing situations, in understanding my capabilities. However, in this particular exercise, in the run up to the election,

• 1:46:46Speaker 18

  what was very interesting to me through that entire process is that I was taking the time to review the doubts that I had and strategizing on how to overcome those doubts. I wrote in my journal afterwards, the fact that I had become friends with my doubt. And I had previously looked at doubt as my enemy. And fortunately for me, in that particular instance,

• 1:47:18Speaker 18

  Win the race. I would have been happy had I not won the race, simply with the growth of learning how to manage doubt.

• 1:47:28Shankar Vedantam?

  So Bobby, I love this idea of becoming friends with doubt. You know, when I sit down with my friends, I don't always have to agree with them. But being a good friend means I do have to listen to them, to be open to what they're telling me. And in many ways, this captures so well what we've been talking about here. We want to listen to what doubt is telling us, but that doesn't mean we always have to follow our doubts.

• 1:47:49Speaker 12

  What an inspirational story from Andrew. I love this story, you know? And the metaphor of becoming friends with your doubt is such a nice metaphor. Nice connection back to Nancy's question around curiosity. And being able to listen to your doubt and be informed by it without being ruled by it is such a critical skill. And, you know, it's one that I practice and I hope to inspire others to practice, that in moments where we don't know how to move forward, you've got to take the time to notice things, to frame problems, generate potential alternatives or options, test them. And all of those things require a patience and a curiosity that doesn't happen when we feel this push towards getting the right answer and getting it right away.

• 1:48:39Shankar Vedantam?

  Bobby Parmar is the author of Radical Doubt: Turning Uncertainty Into Surefire Success. Bobby, thank you so much for joining me again today on Hidden Brain.

• 1:48:49Speaker 18

  My pleasure.

• 1:48:54Shankar Vedantam?

  Hidden Brain is produced by Hidden Brain Media. Our audio production team includes Annie Murphy-Paul, Kristin Wong, Laura Querelle, Ryan Katz, Autumn Barnes, Andrew Chadwick, and Nick Woodbury. Tara Boyle is our executive producer. I'm Hidden Brain's executive editor.

• 1:49:13Shankar Vedantam?

  If you enjoyed today's conversation, please share it with a few friends, family members, or coworkers. I do not doubt that they would get a lot out of it.

• 1:49:23Shankar Vedantam?

  I'm Shankar Vedantam. See you soon.

• 1:49:35Speaker 15

  An extraordinary holiday starts at Paragould, the destination for luxury home. Elevate the season with unique heirloom-quality decor, gifts, hosting essentials, and more from design's best brands. Shop our largest-ever selection in-store and online at paragould.com.

• 1:49:51Speaker 09

  This podcast is supported by Nurtec ODT. Remedy Pant. We know you didn't ask for an interruption, but migraine doesn't wait for the right moment to interrupt either. It just barges in, takes your time, and throws everything off. So, when migraine takes your time, take Nurtec. It's for the acute treatment of migraine with or without aura in adults. Nurtec can provide pain relief in two hours, which can last up to two days. Ask your healthcare provider if Nurtec is right for you, because your time is for you, not migraine. Don't take if allergic to Nurtec ODT. Allergic reactions can occur even days after use. Get help right away for trouble breathing, rash, swelling of face, mouth, tongue, or throat. High blood pressure and Raynaud's syndrome can occur. Get help for high blood pressure, numbness,

• 1:50:35Speaker 09

  coolness, pain, or color changes in fingers and toes. Common side effect is nausea. For full prescribing information, call 1-833-4-NURTEC, or visit Nurtec.com. All right, back to your podcast, playlist, or whatever's keeping you going today.