The Debt Trap

23:21Bobby Parmar:so there were a couple of moments when you realized that something was off first you had your dad look at the paperwork 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 uh first he noticed a prepayment penalty. And he said, well, these are illegal in Virginia. So you should talk to your underwriter to have it removed. But 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.

24:03And then we got this mystery check for$3 ,000 after the refinance, which was refunding the illegal prepayment penalty.

24:16Bobby Parmar:So the people you are working with don't seem like particularly nice people, John. You could say that. I mean, 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 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. 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?

25:01Let's see. We had that mortgage for probably about two years. And 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.

25:19Bobby Parmar:Wow.

25:27Bobby Parmar: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. 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, you know, there are fees there that are just getting rolled into the loan. And when something gets rolled into a loan, whether it's, you know, 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.

26:16Bobby Parmar:So in other words, if someone were to tell you, you know, 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. Absolutely. Well, and it's off in the future too. And so it doesn't really seem like $500 as silly as that sounds. 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.

26:49Bobby Parmar: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. Right. Buy now, pay later, it 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.

27:31But because we see it, oh, well, this is just – 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.

27:44Bobby Parmar: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? 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.

28:31So I'd be curious to see if they're holding those liabilities or not, because once Once the economy goes in a downward turn, a lot of these people are going to stop making payments.

28:45Bobby Parmar:When we come back, more mental traps that can lure us into debt. You're listening to Hidden Brain. I'm Shankar Vedantam.

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30:55Bobby Parmar: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 feedback at hiddenbrain.org. Use the subject line money. Again, that email address is feedback at hiddenbrain.org.

31:38Bobby Parmar: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. 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?

32:17So 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 rent a camper and tow it down to Florida to see my mother-in-law.

32:42And how did it go? Let's see. 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.

33:23What happened next, John? Did you have to get a new car? 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 an achievement, let alone to be able to negotiate a decent price and that sort of thing.

34:02Bobby Parmar:I understand that you found a car that was supposed to be extremely reliable. 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.

34:34Bobby Parmar: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. Right. When they were trying to convince us to buy the car, it was all about safety and reliability. 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.

35:14So you're going to want to buy all these extended warranties and protective coatings and all these things.

35:26Bobby Parmar:Did you wonder if this car is so reliable, why are they asking me to buy all these warranties? Yeah, 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.

35:47Bobby Parmar: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 its own destruction. Talk about the psychological factors that this kind of marketing is playing on, John. 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 or investments that are gaining, we tend to sell them too early.

36:23And 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, 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, the car is the second biggest purchase they ever make in their lives behind a house. So you don't want that to turn into a loser.

37:00So you're willing a lot of times to take on the extra expense of these extended warranties.

37:07Bobby Parmar: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? Yeah. 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.

37:49But 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. 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.

38:18Bobby Parmar: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 overestimating our capacity to pay for our debts in the future. Right. We are all at a disadvantage when trying to figure these things out. And it's not because we lack intelligence or background. 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.

38:53Bobby Parmar: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. 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, you know, facing some difficulties, our self-control can actually degrade over the course of the day.

39:42So 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.

39:52Bobby Parmar:I understand there was one study where gamblers were offered a drink at a casino and it changed how they behaved subsequently? Right. So if you've ever been to Vegas or to any casino, You know, 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.

40:39Bobby Parmar: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. 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 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.

41:22And 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.

41:38Bobby Parmar: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. 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?

42:15But 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.

42:29Bobby Parmar:One of the things that you talk about is the role of rewards programs and how they hijack our brain's desire to pursue financial goals. Talk about this, everything from airline miles to, you know, getting the 10th coffee free once you buy nine coffees at the local cafe. So if we're going to go with the example of, say, a free 10th coffee after you buy 9, 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.

43:27Bobby Parmar:Do you have a personal example of doing this yourself, John? 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.

44:06Bobby Parmar: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. 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 two or three hundred dollar roundtrip ticket, people end up paying thousands of dollars in interest for it.

44:44Bobby Parmar: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. Okay, 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 in 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.

45:26And that rise in testosterone made them more aggressive and more self-focused and less likely to donate to charity.

45:34Bobby Parmar: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? 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 flow to you, the less cooperative you had to be, and the less you had to consider others. Well, back then, status was probably about physical dominance.

46:19Now, status is more determined by economic resources. So people handling large sums of money experience a rise in testosterone, and they become more focused on themselves and less concerned with others.

46:35Bobby Parmar:Do you think most people have a good sense of how their own minds are working when it comes to debt and money, John? 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.

47:15In scenario A, people want the first choice, but you take that same person and you put them in a different context and they want different things. If you ask people to choose the best option versus eliminate the worst options, they end up making different choices. 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.

48:07They viewed it as moderate, so more people started buying it.

48:11Bobby Parmar:I mean, in some ways, what you're saying is that marketers are taking advantage of these natural gremlins that are in our heads. 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.

48:47Bobby Parmar: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. When we come back, strategies for fighting back. You're listening to Hidden Brain. I'm Shankar Vedanta.

49:27Bobby Parmar:Support for Hidden Brain comes from Apple Creator Studio. Being a creator today means you wear a million hats. You're the director, the audio engineer, the graphic designer, and so much more. Bouncing between a dozen different expensive software tools can completely kill your momentum. Apple Creator Studio completely changes the game. You get the best creative apps from Apple together in one subscription. You can craft your stories with video in Final Cut Pro, reimagine images in Pixelmator Pro, produce your best music in Logic Pro. It even supercharges your productivity apps like Keynote, Pages, Numbers, and Freeform with intelligent features.

50:08Bobby Parmar:All of that and more for only$12.99 a month. Plus, you can share the subscription with up to five other people. With Apple Creator Studio, it's all yours for the making. Try Apple Creator Studio free at apple.com slash apple dash creator dash studio. Support for Hidden Brain comes from BetterHelp. Summer can be a mix of things. For some, it's about travel, adventure, and making memories. For others, juggling everything can feel overwhelming. Kids at home, packed schedules, shifting routines. It's easy to slip into survival mode and wonder where the days are going. Taking time for yourself can make a difference, and therapy can support that, helping you feel more confident setting boundaries and making space to recharge so that summer feels more balanced and enjoyable.

50:59Bobby Parmar:With BetterHelp, you can connect with a licensed therapist online. You'll be matched based on your needs and can switch anytime if it's not the right fit. With over 30 ,000 therapists and millions of clients worldwide, people are finding the support they need with BetterHelp. You don't have to say yes to everything this summer. Find guidance in therapy. Visit betterhelp.com slash hidden to get started. That's betterhelp.com slash hidden.

51:33Bobby Parmar: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 feedback at hiddenbrain.org. Use the subject line money. Again, that email address is feedback at hiddenbrain.org.

52:17Bobby Parmar: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. 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. 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.

52:57Bobby Parmar:Can you talk about the role of exhaustion when it comes to the financial mistakes we make? 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 a likelihood that we're going to have a breakdown in our self-control. 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.

53:41Yes. 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.

54:10Bobby Parmar: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. 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.

54:42And 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.

55:06Bobby Parmar: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. 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.

55:30Bobby Parmar:What can we do to resist getting sold something we don't really want or need when we are exhausted, John? 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.

56:07But 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? 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 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.

56:53Bobby Parmar: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. 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. 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.

57:54Absolutely, 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.

58:09Bobby Parmar:Talk a little bit about how marketers take advantage of our desire for simplicity, John. 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 up front. 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 expense of things.

58:55But they will make us feel like we understand something when we actually don't.

58:59Bobby Parmar:So in other words, I'm told that something has a 0 % introductory rate, and I focused on the 0 % and not on the word introductory. 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. Is this related to the idea called partition pricing, John? Yes. So partition pricing is 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.

59:54Bobby Parmar: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. 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. 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? I wish I had a more attractive answer for you, but the answer is to do the math and to do the work.

1:00:34If 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 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 that comes down from heaven and it is what it's going to be. And that's the price we pay for things. It's more about effort and shopping around and finding competitive pricing.

1:01:11Bobby Parmar: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 a better rate for you. 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.

1:02:05Bobby Parmar: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. 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.

1:02:48And, 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 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.

1:03:15Bobby Parmar: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. 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.

1:03:53And so you tend to hold on to it when you shouldn't.

1:03:56Bobby Parmar: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? 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.

1:04:34A 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 college 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.

1:05:10Bobby Parmar: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 up front. 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. 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.

1:05:57But 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.

1:06:15Bobby Parmar:Talk about the role of status branded credit cards, John. How do they work and what should we do about them? 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, you know, 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.

1:06:56And 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, 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.

1:07:14Bobby Parmar: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. 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, you know, 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.

1:07:51Bobby Parmar: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. 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.

1:08:34Bobby Parmar:What do you think people should do with their status branded credit cards? 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.

1:09:10Bobby Parmar: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. Correct. Yeah. 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.

1:09:53So people of lesser means will gravitate towards them.

1:09:57Bobby Parmar: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 say that one way to combat this kind of bias is to seek examples that run counter to it. How would we do this? 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, ask yourself, well, have you ever had disposable income, right?

1:10:44So 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 for the future, well, then that will help you have a more restrained or rational approach to things.

1:11:02Bobby Parmar:Is basic financial literacy something that could help us here, John? 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. 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.

1:11:49Right, absolutely. And on the other side, the lenders, they live in financial decisions. So they're gonna 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.

1:12:10Bobby Parmar: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? Well, the worst decisions that I've made often have been because I felt helpless or that maybe 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?

1:12:55Bobby Parmar: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 an 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? We recently heard a powerful story from a listener named Suzanne.

1:13:38Bobby Parmar:She called in to tell us about a time when she went to get a routine flu shot at her pharmacy. 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. Suzanne had to make a decision. She was worried the pharmacist was fatigued. Was it wise to proceed? Could something go wrong? 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.

1:14:23Bobby Parmar: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. And I said, do you want me to sit? And she said, no, I can just stand above you. I was going to face a certain direction. And she placed the needle into my rotator cuff, which left me screaming. and she said, relax, relax. I feel like I'm going to break the needle off. Well, she completely tore my rotator cuff, which has been a problem that's plagued me since the pandemic.

1:15:12Bobby Parmar:And I've done all sorts of medical interventions, but it was a very bad situation that has led me to difficulty.

1:15:25Bobby Parmar: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?

1:15:45Bobby Parmar:That's when we come back. You're listening to Hidden Brain. I'm Shankar Vedanta.

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1:17:38Bobby Parmar:This is Hidden Brain. I'm Shankar Vedant. 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?

1:17:59Bobby Parmar: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. Thanks so much for having me, Shankar. 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? 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.

1:18:47And 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, most organisms are going to choose the option that requires lower effort, lower physical effort, lower cognitive effort.

1:19:24Bobby Parmar: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. 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 Huntington's disease.

1:20:01And 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 movement. 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. 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 safety protocols?

1:20:35Bobby Parmar:How do you handle a situation like this? And I'm assuming it's a little tricky because health information is confidential information, is it not? 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 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.

1:21:17And 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? Privacy, transparency, care. And students really struggle with the uncertainty and the doubt in this kind of scenario.

1:21:37Bobby Parmar: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. 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 it 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.

1:22:11Other 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. 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. 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.

1:22:49And 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. And this kind of effective problem solving can only really happen when decision makers are comfortable with not knowing.

1:23:22Bobby Parmar: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. 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.

1:23:56But 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

1:24:08Bobby Parmar:belongs to someone else rather than myself. So how do I move past that? Bobby, do you have any practical advice for people like Chevenise who doubt themselves too much? 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 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.

1:24:48If 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, 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.

1:25:22We can make the error where our thinking is too simple for a world that's more complicated, or we could make the error that Chavanese 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.

1:25:56And a better way of assessing your thinking is to say, 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?

1:26:23Bobby Parmar: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? 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.

1:27:07When 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. 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?

1:27:44I 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.

1:28:05Bobby Parmar: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. 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. 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.

1:28:43How do you reconcile radical doubt with the idea of embodiment, particularly the role of gut feelings or bodily

1:28:50Bobby Parmar: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? 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.

1:29:35Bobby Parmar:Are these physical cues the manifestations of doubt? 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, you know, butterflies in your stomach or feeling your jaw tighten because you think this is a situation that, you know, is making you angry. Those are really important signals, but they might not, we might not treat them as commands, right?

1:30:12We 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. 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?

1:30:51It 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. 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 got to go. I'm in danger. Now, once I got out of the slide, of course, you're not in any real mortal danger.

1:31:32Right. 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 perhaps your somatic reaction isn't matching the environment that you're in.

1:31:54Bobby Parmar: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? 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 got to get out of here.

1:32:38This 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 that is something that is positive. And curiosity is a great way of thinking about the positive version of doubt.

1:33:04Bobby Parmar:When we come back, how we can use doubt to motivate ourselves. You're listening to Hidden Brain. I'm Shankar Vedanta.

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1:34:38Bobby Parmar: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 Surefire 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.

1:35:18Bobby Parmar:I'm thinking of Mark Zuckerberg's famous motto, to move fast and break things, for example. 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? 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.

1:36:04And 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. 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. And, you know, 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.

1:36:49And what I've seen wise leaders do is they actually time box those things and they say, OK, 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, OK, what are some concerns that we have or some weaknesses that we should be aware of? 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.

1:37:18Bobby Parmar: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?

1:37:55This 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.

1:38:34And what ends up happening is under those conditions of stress, acute time pressure or social 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.

1:39:10And 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? 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.

1:39:45Bobby Parmar: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 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. 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. We received a number of messages from listeners who shared stories about the role of doubt in their assessments of their romantic relationships.

1:40:26Bobby Parmar:Here's one from listener Lauren. 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 problematic because even the presence of doubt seems like it's supposed to be wrong.

1:41:14Bobby Parmar: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. 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? This is such a great example of how we're all taught to be right answer getters.

1:41:56You know, Lauren talked about when you know, you know, it's certain. You know, 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 kind of 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?

1:42:32and 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.

1:43:06Bobby Parmar: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 struggled with this tension when it comes to raising her children. 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. So researchers like Bob Cialdini have shown how easily we're influenced by what is popular in our social circles, Bobby.

1:43:54Bobby Parmar: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. 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?

1:44:30You obviously have to sleep train your baby. And it wasn't working for us. So I have a lot of empathy for what Hillary is 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 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 the situation? And then there's a second piece here, which is it's not necessarily that your alternate hypothesis is the perfect right answer.

1:45:13It'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? 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.

1:45:46The 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.

1:46:15Bobby Parmar: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. 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 an 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, 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.

1:47:25I 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, win the race.

1:47:43Bobby Parmar:I would have been happy had I not won the race simply with the growth of learning how to manage doubt. 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. 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.

1:48:20Nice 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, we'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.

1:49:03Bobby Parmar: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. My pleasure.

1:49:18Bobby Parmar:Hidden Brain is produced by Hidden Brain Media. Our audio production team includes Annie Murphy-Paul, Kristen Wong, Laura Querell, Ryan Katz, Autumn Barnes, Andrew Chadwick, and Nick Woodbury. Tara Boyle is our executive producer. I'm Hidden Brain's executive editor. If you enjoyed today's conversation, please share it with a few friends, family members, or co-workers. I do not doubt that they would get a lot out of it. I'm Shankar Vedanta. See you soon.

1:50:13Bobby Parmar:The new Spriteberry Blast is here. With berry flavor and cold foam, Sprite from McDonald's just got bluer. One of many new drinks now at McDonald's. Copyright 2026, The Coca-Cola Company. Sprite is a registered trademark of The Coca-Cola Company.