Group items tagged

the sunk cost fallacy leads us to miss or ignore the logical facts presented to us, and instead make irrational decisions based on our emotions—without even realizing we’re doing so

deep, evolutionarily ancient mechanism that helps us balance overall cost and benefit.

Second, it may be influenced by uncertainty about the outcome (you never know, it might work out, so why not keep trying?)

have shown that both capuchin monkeys and rhesus macaques are susceptible to the same behavior and that it occurs more often when the monkeys are uncertain about the outcome.

That helps when you're foraging for food, hunting prey, waiting for eggs to hatch, seeking a mate, or building a nest or enclosure.

"Monkeys have really quick reaction times on these games," said Brosnan, "so one second to them is actually a long time."

"Most rounds lasted only 1 second. So if you didn't get a reward after that, it was actually better to quit and start a new round. That would likely get you a treat sooner than if you had kept going."

"They persisted 5 to 7 times longer than was optimal," said Brosnan, "and the longer they had already tried, the more likely they were to complete the entire task."

t suggests that this behavior is likely driven by evolution and deeply embedded across species.

"They're like my second set of kids," she said.

it shows that human capacities like rationalization, or human concerns like not giving up on something we have publicly committed to, are probably not the main drivers of the sunk cost phenomenon.

reminds us that there is sometimes a good reason to give up.

Confirmation bias shows up most blatantly in our current political divide, where each side seems unable to allow that the other side is right about anything.

The whole idea of cognitive biases and faulty heuristics—the shortcuts and rules of thumb by which we make judgments and predictions—was more or less invented in the 1970s by Amos Tversky and Daniel Kahneman

versky died in 1996. Kahneman won the 2002 Nobel Prize in Economics for the work the two men did together, which he summarized in his 2011 best seller, Thinking, Fast and Slow. Another best seller, last year’s The Undoing Project, by Michael Lewis, tells the story of the sometimes contentious collaboration between Tversky and Kahneman

Another key figure in the field is the University of Chicago economist Richard Thaler. One of the biases he’s most linked with is the endowment effect, which leads us to place an irrationally high value on our possessions.

In an experiment conducted by Thaler, Kahneman, and Jack L. Knetsch, half the participants were given a mug and then asked how much they would sell it for. The average answer was $5.78. The rest of the group said they would spend, on average, $2.21 for the same mug. This flew in the face of classic economic theory, which says that at a given time and among a certain population, an item has a market value that does not depend on whether one owns it or not. Thaler won the 2017 Nobel Prize in Economics.

“The question that is most often asked about cognitive illusions is whether they can be overcome. The message … is not encouraging.”

that’s not so easy in the real world, when we’re dealing with people and situations rather than lines. “Unfortunately, this sensible procedure is least likely to be applied when it is needed most,” Kahneman writes. “We would all like to have a warning bell that rings loudly whenever we are about to make a serious error, but no such bell is available.”

At least with the optical illusion, our slow-thinking, analytic mind—what Kahneman calls System 2—will recognize a Müller-Lyer situation and convince itself not to trust the fast-twitch System 1’s perception

Kahneman and others draw an analogy based on an understanding of the Müller-Lyer illusion, two parallel lines with arrows at each end. One line’s arrows point in; the other line’s arrows point out. Because of the direction of the arrows, the latter line appears shorter than the former, but in fact the two lines are the same length.

Because biases appear to be so hardwired and inalterable, most of the attention paid to countering them hasn’t dealt with the problematic thoughts, judgments, or predictions themselves

Is it really impossible, however, to shed or significantly mitigate one’s biases? Some studies have tentatively answered that question in the affirmative.

what if the person undergoing the de-biasing strategies was highly motivated and self-selected? In other words, what if it was me?

Over an apple pastry and tea with milk, he told me, “Temperament has a lot to do with my position. You won’t find anyone more pessimistic than I am.”

I met with Kahneman

“I see the picture as unequal lines,” he said. “The goal is not to trust what I think I see. To understand that I shouldn’t believe my lying eyes.” That’s doable with the optical illusion, he said, but extremely difficult with real-world cognitive biases.

In this context, his pessimism relates, first, to the impossibility of effecting any changes to System 1—the quick-thinking part of our brain and the one that makes mistaken judgments tantamount to the Müller-Lyer line illusion

he most effective check against them, as Kahneman says, is from the outside: Others can perceive our errors more readily than we can.

“slow-thinking organizations,” as he puts it, can institute policies that include the monitoring of individual decisions and predictions. They can also require procedures such as checklists and “premortems,”

A premortem attempts to counter optimism bias by requiring team members to imagine that a project has gone very, very badly and write a sentence or two describing how that happened. Conducting this exercise, it turns out, helps people think ahead.

“My position is that none of these things have any effect on System 1,” Kahneman said. “You can’t improve intuition.

Perhaps, with very long-term training, lots of talk, and exposure to behavioral economics, what you can do is cue reasoning, so you can engage System 2 to follow rules. Unfortunately, the world doesn’t provide cues. And for most people, in the heat of argument the rules go out the window.

Kahneman describes an even earlier Nisbett article that showed subjects’ disinclination to believe statistical and other general evidence, basing their judgments instead on individual examples and vivid anecdotes. (This bias is known as base-rate neglect.)

over the years, Nisbett had come to emphasize in his research and thinking the possibility of training people to overcome or avoid a number of pitfalls, including base-rate neglect, fundamental attribution error, and the sunk-cost fallacy.

Nisbett’s second-favorite example is that economists, who have absorbed the lessons of the sunk-cost fallacy, routinely walk out of bad movies and leave bad restaurant meals uneaten.

When Nisbett asks the same question of students who have completed the statistics course, about 70 percent give the right answer. He believes this result shows, pace Kahneman, that the law of large numbers can be absorbed into System 2—and maybe into System 1 as well, even when there are minimal cues.

about half give the right answer: the law of large numbers, which holds that outlier results are much more frequent when the sample size (at bats, in this case) is small. Over the course of the season, as the number of at bats increases, regression to the mean is inevitabl

When Nisbett has to give an example of his approach, he usually brings up the baseball-phenom survey. This involved telephoning University of Michigan students on the pretense of conducting a poll about sports, and asking them why there are always several Major League batters with .450 batting averages early in a season, yet no player has ever finished a season with an average that high.

we’ve tested Michigan students over four years, and they show a huge increase in ability to solve problems. Graduate students in psychology also show a huge gain.”

, “I know from my own research on teaching people how to reason statistically that just a few examples in two or three domains are sufficient to improve people’s reasoning for an indefinitely large number of events.”

isbett suggested another factor: “You and Amos specialized in hard problems for which you were drawn to the wrong answer. I began to study easy problems, which you guys would never get wrong but untutored people routinely do … Then you can look at the effects of instruction on such easy problems, which turn out to be huge.”

Nisbett suggested that I take “Mindware: Critical Thinking for the Information Age,” an online Coursera course in which he goes over what he considers the most effective de-biasing skills and concepts. Then, to see how much I had learned, I would take a survey he gives to Michigan undergraduates. So I did.

he course consists of eight lessons by Nisbett—who comes across on-screen as the authoritative but approachable psych professor we all would like to have had—interspersed with some graphics and quizzes. I recommend it. He explains the availability heuristic this way: “People are surprised that suicides outnumber homicides, and drownings outnumber deaths by fire. People always think crime is increasing” even if it’s not.

When I finished the course, Nisbett sent me the survey he and colleagues administer to Michigan undergrads

It contains a few dozen problems meant to measure the subjects’ resistance to cognitive biases

I got it right. Indeed, when I emailed my completed test, Nisbett replied, “My guess is that very few if any UM seniors did as well as you. I’m sure at least some psych students, at least after 2 years in school, did as well. But note that you came fairly close to a perfect score.”

Nevertheless, I did not feel that reading Mindware and taking the Coursera course had necessarily rid me of my biases

For his part, Nisbett insisted that the results were meaningful. “If you’re doing better in a testing context,” he told me, “you’ll jolly well be doing better in the real world.”

The New York–based NeuroLeadership Institute offers organizations and individuals a variety of training sessions, webinars, and conferences that promise, among other things, to use brain science to teach participants to counter bias. This year’s two-day summit will be held in New York next month; for $2,845, you could learn, for example, “why are our brains so bad at thinking about the future, and how do we do it better?”

Philip E. Tetlock, a professor at the University of Pennsylvania’s Wharton School, and his wife and research partner, Barbara Mellers, have for years been studying what they call “superforecasters”: people who manage to sidestep cognitive biases and predict future events with far more accuracy than the pundits

One of the most important ingredients is what Tetlock calls “the outside view.” The inside view is a product of fundamental attribution error, base-rate neglect, and other biases that are constantly cajoling us into resting our judgments and predictions on good or vivid stories instead of on data and statistics

In 2006, seeking to prevent another mistake of that magnitude, the U.S. government created the Intelligence Advanced Research Projects Activity (iarpa), an agency designed to use cutting-edge research and technology to improve intelligence-gathering and analysis. In 2011, iarpa initiated a program, Sirius, to fund the development of “serious” video games that could combat or mitigate what were deemed to be the six most damaging biases: confirmation bias, fundamental attribution error, the bias blind spot (the feeling that one is less biased than the average person), the anchoring effect, the representativeness heuristic, and projection bias (the assumption that everybody else’s thinking is the same as one’s own).

most promising are a handful of video games. Their genesis was in the Iraq War

Together with collaborators who included staff from Creative Technologies, a company specializing in games and other simulations, and Leidos, a defense, intelligence, and health research company that does a lot of government work, Morewedge devised Missing. Some subjects played the game, which takes about three hours to complete, while others watched a video about cognitive bias. All were tested on bias-mitigation skills before the training, immediately afterward, and then finally after eight to 12 weeks had passed.

“The literature on training suggests books and classes are fine entertainment but largely ineffectual. But the game has very large effects. It surprised everyone.”

he said he saw the results as supporting the research and insights of Richard Nisbett. “Nisbett’s work was largely written off by the field, the assumption being that training can’t reduce bias,

even the positive results reminded me of something Daniel Kahneman had told me. “Pencil-and-paper doesn’t convince me,” he said. “A test can be given even a couple of years later. But the test cues the test-taker. It reminds him what it’s all about.”

Morewedge told me that some tentative real-world scenarios along the lines of Missing have shown “promising results,” but that it’s too soon to talk about them.

In the future, I will monitor my thoughts and reactions as best I can

Since at least the Middle Ages, philosophers and philologists have dreamed of curing natural languages of their flaws by constructing entirely new idioms according to orderly, logical principles.

nventing new forms of speech is an almost cosmic urge that stems from what the linguist Marina Yaguello, the author of “Lunatic Lovers of Language,” calls “an ambivalent love-hate relationship.” Language creation is pursued by people who are so in love with what language can do that they hate what it doesn’t. “I don’t believe any other fantasy has ever been pursued with so much ardor by the human spirit, apart perhaps from the philosopher’s stone or the proof of the existence of God; or that any other utopia has caused so much ink to flow, apart perhaps from socialism,”

What if, they wondered, you could create a universal written language that could be understood by anyone, a set of “real characters,” just as the creation of Arabic numerals had done for counting? “This writing will be a kind of general algebra and calculus of reason, so that, instead of disputing, we can say that ‘we calculate,’ ” Leibniz wrote, in 1679.

In his “Essay Towards a Real Character, and a Philosophical Language,” from 1668, Wilkins laid out a sprawling taxonomic tree that was intended to represent a rational classification of every concept, thing, and action in the universe. Each branch along the tree corresponded to a letter or a syllable, so that assembling a word was simply a matter of tracing a set of forking limbs

Solresol, the creation of a French musician named Jean-François Sudre, was among the first of these universal languages to gain popular attention. It had only seven syllables: Do, Re, Mi, Fa, So, La, and Si. Words could be sung, or performed on a violin. Or, since the language could also be translated into the seven colors of the rainbow, sentences could be woven into a textile as a stream of colors.

“I had this realization that every individual language does at least one thing better than every other language,” he said. For example, the Australian Aboriginal language Guugu Yimithirr doesn’t use egocentric coördinates like “left,” “right,” “in front of,” or “behind.” Instead, speakers use only the cardinal directions. They don’t have left and right legs but north and south legs, which become east and west legs upon turning ninety degrees

Among the Wakashan Indians of the Pacific Northwest, a grammatically correct sentence can’t be formed without providing what linguists refer to as “evidentiality,” inflecting the verb to indicate whether you are speaking from direct experience, inference, conjecture, or hearsay.

Quijada began wondering, “What if there were one single language that combined the coolest features from all the world’s languages?”

he started scribbling notes on an entirely new grammar that would eventually incorporate not only Wakashan evidentiality and Guugu Yimithirr coördinates but also Niger-Kordofanian aspectual systems, the nominal cases of Basque, the fourth-person referent found in several nearly extinct Native American languages, and a dozen other wild ways of forming sentences.

he discovered “Metaphors We Live By,” a seminal book, published in 1980, by the cognitive linguists George Lakoff and Mark Johnson, which argues that the way we think is structured by conceptual systems that are largely metaphorical in nature. Life is a journey. Time is money. Argument is war. For better or worse, these figures of speech are profoundly embedded in how we think.

I asked him if he could come up with an entirely new concept on the spot, one for which there was no word in any existing language. He thought about it for a moment. “Well, no language, as far as I know, has a single word for that chin-stroking moment you get, often accompanied by a frown on your face, when someone expresses an idea that you’ve never thought of and you have a moment of suddenly seeing possibilities you never saw before.” He paused, as if leafing through a mental dictionary. “In Ithkuil, it’s ašţal.”

Many conlanging projects begin with a simple premise that violates the inherited conventions of linguistics in some new way. Aeo uses only vowels. Kēlen has no verbs. Toki Pona, a language inspired by Taoist ideals, was designed to test how simple a language could be. It has just a hundred and twenty-three words and fourteen basic sound units. Brithenig is an answer to the question of what English might have sounded like as a Romance language, if vulgar Latin had taken root on the British Isles. Láadan, a feminist language developed in the early nineteen-eighties, includes words like radíidin, defined as a “non-holiday, a time allegedly a holiday but actually so much a burden because of work and preparations that it is a dreaded occasion; especially when there are too many guests and none of them help.”

most conlangers come to their craft by way of fantasy and science fiction. J. R. R. Tolkien, who called conlanging his “secret vice,” maintained that he created the “Lord of the Rings” trilogy for the primary purpose of giving his invented languages, Quenya, Sindarin, and Khuzdul, a universe in which they could be spoken. And arguably the most commercially successful invented language of all time is Klingon, which has its own translation of “Hamlet” and a dictionary that has sold more than three hundred thousand copies.

He imagined that Ithkuil might be able to do what Lakoff and Johnson said natural languages could not: force its speakers to precisely identify what they mean to say. No hemming, no hawing, no hiding true meaning behind jargon and metaphor. By requiring speakers to carefully consider the meaning of their words, he hoped that his analytical language would force many of the subterranean quirks of human cognition to the surface, and free people from the bugs that infect their thinking.

Brown based the grammar for his ten-thousand-word language, called Loglan, on the rules of formal predicate logic used by analytical philosophers. He hoped that, by training research subjects to speak Loglan, he might turn them into more logical thinkers. If we could change how we think by changing how we speak, then the radical possibility existed of creating a new human condition.

today the stronger versions of the Sapir-Whorf hypothesis have “sunk into . . . disrepute among respectable linguists,” as Guy Deutscher writes, in “Through the Looking Glass: Why the World Looks Different in Other Languages.” But, as Deutscher points out, there is evidence to support the less radical assertion that the particular language we speak influences how we perceive the world. For example, speakers of gendered languages, like Spanish, in which all nouns are either masculine or feminine, actually seem to think about objects differently depending on whether the language treats them as masculine or feminine

The final version of Ithkuil, which Quijada published in 2011, has twenty-two grammatical categories for verbs, compared with the six—tense, aspect, person, number, mood, and voice—that exist in English. Eighteen hundred distinct suffixes further refine a speaker’s intent. Through a process of laborious conjugation that would befuddle even the most competent Latin grammarian, Ithkuil requires a speaker to home in on the exact idea he means to express, and attempts to remove any possibility for vagueness.

Every language has its own phonemic inventory, or library of sounds, from which a speaker can string together words. Consonant-poor Hawaiian has just thirteen phonemes. English has around forty-two, depending on dialect. In order to pack as much meaning as possible into each word, Ithkuil has fifty-eight phonemes. The original version of the language included a repertoire of grunts, wheezes, and hacks that are borrowed from some of the world’s most obscure tongues. One particular hard-to-make clicklike sound, a voiceless uvular ejective affricate, has been found in only a few other languages, including the Caucasian language Ubykh, whose last native speaker died in 1992.

Human interactions are governed by a set of implicit codes that can sometimes seem frustratingly opaque, and whose misreading can quickly put you on the outside looking in. Irony, metaphor, ambiguity: these are the ingenious instruments that allow us to mean more than we say. But in Ithkuil ambiguity is quashed in the interest of making all that is implicit explicit. An ironic statement is tagged with the verbal affix ’kçç. Hyperbolic statements are inflected by the letter ’m.

“I wanted to use Ithkuil to show how you would discuss philosophy and emotional states transparently,” Quijada said. To attempt to translate a thought into Ithkuil requires investigating a spectrum of subtle variations in meaning that are not recorded in any natural language. You cannot express a thought without first considering all the neighboring thoughts that it is not. Though words in Ithkuil may sound like a hacking cough, they have an inherent and unavoidable depth. “It’s the ideal language for political and philosophical debate—any forum where people hide their intent or obfuscate behind language,” Quijada co

In Ithkuil, the difference between glimpsing, glancing, and gawking is the mere flick of a vowel. Each of these distinctions is expressed simply as a conjugation of the root word for vision. Hunched over the dining-room table, Quijada showed me how he would translate “gawk” into Ithkuil. First, though, since words in Ithkuil are assembled from individual atoms of meaning, he had to engage in some introspection about what exactly he meant to say.For fifteen minutes, he flipped backward and forward through his thick spiral-bound manuscript, scratching his head, pondering each of the word’s aspects, as he packed the verb with all of gawking’s many connotations. As he assembled the evolving word from its constituent meanings, he scribbled its pieces on a notepad. He added the “second degree of the affix for expectation of outcome” to suggest an element of surprise that is more than mere unpreparedness but less than outright shock, and the “third degree of the affix for contextual appropriateness” to suggest an element of impropriety that is less than scandalous but more than simply eyebrow-raising. As he rapped his pen against the notepad, he paged through his manuscript in search of the third pattern of the first stem of the root for “shock” to suggest a “non-volitional physiological response,” and then, after several moments of contemplation, he decided that gawking required the use of the “resultative format” to suggest “an event which occurs in conjunction with the conflated sense but is also caused by it.” He eventually emerged with a tiny word that hardly rolled off the tongue: apq’uxasiu. He spoke the first clacking syllable aloud a couple of times before deciding that he had the pronunciation right, and then wrote it down in the script he had invented for printed Ithkuil:

“You can make up words by the millions to describe concepts that have never existed in any language before,” he said.

Neither Sapir nor Whorf formulated a definitive version of the hypothesis that bears their names, but in general the theory argues that the language we speak actually shapes our experience of reality. Speakers of different languages think differently. Stronger versions of the hypothesis go even further than this, to suggest that language constrains the set of possible thoughts that we can have. In 1955, a sociologist and science-fiction writer named James Cooke Brown decided he would test the Sapir-Whorf hypothesis by creating a “culturally neutral” “model language” that might recondition its speakers’ brains.

“We think that when a person learns Ithkuil his brain works faster,” Vishneva told him, in Russian. She spoke through a translator, as neither she nor Quijada was yet fluent in their shared language. “With Ithkuil, you always have to be reflecting on yourself. Using Ithkuil, we can see things that exist but don’t have names, in the same way that Mendeleyev’s periodic table showed gaps where we knew elements should be that had yet to be discovered.”

Lakoff, who is seventy-one, bearded, and, like Quijada, broadly built, seemed to have read a fair portion of the Ithkuil manuscript and familiarized himself with the language’s nuances.“There are a whole lot of questions I have about this,” he told Quijada, and then explained how he felt Quijada had misread his work on metaphor. “Metaphors don’t just show up in language,” he said. “The metaphor isn’t in the word, it’s in the idea,” and it can’t be wished away with grammar.“For me, as a linguist looking at this, I have to say, ‘O.K., this isn’t going to be used.’ It has an assumption of efficiency that really isn’t efficient, given how the brain works. It misses the metaphor stuff. But the parts that are successful are really nontrivial. This may be an impossible language,” he said. “But if you think of it as a conceptual-art project I think it’s fascinating.”

Investment is usually the result of forgoing consumption. In a purely agrarian society, early humans had to choose how much grain to eat after the harvest and how much to save for future planting. The latter was investment.

In a more modern society, we allocate our productive capacity to producing pure consumer goods such as hamburgers and hot dogs, and investment goods such as semiconductor foundries. If we create one dollar worth of hamburgers today, then our gross national product is higher by one dollar.

Investment need not always take the form of a privately owned physical product. The most common example of nonphysical investment is investment in human capital.

In an economy that is closed to the outside world, investment can come only from the forgone consumption—the saving—of private individuals, private firms, or government.

In an open economy, however, investment can surge at the same time that a nation’s saving is low because a country can borrow the resources necessary to invest from neighboring countries.

That economists have a fairly strong understanding of firms’ investment behavior makes sense. A firm that maximizes its profits must address investment using the framework discussed in this article.

The theory of investment dates back to the giants of economics. irving fisher, arthur cecil pigou, and alfred marshall all made contributions; as did john maynard keynes, whose Marshallian user cost theory is a central feature in his General Theory.

Investment fluctuates a lot because the fundamentals that drive investment—output prices, interest rates, and taxes—also fluctuate. But economists do not fully understand fluctuations in investment. Indeed, the sharp swings in investment that occur might require an extension to the Jorgenson theory.

In Jorgenson’s user cost model, firms will purchase a machine if the extra revenue the machine generates is a smidgen more than its cost.

The general conclusion is that there is a gain to waiting if there is uncertainty and if the installation of the machine entails sunk costs, that is, costs that cannot be recovered once spent.

Although quantifying this gain exactly is a highly mathematical exercise, the reasoning is straightforward. That would explain why firms typically want to invest only in projects that have a high expected profit.

The fact of irreversibility might explain the large fluctuations in investment that we observe.

This method of financing investment has been very important in the United States. The industrial base of the United States in the nineteenth century—railroads, factories, and so on—was built on foreign finance, especially from Britain. More recently, the United States has repeatedly posted significant investment growth and very low savings.

Consumer behavior is harder to study than firms’ behavior. Market forces that drive irrational people out of the marketplace are much weaker than market forces that drive bad companies from the market.

Because the saving response of consumers must be known if one is to fully understand the impact of any investment policy, and because saving behavior is so poorly understood, much work remains to be done.

That’s because real people — and yes, even professional economists — tend to process the parallel rise of prices and wages in quite different ways.

In brief, researchers have found that we tend to internalize the gains due to inflation and externalize the losses. These different processes yield different emotional responses.

Let’s start with higher prices. Sticker shock hurts. Even as someone who closely studies the inflation statistics, I’m still often surprised by higher prices. They feel unfair. They undermine my spending power, and my sense of control and order.

in reality, higher prices are only the first act of the inflationary play. It’s a play that economists have seen before. In episode after episode, surges in prices have led to — or been preceded by — a proportional surge in wages.

Even though wages tend to rise hand-in-hand with prices, we tell ourselves a different story, in which the wage rises we get have nothing to do with price rises that cause them.

But then my economist brain took over, and slowly it sunk in that my raise wasn’t a reward for hard work, but rather a cost-of-living adjustment

Internalizing the gain and externalizing the cost of inflation protects you from this deflating realization. But it also distorts your sense of reality.

The reason so many Americans feel that inflation is stealing their purchasing power is that they give themselves unearned credit for the offsetting wage rises that actually restore it.

younger folks — anyone under 60 — had never experienced sustained inflation rates greater than 5 percent in their adult lives. And I think this explains why they’re so angry about today’s inflation.

While older Americans understood that the pain of inflation is transitory, younger folks aren’t so sure. Inflation is a lot scarier when you fear that today’s price rises will permanently undermine your ability to make ends meet.

Perhaps this explains why the recent moderate burst of inflation has created seemingly more anxiety than previous inflationary episodes.

More generally, being an economist makes me an optimist. Social media is awash with (false) claims that we’re in a “silent depression,” and those who want to make American great again are certain it was once so much better.

in reality, our economy this year is larger, more productive and will yield higher average incomes than in any prior year on record in American history

And because the United States is the world’s richest major economy, we can now say that we are almost certainly part of the richest large society in its richest year in the history of humanity.

The income of the average American will double approximately every 39 years. And so when my kids are my age, average income will be roughly double what it is today. Far from being fearful for my kids, I’m envious of the extraordinary riches their generation will enjoy.

Psychologists describe anxiety disorders as occurring when the panic you feel is out of proportion to the danger you face. By this definition, we’re in the midst of a macroeconomic anxiety attack.

Some of the worst leadership decisions of our time can be traced to escalation of commitment. Many people lost their lives because American presidents pursued a futile war in Vietnam — and continued searching for weapons of mass destruction that weren’t in Iraq.

Escalation of commitment helps to explain why leaders are often so reluctant to loosen their grip on power. Losing a high-status position can make them feel as if they’re losing their place in the world. It leaves them with bruised egos and wounded pride.

we use our big brains not to make rational decisions, but rather to rationalize the decisions we’ve already made

Escalation is likely when people are directly responsible for and publicly attached to a decision, when it has been a long journey and the end is in sight, and when they have reasons to be confident that they can succeed.

President Biden’s current situation checks all those boxes

the people closest to a leader are precisely the ones who are most susceptible to confirmation bias. They’re too personally invested in his success and too likely to dismiss warning signs.

What Mr. Biden needs is not a support network but a challenge network — people who have the will to put the country’s interests ahead of his and the skill to coldly assess his chances.