The transcript from this week’s MiB podcast with Tom Gilovich is below.
You can stream/download the full conversation, including the podcast extras, on Bloomberg, iTunes, Overcast, and Soundcloud. Our earlier podcasts can all be found on iTunes, Soundcloud, Overcast and Bloomberg.
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ANNOUNCER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio.
BARRY RITHOLTZ, HOST: This week on the podcast, I have an extra special guest. His name is Tom Gilovich, he is a professor of psychology at Cornell University and I have to say he is a person who has had over the years, tremendous influence on my career although admittedly unknowingly, I began in this industry as a trader and I was frequently perplexed and fascinated by why the people on the desk around me were doing either poorly or well any given day, week, month, and I eventually figured out it wasn’t that one guy was smarter than another or someone had more knowledge, it was their own behavior that led to their success or failures. And so I started hunting for some information about why people made certain behavioral decisions that they did.
I ended up tracking down a book of his from 1991, “How We Know What Isn’t So” and that pretty much sent me down the rabbit hole of behavioral economics which has been a tremendous asset to me both in the world of finance and media. Understanding what motivates people to make either good or bad decisions with their money is a tremendous asset both what you should be doing with your money and what you should be advising other people to do with their money.
This is, to me, one of the more fascinating conversations that you’ll hear if you are at all interested in fill in the blank, psychology, behavioral economics, heuristics, biases, et cetera, I could’ve gone on for another three hours with him I barely got to scratch the surface of all my questions.
With no further ado, my conversation with Tom Gilovich.
I have an extra special guest this week and his name is Professor Thomas Gilovich, he is a professor of psychology at Cornell University, he has published numerous peer-reviewed works on cognition and heuristics and is among the most cited academics in the field working on behavioral psychology and economics.
His work has debunked to the idea of the hot hand in basketball, the spotlight affect, the bias blind site, clustering allusion, and numerous other cognitive issues are in his purview, he is the author of numerous books including a textbook on heuristics and biases. He is the co-author of “Why Smart People Make Big Money Mistakes And What You Can Do To Correct Them.”
I became familiar with his work “How We Know What Isn’t So: The Fallibility of Human Reason in Everyday Life.” It was one of the first popular books on behavioral economics and one that I found incredibly influential. Thomas Gilovich, welcome to Bloomberg.
THOMAS GILOVICH, PROFESSOR, CORNELL UNIVERSITY: Happy to be here.
RITHOLTZ: Let’s start out with how we know what isn’t so, you begin the book with a quote from Artemis Ward, “It ain’t the things we don’t know that get us into trouble, it’s the things we know that just ain’t so.” Tell us about that.
GILOVICH: Well if we are convinced of things that aren’t true, we’re going to go down certain paths that aren’t going to be productive and that quote captures that idea very well. And what I like about that quote is that most people attribute it to Mark Twain or Will Rogers, the source I thought at the time was Artemis Ward and maybe two years after the publication of a book, a reader wrote to me and said well it’s really interesting, you are sort of telling everyone they got it wrong with Will Rogers and Mark Twain, but in fact it goes back even earlier than Artemis Ward to someone named Josh Billings that I hadn’t heard of.
So it’s kind of ironic starting off a book on allusion and error, the very first sentence of the book contains a citation error at least.
RITHOLTZ: But that citation error did not lead you down a path filled with errors, let’s discuss a little bit about the things that you discovered and published in the book and we’ll begin with a very simple question, what are heuristics and biases?
GILOVICH: Well the bias part is quite easy it’s a term that people are familiar with when there’s a systematic departure between a belief that you have in reality or a tendency to choose to veer in one direction when you should be bearing in another direction, so it’s a systematic departure from reality or the best assessment of reality.
Heuristics is a little more complicated for most folks, it’s generally defined in the behavioral economics world as a rough approximation seat-of-the-pants —
RITHOLTZ: Rule of thumb.
GILOVICH: Rule of thumb is another way of describing it, yes.
RITHOLTZ: And why do these heuristics lead people down the wrong path?
GILOVICH: Because they generally work pretty well in one of the earliest examples used and applied to psychology was Daniel Kahnemann and Amos Tversky’s examples of we use the clarity of an image as a cue for how far away it is. The farther things are, the harder it is to see them clearly, so they will see more indistinct and that generally works pretty well. We’re able to see whether something very far away is relatively close up.
But on a hazy day, that’s going to make things seem farther away than they really are and conversely on a spectacularly clear day, you often have the reaction of whoa those mountains are — I didn’t realize they were that close.
RITHOLTZ: Let’s use another example of some biases, you’re in line at the supermarket and your line doesn’t seem to be moving, the line next to you really looks like it’s flying, are you waiting for a tollbooth? I know parts of the country still have tollbooths and you switch lines and suddenly the line you’re in comes to a dead halt and the line you just left seems to be moving.
What is it about our life experience that causes that illusion or is it an illusion?
GILOVICH: That one as far as the grocery lines, I don’t know if anyone has formally studied it, but you have to ask what principle of the universe would there be that would systematically distort things such that whenever you moved to a line, it would slow down and the line that you are in suddenly sped up.
But it’s easy to explain why people would believe that, even if it’s not true. That is to say those times when you stay in your overly busy line, you’re tempted to move to another one and it turns out that that you can see that that would’ve been a better thing, your line stays slow, you can see people speeding through the other line, that bothers you, but you get over it.
If on the other hand you make the opposite mistake — you switch to the seemingly speedy line and it slows down — the line you are in suddenly speeds up, you are going to kick yourself and say why did I do that? I was in the right line, I brought this on myself and it’s more annoying and because it’s more annoying, it’s more memorable and therefore you’re going to have a distorted sense in your head of how common it is.
Very much like there’s a belief in the sports world, the baseball world that if your team, your pitcher has a no-hitter in progress, don’t comment on it and that’s partly fed by the idea that if your pitcher does have a no-hitter and you say, oh we got a no-hitter going this is great and then they lose it, you draw an association between those two and those are going to stand out and you are going to think that it’s what you’ve done has played some determined role which of course hasn’t.
RITHOLTZ: So let’s talk a little about mean reversion. Very often, when we see things that are outliers to the upset or the downside, we’re sort of surprised when the next item in that series is not as extreme be it how fast the line is moving or how easily a no-hitter is lost and goes back to normal — issues why do people have such a hard time with mean reversion?
GILOVICH: That’s a great question and there are a number of things that contribute to this belief, the failure to recognize the fact that regression to the mean is happening and one of them is that it is the same story that I’ve described before which is when it reverts and particularly when it reverts after you’ve done something that that stands out in your memory more and distorts your — the intuitive database that you have in your head.
And so there a lot of superstitions that are essentially a failure to recognize the operational progression, the Sports Illustrated Jinx being one of them that it’s believed that if you get your picture on the cover of Sports Illustrated, but that’s bad luck and doesn’t take that much insight to recognize that really is a mean aversion account that is you only get your picture on the cover of Sports Illustrated if you had a run of success and extraordinary success at time one is going to be followed not by abject failure but by somewhat less extreme run of success afterwards.
So you’re right there on the peak on average people to do less well the next time that gives rise to this belief that it’s bad luck to be pictured on the cover of Sports Illustrated magazine. And people — athletes truly believe it, some of them have turned down the opportunity to be on the cover of Sports Illustrated simply because they thought it was bad luck.
RITHOLTZ: Let’s talk a little about the hot hands in basketball. You first wrote about this affect with the Amos Tversky, is about 30 years ago, is that right?
GILOVICH: Yes, the paper came out in 1985.
RITHOLTZ: So tell us what your studies found and how you want about proving that the hot hands wasn’t everything it appeared to be?
GILOVICH: The belief in the hot hand is just one of the most powerful and firmly held beliefs that we have if you’ve ever played or watched the game of basketball it just seems like people get on the streaks where they can do no wrong.
RITHOLTZ: I am in the zone.
GILOVICH: Absolutely and it’s incredibly compelling that you’ve made a few shots the game just seems easier it seems like you don’t even have to attend to the basket as much as normal and it just goes in, it absolutely compelling.
RITHOLTZ: Michael Jordan used to say there are times when the rim looks bigger.
GILOVICH: Yes, absolutely, and we wondered whether there was less to that belief than basketball players think. We’re not — we don’t want to challenge the feeling, there’s no question that when you’ve done well you feel different differently, and when you’ve done poorly you feel differently, the basket seems to have shrunk, it seems like the best damn shot is going to go partly in the cylinder and pop right out. No questioning that. But the belief in the hot hand is really a three-link chain previous performance affects how you feel, how you feel affect subsequent performance, and we were interested in the link between the second and third the thought was that we exaggerate that for many of the same psychological principles we have already talked about.
And when we tested it, our hypothesis was that people are going to exaggerate how much heat there is how much streakiness there is in performance and when we did the analysis, it turned out there was no connection between link to and three that is how you feel doesn’t seem to influence how you perform in the future at least at the professional level.
RITHOLTZ: So let’s be really precise with that, when you say there is no link, there’s not even the slight improvement, loose some, hitting shots, am feeling good, each subsequent basket, what is the correlation with the future success whether I made a few in a row or I missed a few in a row?
GILOVICH: Yes, two things are important there. One is there may be some ways in which you experienced some success, you feel different and it might influence your future behavior that we haven’t studied, we put aside from the hot hand idea which is I’ve done well maybe I’m a more energetic player, I play better defense, I get more rebounds, we don’t know about that and that may be true.
What we did look at — do you become a better shooter not to take more shots you made you probably do take more shots because you’re feeling hot, the question is are you more likely to make a shot after having succeeded in the past versus after having failed and the data show, and this remains controversial for 30 years, there’s been back and forth all the challenges to it for decades have not stood up, there’s a recent challenge that’s among the more interesting ones, so I have to say it remains controversial, our original hypothesis isn’t controversial that is to say people wildly over estimate the extent to which people are hot or how streaky people are.
Whether there is any sort of carryover, that remains bit controversial.
RITHOLTZ: So some of the pushback has been you know player gets hot and the defense collapses on them and they have less good looks at the basket and so naturally after a certain streak, they are going to start missing but you don’t have that same defensive pressure with foul shooting, do you?
GILOVICH: That is right.
RITHOLTZ: And what does the data show with that?
GILOVICH: The data show that the outcome of the second free throws completely independent of the outcome of the first.
RITHOLTZ: Totally so if you see hit or miss the first one, the outcome of the second one is statistically no different?
GILOVICH: Right. And a lot of basketball players and fans will say that I’m not so impressed by that because you can’t really be streaky when it comes to free throws how they say that after the fact but —
RITHOLTZ: I mean you are standing there nobody’s guarding you, there are certain, think of Reggie Miller of the Indiana Pacers, used to shoot like 93 percent free throws, he was an outstanding free-throw shooter, why would people not assume that if there is a streak when you’re on the — on the court why would you not assume there is a streak at the foul line?
GILOVICH: I think they say that after having seen the data and they want to maintain that belief, but we went a step further and we conducted and other people have done this too — where you have people shoot in the gym for you and the feeling for all of us who have played basketball is — you can feel it in warm up sometimes, it doesn’t have to be in the heat of the game that you can feel hot and we have people take a series of shots along an arc, an equidistance from the basket, and before each shot they place a bet on themselves, take a risky bet if they are feeling hot or more conservative that if they are not feeling so hot.
And turns out we can predict the best they are going to make — that is if they’ve made several shots in a row, that is a very strong predictor of whether they’re going to choose the risky bet or not; however, the bets that they choose are not very good predictors of what’s going to happen next, again, this three link chain, no problem of during the first and the second.
How you’ve done influences how you feel. But surprisingly, how you feel has either no or very little impact on your likelihood of making the next shot. And again, I want to stress, it has to do with your ability to as they now say score the basketball to get the ball in the cylinder, it may affect you in other ways, it may make you a better defender, better passer or whatever.
RITHOLTZ: So about a year and half ago, I read the book by Michael Lewis, “The Undoing Project” about Danny Kahnemann and Amos Tversky, you wrote the hot hand paper with the Amos Tversky, what was it like working with him?
GILOVICH: I mean, it was certainly a highlight of my career and subsequently had the great opportunity to have worked with Danny Kahnemann as well and Amos is brilliant as you know, as comes across in “The Undoing Project” and one of the things that I most liked about working with him, one of the great lessons and this applies equally as well to Kahnemann, they are both brilliant and it’s fun to be in close proximity to brilliance, but that’s not enough. Both of these guys were incredibly hard-working and detailed oriented and one of the things I learned from Amos, it is kind of similar to this saying people have about golf that you know you drive for show and you putt for dough.
That you know when we were basically done with our hot hand paper in fact, as a young person I thought we were done, he would several times, Tom come in, here I moved this sentence around here and I’ve changed this word, and the thought was — the lesson was if someone of his stature is really sweating the details right here at the very end just making the paper a little better in these marginal ways, I can do that too and it’s just been a very helpful lesson. You are never really done and things can always be made better and both Kahnemann and Tversky are you know, they are into what they’re doing, passionately care about it, and it shows in their ability to throw themselves into it and there’s no — being brilliant is great and both of them are, but to get to their level, you also have to have a great capacity for hard work and great enthusiasm for what you are doing which both of them did do.
RITHOLTZ: Brilliance is necessary but not sufficient.
GILOVICH: Yes, yes, well said.
RITHOLTZ: Let’s talk a little bit about some of your research on happiness and how do you either get happy or avoid unhappiness, let’s begin with a discussion of regret, what is it that people regret more? The things they do or the things that they decide not to do.
GILOVICH: I think one thing that’s interesting about that question is that it depends upon when you’re talking about it. That — in the immediate aftermath of a mistake of action, that just hurts a lot more than omission and you see that everywhere, it plays out in the example that you started with about the grocery store line that if you switch from a slow line to one that is seemingly faster and it slows down and you just kick yourself, I was in a better line, why did I switch?
The example at a University of course that I think everyone can relate to his people taking multiple-choice tests and you have the common experience of zipping along on this one’s B, well wait a minute, maybe it’s D and you go back and forth, should I stick with my initial hunch or should I switch to now what I think that it is, turns out people have studied that and if you face that dilemma, you’re much more likely to get the right answer by switching than staying. Students believe the complete opposite, it is better to go with your initial gut instinct.
And so their belief is incorrect — doesn’t fit the data that’s been observed but it’s easy to see why they would believe that. That is if you thought it was B and then you convince yourself to switch to D, you erase it, now you are endorsing B and it turns out you are right, you are going to kick yourself, I had the — I had the right answer I knew it, you did.
RITHOLTZ: So short term, the bias against action is the manifestation of regret aversion, we don’t want to do something that we ultimately regret, but then how does that play out with the sort of deathbed statements we’ve seen from people? I should’ve done X.
GILOVICH: Yes, that’s the interesting part, this change from the close temporal proximity to a distant perspective and over time, we do things with our — because our mistakes of action are so painful, we do things about them, we make amends to other people, we engage in what psychologists call cognitive dissonance reduction to make ourselves feel better about it, we identify and part of that is identifying the silver lining if you ask people about some of their biggest regrets, people will say oh I married the wrong person but they will say yeah that was a mistake but I wouldn’t have these great kids if I hadn’t done that.
So the marriage ended but turned out to been a good thing is I have these kids that I love. And so there’s all this mental stuff you do to make yourself more comfortable with many at least mistakes of action, whereas things that you didn’t do rather than shrinking over time they often grow, you often think, you know, if I’d only taken that class that would’ve gone into this profession rather than this one, and you imagine all the great things that could’ve happened.
So over time, regrets of inaction either don’t shrink like the action ones do or that even grow over time, and so you as you said, on people’s deathbeds, they regret more of the things that they didn’t do, I could’ve been a contender, I could’ve been this, I could’ve been that.
RITHOLTZ: So actions become rationalized and we learn to deal with our mistakes but inactions blow up in our minds to become these mythic if only.
GILOVICH: Yes.
RITHOLTZ: So let’s talk about something sort of related to that, you’ve created a little bit of the stir not too long ago expressing the belief that you know we’re a consumer society and everybody wants the 2.3 kids and the four-bedroom house and the convertible car and the boat or what have you — but your conclusion is experiences are more valuable to individuals then these baubles and goods, explain how you came to that conclusion and what it means?
GILOVICH: That line of research stemmed from a finding probably the biggest finding in the now quite extensive research on happiness or well-being, which is that we have a remarkable capacity to adapt to things and that’s a good capacity when bad things happen to us. Oh no, I’ve lost my job, life’s going to fall apart, well that is a bad thing and you are miserable for a while but we tend to adapt to it or many people think I don’t think I’d even want to live if I lost the use of my legs, let’s say, well, turns out, the people who experienced that, yes they are miserable right away but they adapt and live lives that are as fulfilling as people who haven’t had that misfortune.
And this is just the probably biggest fact about the study of happiness and so it applying it to consumption, the things that we buy, you know if I traded in my Camry and get a Lexus, I’ll be happier, yet that’s true, you will be for little while pretty soon it’s just a car like the other car and you don’t notice it as much, and so one challenge for happiness researchers is if adaptation is an enemy of happiness, how do you combat that enemy? And the great judgment decision-making researcher Robin Dawes had a thought experiment where he was talking about this hedonic treadmill, I need more and more to get the same level of happiness.
He said imagine you devoted your life not to selfish pursuits accumulating more but selfless ones, you were just trying to do good in the world, I don’t know if he used — I think he did use the Mother Theresa example, Mother Theresa saves five people this week, she probably isn’t the next week, going five people, that doesn’t cut it, I need to save more, I need to save more and it’s a compelling thought experiment and it seemed like those kinds of experiences at least weren’t subject to this adaptation, this hedonic treadmill.
And so the question became how broadly does that apply to experiences and the hypothesis was you don’t adapt to the money that you spend — the pleasure that you get out of your experiences, you don’t adapt to them as much which in some ways is paradoxical, that is most people have limited resources and people often say you know I know I would love a vacation right now but we really need a new set of bookcases, we need a new bed or we need a new car or whatever.
And at least that will always be there and that’s true in a material sense, but psychologically, it’s the reverse, you adapt to the new bookcase, you adapt to the upgrade in your car of the things that you buy and it turns out you don’t adapt as much to your experiences, your experiences change who you are and you are a changed person then you continue to benefit from that.
Your experiences connect you to other people in ways that your material goods don’t and that continues to be a gift that keeps on giving. And so it turns out and a lot of research has shown this — that even though the experience comes and goes possibly in a flash, it lives on psychologically and provides more enduring satisfaction and enjoyment.
RITHOLTZ: How much of the material issues are based on the very natural tendency of us to not be very good at predicting our own future happiness or our own future emotional state? It seems we build up these things we want, be it a house, a car, whatever, and then we actually get it, it disappoints our expectations of this grand change of lifestyle?
GILOVICH: Well, you’ve identified a very interesting line of research of five would seem like one of the easiest things to predict would be how happy we’re going to be — making predictions about ourselves, predicting the world of course is hard but it would seem to be easy to predict how we’re going to react.
And I think it’s just a very compelling line of research that now many investigators have done showing that, we’re not so good prognosticators about our own enjoyment and one of the examples that I most like in this area is that people feel like I’ll be happier if I have a bigger house and when you first move into it, you will be happier. Again before you adapt to this new amount of space and that becomes the norm, this bigger house, and now you feel like you need even more and more, anyway, in order to afford that bigger house, people often have to live farther away from their job and they have a longer commute and one of the exceptions in this tendency that I described, this remarkable capacity for adaptation is that people don’t tend to adapt to the trauma of a long commute.
And it’s not surprising why that would be the case that is — it’s a it’s a amorphous highly variable thing, it’s a different version of hell each time you’re driving, sometimes it’s a snarl over here other times it’s a nasty motorist there, it’s different but and you don’t adapt to it and so you’ve made this terrible trade-off, you think you are going to be happier with the bigger house, you get the bigger house, you are happy for a while then you adapt to it, you’re saddled with this long commute to which you don’t adapt, and so you’ve lost out on the bargain.
RITHOLTZ: So here is a quote from one of your books. People do not hold questionable beliefs because they have not been exposed to the relevant evidence, why do they hold questionable beliefs?
GILOVICH: Well for a variety of reasons and that’s what the book was about was exploring those different reasons and one is that the world doesn’t play fair, that is, it doesn’t stop — it doesn’t put you through a series of controlled experiments. It highlights certain data and says hey look at me and puts other data in the shadows. And — as a result of that, the database we have in our head is going to be somewhat biased and we have already talked about a few examples of that that is to say when you switch lines and it slows down, that’s going to leave more of an impression then when you switch lines and it speeds up and that’s going to distort your database.
Cornell University when it decides who gets to go there, it probably congratulates itself because we look around at the student body and they are terrific, and we say, boy we’re really good at selecting people. Now of course, we don’t really know that because we don’t know about the people who we rejected who could be there and maybe they do just as well. That is people self select — only really good students by in large or even applying to Cornell and maybe we don’t do as good a job as we think.
The world can’t show us the people that we didn’t accept and therefore it’s hard to really know whether we’re doing a good job, but the impression is every bit it’s there we look around at the student body, you can’t turn that impression off, and the students look great so we think we did a good job.
RITHOLTZ: You once called confirmation bias the mother of all biases, tell us why.
GILOVICH: Boy that’s a term that has been in the news all over lately and —
RITHOLTZ: I wonder why.
GILOVICH: There are many things that people mean by the subject confirmation bias.
RITHOLTZ: So let me break that down to three things because there is some nuance in confirmation bias and in the academic study of that, so I think what most people think of when they think of confirmation bias if we’re talking about Facebook and fake news, people go out seeking things that confirm existing beliefs. That’s a broad definition of confirmation bias.
But in some of your research and some of your studies, I was kind of fascinated by this when people are presented with a problem, rather than seeking disapproving evidence they go out and seek confirming evidence, even though you can end up with the exact wrong answer, or the same answer regardless of the question based on how it is. The example and one of the books is you have a court that has to decide which parent to award custody of the child to, parent A is pretty much average across all the major characteristics the court looks at, parent B has some very high points and some very low points depending on how the question is phrased which parent should be awarded custody, which parent should not be awarded custody? Everybody ends up looking at the parent with the high points and low points because it’s confirming whatever the question is asking is that what you were referring to the more nuanced aspect of confirmation bias?
GILOVICH: Yes, Barry that’s great that you broke it down that way, that is to say people are very familiar with the idea that we’re easier on evidence that supports what we want to believe and we’re hard on evidence that rebuts what we want to believe and that’s now part of the confirmation bias that’s a thing. We recognize that, great. People are also aware of the fact that if I want something to be true, I actively go out and look for evidence consistent with it, if I want something not to be true, I will go actively look for evidence that’s inconsistent with it. We can call that the confirmation bias, that’s true, there is evidence to support that, but the confirmation bias is even more insidious, more pervasive than that, that is even if you don’t care about what the situation or question, what the right answer might be like should you award custody to this person or that person, we still engage in this.
One example that I think makes this clear is suppose I’m hosting a dinner party and I tell you you’re going to be sitting next to John. I think John’s politically conservative, you just might want to — but you might want to test that out, I’m not sure. How would you test that out? Well you would ask conservative oriented questions. You would say John don’t you think the government is too intrusive sometimes? And then he, as a conservative, would say yes, but even a liberal would say well sometime sure the governments to intrusive.
If I told you how you can be sitting next. I think is politically liberal you might want to check that out. You might ask a very different question. John we need to do something about global warming, don’t you think we need to do something about income inequality? And if he’s liberal, he’ll say yes, but if you’re a conservative at least when it comes to income inequality you are going to say, yes, we need to do things about it, it might be different things that a liberal, but the thrust is you I get answers that support what you initially believed.
And it’s so — all this is to say that the confirmation bias runs really deep and one of my favorite examples of this is a old study of Amos Tversky’s who this was before he was interested in the kind of judgmental biases that economists have become interested in, he was just interested in judgments of similarity.
What — how do we say that — why do we say that having a kid is a little bit like having a dog but having a dog is nothing like having a kid, you know why that discrepancy? Why is North Korea a lot like China but China is not really much like North Korea?
And so he did this study where he asked people which two countries, this was in the 1980s, are more similar to one another — East Germany and West Germany or Ceylon and Nepal. The respondents know more about East Germany and West Germany, so they can think of more reasons more ways in which they are similar and so they say East Germany and West Germany is more similar, OK, no big deal there, no one made a problem, no one made an error.
He asked another group of participants which two countries are more dissimilar to one another East Germany and West Germany and they say East Germany West Germany are more dissimilar to one another because they know more about East Germany and West Germany, they could think of ways in which they are different and you end up with the paradoxical result with East Germany and West Germany being both more similar and more dissimilar.
Logically impossible, but psychologically the rules of similarity and dissimilarity judgments are such that both can seem very compelling, and it’s the confirmation bias, you asked me how similar they are I look for evidence of similarity, and I can find it for the countries I know more about than the countries I know less about, you ask me which two countries are more dissimilar, I’m looking for evidence of dissimilarity I don’t care which two countries are similar or dissimilar, it just shows you how deep the confirmation bias runs.
RITHOLTZ: So there was a slip of the tongue that you referenced where you — somebody said I’ll see it when I believe it as opposed to saying I will believe it when I see it, but really there is some Freudian truths in that, I’ll see it when I believe it tells us how much our own ownership of ideas and desire to see things we already believe actually impacts that.
How does this manifests itself in the field of investing? How do you see confirmation bias impacting the way people put capital at risk?
GILOVICH: Well it plays out there, the way it plays out everywhere that is to say or let’s back up a step — that you know when you cite that quote, it can sound silly, in some ways, it does sound silly, on the other hand, what job does our brain have? It’s to make sense of the world and we draw upon every possible cues that would make that job easier and one cue that we draw upon is what we already know or what we already think we know.
And therefore what we know has to influence new information that comes in and so if we have a strong prior belief that in this industry is better positioned for the environment we now face rather than that industry, of course we should take that into account, pre-existing beliefs if they are based on a solid foundation, they should influence our evaluation of new information.
RITHOLTZ: So let me ask you him a question about the money illusion. Why is it that we have these unfounded beliefs about values of different things, define what the money illusion is?
GILOVICH: The money illusion is really interesting to psychologists because it’s another version of something you see all over the place, which is a difficulty we have in taking context into account. And so in psychology there’s this phenomenon known as the fundamental attribution error that if you see a dad and a kid in line at the grocery store and the dad yells at the kid, you can’t help but think that’s a mean father.
We don’t know what the context was that led up to it what’s gone on in the person’s life and how exceptional that might’ve been the only time that the dad ever yelled at his kid, but we can’t help but look at the stimulus in front of us and draw conclusions.
And with respect to the money illusion — $20,000 sounds like a lot more than $10,000 and we can lose sight of the context that is to say how much has inflation changed from when you had $10,000 to $20,000 — there obviously circumstances in which in real dollars, the $20,000 is less than the $10,000 you used to have, but it’s hard to get over that first impression of just being taken by the monetary value and to ignore context.
RITHOLTZ: What is the issue with mental accounting?
GILOVICH: Well economists tell us, decision-makers tell us if we want to make the best decisions with our money, we should think of all of our assets and liabilities in terms of one overall integrated balance sheet and in fact, that turns out to be true.
W will make better decisions that way, great; but those we don’t have the kinds of minds that you are capable of doing, or are inclined to do that. Instead, we put money into different accounts and we treat it differently, we treat money differently depending upon where it came from, how we got it and they’re all sorts of examples and very easy to illustrate.
If you received an inheritance from an aunt let’s say who was very careful with her money, you’re probably going to be more careful with that money than if your aunt was a wild and crazy person who liked the spread money around, you are going to feel like I should spread this around.
Money comes with almost the a personality and people often talk about this in the context of getting a smallish bonus you didn’t expect, you get a tax return and it’s small, it feels like hey this is great let’s go spend it.
People do — they often spend it several times, just — it’s used to justify going to this restaurant you always wanted to go to, getting tickets to the Celtic game or whatever and you spent it several times.
If in fact it were a big inheritance, comes with a lot of weightiness associated with it, and even though you have more money, you are less likely to spend it on that restaurant are those Celtic tickets and instead, do something serious with it because it’s a serious amount of money.
RITHOLTZ: In “Why Smart People Make Big Money Mistakes” you tell the joke of the honeymooners in Vegas with mental accounting. The groom while the wife is sleeping takes five dollars and goes down to the roulette table —
Share that story, I love that story. Do you recall it?
GILOVICH: Of course I recall it. So it’s a — it’s a long story takes the money goes to know – bets here – wins —
RITHOLTZ: Let it ride — GILOVICH: — long accumulation of money that ultimately goes one round too far and loses, when he returns oh honey how did you do, oh not bad, I lost five dollars.
RITHOLTZ: Right in the last round, it doubled and doubled and doubled it was tens of millions of dollars, he had to go to a different hotel that would take the bigger stakes and he bets it, loses it all, honey I lost five dollars.
I love that story, I find that —
GILOVICH: Yes and you tell that better than I do.
RITHOLTZ: We have been speaking with Professor Tom Gilovich of Cornell University. If you enjoyed this conversation be sure and check out our podcast extras where we keep the tape rolling and continue discussing all things cognitive. Be sure and check out my daily column, you can find that on BloombergView.com, you can follow me on Twitter @Ritholtz, we love your comments feedback and suggestions, write to us at MIBPodcast@Bloomberg.net.
I’m Barry Ritholtz, you are listening to Masters in Business on Bloomberg Radio.
Welcome to the podcast thank you, Tom, is it Tom? I feel odd calling you Tom because I know you as Professor Gilovich —
GILOVICH: Tom — I only say Thomas when I made a mistake – Thomas when I’ve made a mistake or something — hit a backhand into the net.
RITHOLTZ: So there’s a lot of stuff I want to go over with you that we didn’t get to during the broadcast, but I have to start with the discussion about experiences over consumer material goods. Because there are some stories from that really have stayed with me that have experiences that stayed with me that have forced me down that rabbit hole a little bit.
About five years ago my wife and I went on vacation in St. Lucia and one of the things that was an option at the hotel, we were all the way on the north part of the island and the Grand Pitons are on the south part and you could rent a sailboat and a crew, a two-man crew, for the day — and at the time it seemed like an ungodly amount of money. It was less than $1000 but it’s a day, that’s a lot of money, and I ended up just gritting my teeth and doing it.
And that experience she still talks about consistently. I could’ve bought and thousand dollars piece of jewelry or spent in on any bauble, would never have gotten the ongoing mileage out of that and that’s my favorite example of that. On the other hand there are purchases I’ve made where I continue to derive years later pleasure from the consumer purchase and my best explanation for that is has to do with my expectations of what I’m going to get.
I’m going to give you two quick examples. And we moved houses and we lived in a fairly suburban neighborhood where you feel like you’re the center square with houses next you, behind you, forward and we hadn’t planned on moving in this really fascinating modern house popped up, my wife trolls Zillo all the time.
And we ended up, it’s adjacent to a big preserve so during — in the winter I could see the house across the street from me on the other — about 100 yards away — but during the summer, I feel like I’m living in a forest and you can’t see any neighbors and I’ve only been there three years but I still walk around and think I can’t believe we live here, I’m astonished by it.
That house has not hit the adaptation level yet but when we were in the old house and I was shopping for a new stereo, we were in that house for seven years my wife was constantly canceling the stereo, no, no don’t spend that money on this and ultimately said tell you what, when you move we move to a new house one day, get whatever you want.
So we move and I’m reminds her of this and go out and spent probably too much money on an audio system and truth be told, I hardly ever use it. Who has time to pop in a CD and sit and listen uninterrupted to music for 45 minutes? It just doesn’t happen and I’m shocked at how little actual pleasure I’ve derived from that purchase versus other things cars and houses and what have you.
And it’s always intriguing me how adaptable are we to things, and how much is it reliant upon our own expectations — whether they’re too high or too low?
GILOVICH: Well, we’re doing research, it’s interesting that you raise that question, we’re doing research right now on people’s reasons for making certain purchases and are those reasons born out in that particular question is — we saw on our other research that people will often buy certain material possessions with the thought that that’s going to give a boost to their social life, the prototypical example is I need to get of 40 inch flat screen TV, because I want to have everyone over for the Oscars in the Super Bowl.
And sometimes that does happen, but people in the end up watching the Oscars by themselves or the Super Bowl by themselves more often than they expect.
So the prediction is that you buy certain material things with the expectation it’s going to connect you to other people and that turns out to be true less often than you expect; whereas the experience thing, some of those you buy also with an eye toward doing it with other people and those tend to get confirmed more and that’s part of the experiential advantage.
So we have several studies in the hopper ready to run on that subject and I think your example of buying this place that you love so much and it hasn’t diminished, you right away talked about a we moved to this neighborhood and we’re sort of connected to – and like the other people around you and that’s a case where you bought it for a social reason, it turns out to been confirmed and you got the great hiking ability and vista in the back compare that to a frequent motivation of people buying a new house so we need more square footage or we need three bathrooms rather than two.
Well people with big families used to live in really tiny houses and never really —
RITHOLTZ: One bathroom.
GILOVICH: Yes, and they function just fine, we could function just fine and those are the kinds of things that people adapt to. But if you move your house and suddenly you’re in a better neighborhood than in the —
RITHOLTZ: I’m in the woods, I’m literally – you know there are foxes running down the street and we sort — I live in Long Island, there is not supposed be deer in Nassau County, a deer went bounding across the front yard the other day, I was trying to figure out why the dogs were going crazy, why is there a deer on our street? It never ceases to amaze me. The bigger TV you adapt to in three months you don’t even notice the size of the TV.
GILOVICH: Whereas for you it’s going to be a fox one day, it’s going to be a sunset another day, a sunrise the third day, et cetera; it’s going to be a different little gift each time that has provided this continuing enjoyment that you perceive.
RITHOLTZ: I’m curious as to how our — since you discussed investing and monetary issues, financial issues, I’m curious how our own recognition of whether or not we’re getting a bargain or not what whether — you know are there lots of fast, beautiful cars, I have a hard time wrapping my head around walking into a Ferrari dealer and saying here’s $250,000 I’ll take the red one. Seems like an awful lot of money. On the other hand, when you pick up a car that’s two or three years old and it’s half of the new price it seems like a little more of a rational decision.
I’m curious if you’ve looked at how people feel about the cost or relative cost of what they are purchasing to its value if that has any impact on how they either adapt or continue to enjoy whatever that consumer bauble is.
GILOVICH: Yes, sure. We get utility from all sorts of things and there’s utility from the simple knowledge that it’s a deal, that that provides pleasure and that fact is related to I think the single biggest psychological fact about human beings. It’s so simple, it is such a simple idea but it’s really powerful.
It says something about us and it’s sort of fallen to psychologists to remind the world of this. Economists often want to say that will just incentivize it and then we’ll get more of this behavior, incentives work pretty well for things, but people don’t respond to the incentives themselves, they respond to the meaning that they assigned to those incentives and more broadly, we don’t respond to the stimuli we encounter, we respond to the meaning that we assigned to them.
And there’s so much flexibility in terms of how we construe things that the same purchase thought of for whatever reason as a deal versus not thought that way, just makes all the difference in terms of how much how we feel about it, how much continued enjoyment we get it.
Same thing about virtually everything and in our lives and therefore the determinants of understanding how people are going to interpret a given stimulus is the key to understanding how people are going to behave, it’s the key to running a successful company, certainly it’s the key to running a successful political campaign.
RITHOLTZ: So the other issue I wanted to bring up relevant to this was the endowment effect (ph) and how people place more value on things their own and we’ll stay with cars for a moment, my favorite experience with this is speaking with someone, I get this all the time, hey you’re a car guy, I’m thinking about buying this or that the most recent time it was I’m looking at — he mentioned a Camry or the Honda Accord, which car do you suggest I get? And I’ve learned it’s like when someone says I’m thinking of leaving my wife what you think? Whatever answer is going to come back to bite you.
So I usually say those are both really good cars, what’s your experience with each of them? And I’ll get a laundry list of all the great things about the Camry and all the great things about the Accord, well I don’t think you do poorly with either of them, let me know what you decide.
Six months later you speak to that person and whichever car they picked I’m so glad I picked the Accord, it is the greatest thing since — that was that’s a boring — this is really it doesn’t matter which one they select, but whichever one they select, that’s the winning car, that’s the one they should’ve picked. It’s amazing how what was a coin toss at one point, oh no, this was the only way the decision could’ve gone.
GILOVICH: Yes, and I think there’s an important lesson there that is when we find ourselves in the circumstances where oh my god, this is a weighty decision, I don’t know, six of one half dozen of the other well if you find yourself where you really are torn and there are strong arguments either way, it’s a close call, then just pick one and what you just described, all that psychology that you bring to bear to make you happy with what you’ve chosen, will be brought to bear and you’ll be pretty happy with it, and that those decisions because it six of one half dozen of the other they feel like hard ones but in reality they aren’t, because if it’s so much an on balance decision, you can go either way and you end up feeling pretty good about it.
RITHOLTZ: So there is a concept discussed in I believe it was “How We Know What Isn’t So” that I have to bring up because it just cracks me up so much. We are all familiar with the Kubler-Ross five stages of grief that has been dogma for years. Your research more or less finds that it’s pretty meaningless and there is no data that backs it up.
Am I overstating that or is that a fair assessment of that?
GILOVICH: I talk about that in the book in the same chapter that I talk about the hot hand as both of them are a reflection of the fact that we tend to see more patterns in the world than are actually there, we’ve got this incredible pattern detection machinery in our heads and it goes out and finds patterns, but no system is perfect and so it overshoot sometimes, and so we see faces and clouds and a man on the moon and canals on Mars that aren’t there and the hot hand is you are seeing more streakiness than is really there is another manifestation of that.
Psychologists are very fond of stage theories that we go through the systematic stages to take us from the starting point to the endpoint. Kubler-Ross’ is just one of them and it I’m not saying it’s random that is to say people willy-nilly go through all sorts of stages at different times, maybe there is some order there, but certainly there’s less than –people are complicated and they are acting all sorts of different ways and there is a lot of research on people’s reaction to grief, not so much about reactions to their own death although there is research on that too.
And people are all over the map, some people, the most common pattern of course, is you are devastated initially and then you get over it and — but many people never get over it and the world treats them badly like what’s wrong with you I heard it was supposed to take about a year, and you seem to have you seem to still be troubled by this, we’re adding an extra burden on to those people. Some people aren’t troubled right from the beginning and that can seem perverse, wait you just lost a child, what’s wrong with you? You didn’t feel that way, well that happens, and the problem with a firm belief in stage theories is that they take on this normative stance, this is what you should do.
In fact there are certain practitioners, sounds like I’m making this up but I wish I were — but there’s a practitioners manual for nurses that refers to people who don’t go through Kubler Ross’s five stages in the order specified as pathological diers (ph), and just think how insidious that is you gotten the worst news you could possibly get that your life here is you don’t have much time left on earth, you’ve got a deal with that.
And now in addition to that you have to deal with the fact that the people presumably there to help you think that you aren’t doing it right, it is just adding a horrible insult to an already terrible injury.
RITHOLTZ: And you link in one of the presentations, you link to the video of Homer Simpson going through the five stages, which is absolutely hilarious, I will add the link to this, I have to ask the related question what sort of pushback did you get from the establishments in this area when you basically said, hey the data doesn’t really support the classic Kubler-Ross five stages as much as we think it does.
GILOVICH: Compared to the amount of pushback I got on the hot hand, hardly any at all.
RITHOLTZ: Really? That is amazing, well basketball is serious and dying, hey you know we can’t really pay much attention to that. So let me ask you the question about the basketball hot hand issue. You mentioned there’s some new evidence that perhaps moderates a little bit. I know when you first came out with it, everybody from Red Auerbach to whoever weighed in on it what was some of the crazier pushback you got on this and how accurate you think of the original assessment is?
GILOVICH: Well I wouldn’t say any of the pushback is crazy, it was very firm and I understand that and again, precisely because it’s such a compelling phenomenon when you’re out there in the heat of the game and you have made several shots in a row and then you hear about these psychologist statisticians doing some analysis it’s easy to just that can’t be and just dismiss it, and they’re very dismissive — that know what they know, they are a bunch of psychologists.
Well psychologist play basketball too and you know maybe wouldn’t have the hot hand as much as a more skilled player, but we do have it then so it wasn’t crazy but it was pretty dismissive and again, with respect to our initial hypothesis, are people overestimating any streakiness that might be there?
The answer to that is very clear and in fact, we are running additional studies right now where we have people shoot for us and they identify just tell us when you’re hot and then afterwards we say you know you said you’re hot, some number of times you didn’t say that some number of times, what percentage of the shots do you think you made after you said you’re hot versus the times when you didn’t say that.
And the overestimation is staggering and — we know what percentage of shots they made when they said they were hot and they are wildly overestimating that, they are modestly underestimating how well they did when they said they weren’t hot. So again that departure between belief and reality.
RITHOLTZ: So let me not look for confirming data on the thesis that there was a lot of pushback and ask did anybody at either the professional or college level get back to you and say I want to adapt the data of the non hot hand –here’s how we think it could affect our player rotation or our game strategy, did you ever hear anybody who said as hard as this might be to believe we think you’re accurate, and here’s how it’s going to change our coaching or playing strategy?
GILOVICH: You know, I have talked to a lot of coaches who will say you one thing I have taken from that is that it reinforces really what my job is — which is to get my team the best shots and I used to factor in how hot someone is now I’m going to factor that in less, it’s really getting the ball in the hands of my best players on the best spots of the floor.
And so it’s reinforcing an alternative belief that they already have more than trying to get them to extinguish this other belief.
RITHOLTZ: So there’s a ton of other biases I wanted to go over, the spotlight affect, there’s just a run of stuff but I have to get to my favorite questions, these are the standard questions we ask all of our guests.
GILOVICH: Okay.
RITHOLTZ: Tell us the most important thing that people don’t know about your background?
GILOVICH: I’m the first person in my family to go to college that could sound like oh that’s a bad thing, I feel I’ve been studying gratitude a lot and I think part of it stems from having grown up in an amazing part of the world at an amazing time, that is Silicon Valley before it was Silicon Valley, it was just a great place, it was a pretty egalitarian world, those of us whose parents didn’t go to college mingled with those who did and you never felt like you are part of a lower caste as a result of that and obviously, the weather there was sensational, you got the beaches very close, Yosemite Valley very close, it was just an incredible place to have grown up.
RITHOLTZ: Tell us about some of your early mentors.
GILOVICH: I had the great pleasure of going to Stanford University, the number one psychology department then and now for a long time since had that ranking and I had a great time, it was the height of the cognitive revolution in psychology, there was a lot of very exciting things happening which is why I chose to go there and then there were the surprising things, Amos Tversky and Daniel Kahnemann were visiting there my very first year and started talking about the stuff I hadn’t heard of, it just seemed so compelling, it was sort of the dawn of the revolution in judgment and decision-making and it was just a very heady time and they were generous with their time.
My advisors Mark Lepper and Lee Ross, two incredibly insightful psychologists were very helpful so it was just — it felt like being in Wittgenstein’s Vienna, it was just a great place, at a great time with terrific people and terrifically giving people.
RITHOLTZ: So let me diverge from my normal questions and ask you two things about this. First, you write that you were originally planning on going to law school until you happen to see Tversky and Kahnemann at school, did you really completely shift your career plans based on —
GILOVICH: No, not quite, those two components are true but they are melded together that is to say, I went to college again I was first person in my family go to college and I didn’t know what I wanted to do, but I kind of like to argue with people and I thought that would be a good field, the law — and but there’s no prelaw, you take anything as a prelaw person and so I took a bunch of stuff and some of them psychology courses, liked them took another, liked that, took another and then suddenly it dawned on, hey, I seem to like this psychology stuff, can I make a career out of this and took a year off after undergraduate to sort of do I want to take that plunge and go to graduate school?
And the answer was yes. And I’m really glad that the answer was yes.
RITHOLTZ: So one of the themes that comes up in all these conversations with people who have achieved either personal or financial success is surprisingly the role of lock and randomness in their careers and I can’t count how many people have said you know but for this one thing happening my entire professional career, personal life, whatever, could have easily gone the different direction, you referenced in and again I think it was the “Why Smart People Make Big Money Mistakes”, the experience of seeing Tversky and Kahnemann at Stanford, am I reading too much into that, was that a big deal or was that just and this is really interesting I want to stay with the with psychology, I may be reading too much into it.
GILOVICH: No, you are not, I mean it is, well, I will tell an embarrassing story about myself which is I go to Stanford, it’s chock-full of these famous people, Walter Mischel, the marshmallow test, Gordon Bauer a giant in the cognitive revolution, the people I plan to study with Mark Lepper, Lee Ross, and Lee Ross ran a seminar on an introduction to the faculty, each week, he would bring in two other members of the faculty, we’d read their papers and find out what’s going on there among the faculty, a great way to start a program.
And in the first organizational meeting Lee says okay that’s what we are going to do but the first week, we got these visitors here, Amos Tversky and Daniel Kahnemann and so we are going to start with them. And internally I say to myself why these guys? I want to hear from the famous people, because my undergraduate education was such I hadn’t heard of them and I’m now embarrassed by that — but at least and they had us read the now epic 1974 paper in “Science” on heuristics and biases and so it’s an embarrassing story that I would say, gee, when are we going to hear from the famous people but one thing I can say in my defense at least one thing that makes me feel better is at least I recognized when we read that paper, hey man this is really great stuff and that changed what I plan to do in graduate school.
RITHOLTZ: That is fascinating. Tells about some of your favorite books.
GILOVICH: Man, there are so many great books.
RITHOLTZ: Give us three.
GILOVICH: Well, I’ll give you a category for one — anything that Ian McEwan writes is just brilliant and you know it’s fiction, but it’s fiction that touches on — and it’s fiction the touches on so many different areas of life in so many different themes that some of it having to do their related to judgment and decision-making in game theory that begin in the opening scene to his novel “Enduring Love”, it’s a brilliant fictional depiction of game theory, all you need to know about game theory happens in that first very riveting scene.
So anything by you Ian McEwan, another moving out of fiction to all and his kind of recent one, “Nutshell”, it’s a little of bizarrely fascinating take on the Hamlet tale is brilliant. Moving out of fiction to nonfiction, “Guns Germs and Steel” just sort the scope of it and – you know he asks so many questions that would never occur to me at least to ask and then bring some interesting analysis to bear on them some of them convincing, some of it less so, but the ambitiousness of it and the questions after, just terrific.
And you know we started with Kahnemann and Tversky and so it feels right to say “Thinking, Fast and Slow”, is chock-full of wisdom and just a brilliant explication of all the research in this area with just Danny Kahnemann’s gift for putting things just right.
RITHOLTZ: I love that book, it was tremendous. You work with a lot of students and a lot of millennials, what sort of advice would you give someone who was interested in psychology as a career?
GILOVICH: A bit of a complicated answer to that question, that is to say people are often taught, oh just follow your passion so on and I chafe at that a little bit because I know a lot of kids — it makes a lot of kids feel bad, because they think I don’t have a passion and the problem is finding it — and it’s okay to not have a passion, it’s okay to be a person who does a variety of different jobs, and you can be a good person and live a good life as just be a taxpayer, be someone is a good neighbor and so on, you don’t have to have a great passion and be a giant success.
So I want to put that out there because I firmly believe that because the advice I’m going to give it could sound like oh, you are recommending that and I’m not which is just do stuff, do what’s engaging to you, take, you know, if you are a student, don’t worry so much about getting your undergraduate business majors, so you can go right away into a job because if you do that, and it’s a job you like, they are probably going to want you to get your MBA anyway, you are going to relearn that stuff, you never know what you’re going to draw upon in your life, so take the kinds of courses, do the kinds of things that you’re really engaged in, push yourself a little bit. That’s what I would say.
You know the world changes so quickly you can anticipate what the skills of the marketplace are going to be with that much accuracy, so just keep building your intellectual capital and don’t worry so much about the outcome.
RITHOLTZ: And our final question what is it that you know about psychology today that you wish you knew 30 plus years ago when you’re first starting out?
GILOVICH: Yes, great question and a simple answer to it — I do this a lot in psychology but I kept it sort of walled off there and didn’t appreciate its breath, which is an idea often attributed to Kurt Lewin, which is when we’re trying to change behavior, other people’s or our own, we often try to do it by increasing motivation, psych people up, hire motivational speakers to get the sales force charged up and so on and there are times in which that is helpful, when motivation’s the problem, getting more motivation is great, but oftentimes that’s not the problem, people are perfectly well motivated and they just can’t figure out how to translate their strong motivations into effective action.
And Lewin’s idea, a very simple one is when that’s the case don’t try to push people more figure out what’s preventing them and take away those blockages. And behavioral economists have been using that a lot to exemplified best in the Richard Thaler and Cass Sunstein’s book “Nudge”, figure out what’s preventing this and rearrange the environment a little bit that makes the behavior easier, you want more of this, make it a little bit easier and I think — if I knew that sooner, I would be more effective in you know consulting on political campaigns, or helping people in their personal lives as well.
RITHOLTZ: That is absolutely fascinating. We have been speaking with Professor Tom Gilovich of Cornell University. If you enjoyed this conversation, be sure to look up an inch or down an inch on Apple iTunes or wherever you finer our podcasts are sold and you can see any of the other 180 or so such conversations that we’ve had.
I would be remiss if I did not thank the crack staff who helps put this podcast together each week, Taylor Riggs is our Booker, Michael Batnick is my head of research, and Madena Parwana is our audio engineer/producer.
We love your comments feedback and suggestions, write to us at MIBPodcast@Bloomberg.net, I’m Barry Ritholtz, you’re listening to Masters in Business on Bloomberg Radio.
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