1 00:00:15,564 --> 00:00:29,564 Speaker 1: Pushkin. Welcome back to Risky Business, a show about making 2 00:00:29,604 --> 00:00:32,164 Speaker 1: better decisions. I'm Maria Kanakova. 3 00:00:31,924 --> 00:00:35,124 Speaker 2: And I'm Nate Silver. Earlier this week, you've heard us 4 00:00:35,164 --> 00:00:38,524 Speaker 2: talk about hopefully you're listening every episode, Yes, right, listeners. 5 00:00:38,644 --> 00:00:40,644 Speaker 1: If not, what are you doing with your life? 6 00:00:41,164 --> 00:00:42,724 Speaker 2: What are you doing with you You heard us talk 7 00:00:42,724 --> 00:00:45,444 Speaker 2: about Las Vegas and the kind of literal casino economy. 8 00:00:45,444 --> 00:00:48,524 Speaker 2: We want to be a little bit more figurative about 9 00:00:48,564 --> 00:00:53,444 Speaker 2: that today, the casinofication of the American economy of frankly, 10 00:00:53,524 --> 00:00:55,124 Speaker 2: everyday life in lots of ways. 11 00:00:55,404 --> 00:00:59,284 Speaker 1: Yeah. So there was an op ed in The New 12 00:00:59,364 --> 00:01:04,004 Speaker 1: York Times on October twenty sixth from Kyla Scanlon that 13 00:01:04,404 --> 00:01:08,924 Speaker 1: talked about kind of this casino economy and what does 14 00:01:08,964 --> 00:01:12,964 Speaker 1: she mean by that? We have gamification of almost I 15 00:01:13,044 --> 00:01:15,924 Speaker 1: mean gamification has been something we've talked about before, but 16 00:01:16,404 --> 00:01:23,004 Speaker 1: casinoification specifically is that we are fueling speculation, we're fueling 17 00:01:23,324 --> 00:01:26,684 Speaker 1: risk taking, and we're kind of placing bets on a 18 00:01:26,724 --> 00:01:29,644 Speaker 1: lot of things, and you know, we're betting that this 19 00:01:29,804 --> 00:01:32,364 Speaker 1: all works out well for the US. Except instead of 20 00:01:32,404 --> 00:01:35,164 Speaker 1: gambling with your own money, you're gambling with the United States, 21 00:01:35,244 --> 00:01:38,164 Speaker 1: with US currency, with the way that the US is 22 00:01:38,204 --> 00:01:42,004 Speaker 1: perceived abroad with you know, how our economy is going 23 00:01:42,044 --> 00:01:46,804 Speaker 1: to do, and we're you know, you're seeing the government 24 00:01:46,844 --> 00:01:50,084 Speaker 1: placing these big bets and we don't actually know, Nate, 25 00:01:50,124 --> 00:01:52,484 Speaker 1: whether they're smart gamblers or not, right, We don't know 26 00:01:52,924 --> 00:01:57,084 Speaker 1: what went into that, whether they are people who are 27 00:01:57,124 --> 00:01:59,364 Speaker 1: like advantage players where like, oh, you know, there are 28 00:01:59,764 --> 00:02:02,964 Speaker 1: some edges here that we can exploit, or whether they're 29 00:02:03,004 --> 00:02:05,484 Speaker 1: just djens who are like I like to take risk 30 00:02:05,524 --> 00:02:07,364 Speaker 1: and I hope it works out. I'm betting it all 31 00:02:07,404 --> 00:02:12,124 Speaker 1: on black Come on, baby, US go service. I was. 32 00:02:12,444 --> 00:02:16,364 Speaker 2: I was checking my invidias dot and my Bitcoin and 33 00:02:16,964 --> 00:02:19,604 Speaker 2: the DraftKings bets I have for the midday night game. 34 00:02:19,804 --> 00:02:23,004 Speaker 2: And yeah, yeah, that's at a little distracted by by 35 00:02:23,044 --> 00:02:25,124 Speaker 2: all these you know, on the poly market price. You 36 00:02:25,204 --> 00:02:28,524 Speaker 2: can't see a bdega without seeing a count sheep or 37 00:02:28,564 --> 00:02:32,004 Speaker 2: poly market billboard in the New York City area anymore. So, 38 00:02:32,124 --> 00:02:34,524 Speaker 2: this is all around us. I enjoy some of it, 39 00:02:34,564 --> 00:02:36,564 Speaker 2: in profit from some of it, but like, I can 40 00:02:36,604 --> 00:02:42,204 Speaker 2: imagine how it becomes overwhelming to a more normy American. 41 00:02:42,604 --> 00:02:45,004 Speaker 1: Oh, absolutely, And I think that there are two different 42 00:02:45,004 --> 00:02:48,644 Speaker 1: spheres here, right, there's the like rise of prediction markets, 43 00:02:48,644 --> 00:02:51,404 Speaker 1: the fact that Trump himself is getting into the prediction 44 00:02:51,524 --> 00:02:54,004 Speaker 1: market business, you know, crypto, and the fact that Trump 45 00:02:54,084 --> 00:02:57,604 Speaker 1: himself got into crypto, like the actual gamifications. But then 46 00:02:57,724 --> 00:03:00,804 Speaker 1: there are also things like we're going to you know, 47 00:03:00,884 --> 00:03:04,484 Speaker 1: have the government invest in like invest in Nvidia and 48 00:03:04,564 --> 00:03:08,004 Speaker 1: do all these different things. Try to play a game 49 00:03:08,044 --> 00:03:10,804 Speaker 1: of chicken with tariffs to see like who's going to 50 00:03:10,804 --> 00:03:13,324 Speaker 1: blink first? Right, who's going to swerve first? Are we 51 00:03:13,404 --> 00:03:15,564 Speaker 1: going to end up in a trade war? Are we 52 00:03:15,644 --> 00:03:19,044 Speaker 1: going to end up with better concessions for the United States. 53 00:03:19,124 --> 00:03:22,924 Speaker 1: We're seeing it at every single level of society, and 54 00:03:23,004 --> 00:03:25,884 Speaker 1: I think that higher level is people are focused on 55 00:03:25,924 --> 00:03:28,244 Speaker 1: the lower level. They're like, oh, you know, you know 56 00:03:28,364 --> 00:03:31,564 Speaker 1: Calshian prediction markets, and they're getting into like sports betting 57 00:03:31,644 --> 00:03:34,644 Speaker 1: and all this stuff. This is terrible, but maybe they 58 00:03:34,644 --> 00:03:37,564 Speaker 1: should actually be looking more at that higher level, which 59 00:03:37,604 --> 00:03:41,404 Speaker 1: is saying, well, okay, but we're also you know, pouring 60 00:03:41,564 --> 00:03:47,364 Speaker 1: us government money into meme coins, and we're also trying 61 00:03:47,404 --> 00:03:51,724 Speaker 1: to see like can we levy one hundred percent tariffs 62 00:03:51,884 --> 00:03:54,844 Speaker 1: on some countries and have them still want to do 63 00:03:54,964 --> 00:03:59,164 Speaker 1: business with us? Like what can I get away with basically, 64 00:03:59,564 --> 00:04:02,444 Speaker 1: and so that that might be even though it's harder 65 00:04:02,484 --> 00:04:05,324 Speaker 1: to pinpoint and it's harder to make a nice headline 66 00:04:05,364 --> 00:04:08,484 Speaker 1: about that, those might be some of the more worrisome 67 00:04:08,844 --> 00:04:09,404 Speaker 1: elements of. 68 00:04:10,364 --> 00:04:12,124 Speaker 2: Yeah, and look, in some ways, I'd like to see 69 00:04:12,164 --> 00:04:15,684 Speaker 2: the American government be a little bit more market driven 70 00:04:15,764 --> 00:04:17,524 Speaker 2: in some things. I mean, the government isn't paying a 71 00:04:17,564 --> 00:04:19,924 Speaker 2: lot of people in market rate salaries. That's a big problem. 72 00:04:19,964 --> 00:04:23,804 Speaker 2: And like, you know, there were debates years ago about 73 00:04:23,804 --> 00:04:28,084 Speaker 2: like should Americans be allowed to invest their social Security savings. 74 00:04:28,724 --> 00:04:31,364 Speaker 2: I'm not sure that they shouldn't. It's probably not a 75 00:04:31,364 --> 00:04:34,484 Speaker 2: popular position among progressives, right, But like, but you also 76 00:04:34,484 --> 00:04:38,884 Speaker 2: face things like if all these risks become correlated, right 77 00:04:39,004 --> 00:04:43,044 Speaker 2: then in the United States, felt then social scurityholders would 78 00:04:43,084 --> 00:04:45,804 Speaker 2: bear more geopolitical risk. I mean, look, I mean there 79 00:04:45,804 --> 00:04:49,644 Speaker 2: are a few dimensions, right. One is like exhaustion of 80 00:04:49,844 --> 00:04:54,244 Speaker 2: like you feel like every decision that you make you're 81 00:04:54,284 --> 00:04:58,564 Speaker 2: battling some algorithm or there's some way to optimize. And 82 00:04:58,604 --> 00:05:01,844 Speaker 2: I guess if you're have high agency and our experience 83 00:05:01,964 --> 00:05:04,404 Speaker 2: and have money and don't have to worry about as 84 00:05:04,484 --> 00:05:07,604 Speaker 2: much of this stuff, right, then maybe it leads to opportunities, 85 00:05:07,604 --> 00:05:10,004 Speaker 2: but where it feels like everything is game of everything 86 00:05:10,164 --> 00:05:15,484 Speaker 2: is complicated, right, I mean we haven't had Natlsha Shull 87 00:05:15,604 --> 00:05:19,284 Speaker 2: on the show. She's an anthropologist who wrote Addiction by Design, 88 00:05:19,284 --> 00:05:20,684 Speaker 2: which is about similar. 89 00:05:20,764 --> 00:05:21,644 Speaker 1: Really interesting book. 90 00:05:22,324 --> 00:05:25,564 Speaker 2: Yeah, between literally slot machine design and like social media 91 00:05:25,564 --> 00:05:34,284 Speaker 2: apps continue with scroll the complete absorption that you're in constantly, right, yeah, can. 92 00:05:34,164 --> 00:05:36,044 Speaker 1: I want to take a step back with that because 93 00:05:36,044 --> 00:05:39,924 Speaker 1: this is some of the most fundamental work in twentieth 94 00:05:39,924 --> 00:05:42,844 Speaker 1: century psychology, and I just want to give people a 95 00:05:42,884 --> 00:05:45,364 Speaker 1: little bit of a refresher if it's been like a 96 00:05:45,364 --> 00:05:49,164 Speaker 1: little while since they're psych one oh one. Everyone kind 97 00:05:49,204 --> 00:05:53,244 Speaker 1: of has heard about Pavlov's dogs, Right. If I bring 98 00:05:53,844 --> 00:05:57,084 Speaker 1: food to a dog and it gets used to kind 99 00:05:57,084 --> 00:05:59,244 Speaker 1: of the food, it salivates because it knows it's about 100 00:05:59,284 --> 00:06:02,124 Speaker 1: to eat, right, And if you ring a bell every 101 00:06:02,164 --> 00:06:05,844 Speaker 1: time before you bring the food, now the dog learns 102 00:06:05,844 --> 00:06:08,884 Speaker 1: to associate the bell with the food. Now we take 103 00:06:08,924 --> 00:06:11,724 Speaker 1: away the food food, and the dog hears a bell 104 00:06:12,084 --> 00:06:17,164 Speaker 1: and the dog salavates. That's called associated learning. Now, what 105 00:06:17,244 --> 00:06:20,564 Speaker 1: Pavla found was then you can extinguish it. Right if 106 00:06:20,644 --> 00:06:23,604 Speaker 1: after a while you keep bringing the bell and no 107 00:06:23,684 --> 00:06:28,244 Speaker 1: food comes, Eventually the response will be extinguished and the 108 00:06:28,284 --> 00:06:32,044 Speaker 1: dog will stop salivating. Now fast forward to be of Skinner, 109 00:06:32,524 --> 00:06:35,764 Speaker 1: who kind of took behaviorism to the next level and 110 00:06:36,324 --> 00:06:42,164 Speaker 1: realized that basically the single best way to get rats, 111 00:06:42,564 --> 00:06:46,404 Speaker 1: guinea pigs, humans to do what you want them to 112 00:06:46,444 --> 00:06:49,964 Speaker 1: do is not just through reinforcement learning, which is, you know, 113 00:06:50,004 --> 00:06:52,764 Speaker 1: you reinforce a behavior that you want with something positive, 114 00:06:53,084 --> 00:06:59,564 Speaker 1: but through a cycle of intermittent reinforcement. So regular reinforcement learning, 115 00:06:59,884 --> 00:07:01,764 Speaker 1: you press a button and you get a pellet, or 116 00:07:01,804 --> 00:07:03,524 Speaker 1: you get a coin that you can use for a 117 00:07:03,564 --> 00:07:06,204 Speaker 1: slot machine or whatever. It is, like, I don't know 118 00:07:06,204 --> 00:07:08,284 Speaker 1: if we're talking about a human or a guinea pig, 119 00:07:08,644 --> 00:07:11,084 Speaker 1: but if sometimes when you press the button you get 120 00:07:11,084 --> 00:07:14,924 Speaker 1: a pellet, sometimes you don't, Sometimes you get two pellets, 121 00:07:14,964 --> 00:07:17,044 Speaker 1: you know, sometimes you don't. Then all of a sudden, 122 00:07:17,204 --> 00:07:19,044 Speaker 1: there is nothing you can do to get that rat 123 00:07:19,084 --> 00:07:21,604 Speaker 1: to step away from pressing the button. If that pellet 124 00:07:21,644 --> 00:07:24,884 Speaker 1: is compelling enough, it will just keep pressing because that 125 00:07:25,044 --> 00:07:31,124 Speaker 1: intermittent cycle of reinforcement is something that is just inherently appealing. Right, 126 00:07:31,204 --> 00:07:34,644 Speaker 1: It's that gamble, Right, Oh, maybe I won't get anything, 127 00:07:34,684 --> 00:07:36,284 Speaker 1: but maybe I'll get a lot, and maybe I'll get 128 00:07:36,284 --> 00:07:38,604 Speaker 1: more than I ever got before. Maybe I'll get like 129 00:07:38,684 --> 00:07:43,924 Speaker 1: an extra sweet, amazing treat. And that is how animals 130 00:07:43,964 --> 00:07:47,604 Speaker 1: including humans learn the best, but also how they start 131 00:07:47,804 --> 00:07:51,044 Speaker 1: engaging in compulsive behaviors. And all of a sudden, you 132 00:07:51,204 --> 00:07:54,604 Speaker 1: see you know, rats, guinea pigs, humans who are just 133 00:07:54,684 --> 00:07:57,724 Speaker 1: pressing that pressing that button over and over. So now 134 00:07:57,844 --> 00:08:02,284 Speaker 1: we're seeing how powerful that psychology is and what happens 135 00:08:02,324 --> 00:08:04,324 Speaker 1: when you take the guardrails off of it, and when 136 00:08:04,324 --> 00:08:07,564 Speaker 1: you start seeing the US government engaging in that sort 137 00:08:07,564 --> 00:08:08,084 Speaker 1: of behavior. 138 00:08:08,324 --> 00:08:10,684 Speaker 2: I mean, look at slot machines, like, there are a 139 00:08:10,684 --> 00:08:12,404 Speaker 2: couple of things you can learn from st machines in 140 00:08:12,484 --> 00:08:14,924 Speaker 2: terms of reinforcing behavior that can be compulsive. 141 00:08:15,124 --> 00:08:15,324 Speaker 1: Right. 142 00:08:16,684 --> 00:08:22,004 Speaker 2: Number one is this combination of small and big rewards. Right, 143 00:08:22,044 --> 00:08:24,764 Speaker 2: if you play a slot, then you spend for five 144 00:08:24,844 --> 00:08:27,924 Speaker 2: dollars and no, there's a churn, ch changing, and you 145 00:08:27,964 --> 00:08:30,364 Speaker 2: win three dollars back, right, or ten dollars back or 146 00:08:30,404 --> 00:08:33,444 Speaker 2: two dollars back or something right, And then you have 147 00:08:33,524 --> 00:08:36,884 Speaker 2: the occasional big jackpot where it attendant comes and pays 148 00:08:36,924 --> 00:08:39,004 Speaker 2: you and it creates a big scene. 149 00:08:39,084 --> 00:08:39,324 Speaker 1: Right. 150 00:08:40,244 --> 00:08:43,884 Speaker 2: That combination seems to be pretty powerful, right, But The 151 00:08:43,924 --> 00:08:47,644 Speaker 2: other thing these machines do. They have complicated game modes 152 00:08:47,684 --> 00:08:49,404 Speaker 2: where you feel like you almost win, like, oh, if 153 00:08:49,404 --> 00:08:54,004 Speaker 2: you get five reels all turned in the same direction right, 154 00:08:54,044 --> 00:08:57,324 Speaker 2: then you trigger some bonus mode in a buffalo stampede 155 00:08:57,404 --> 00:08:59,084 Speaker 2: or a wolf howl or whatever else. They all have 156 00:08:59,124 --> 00:09:01,604 Speaker 2: like animal themes or the prices right or weel afford it. 157 00:09:01,724 --> 00:09:03,884 Speaker 1: I see the buffalo one everywhere, so I'm assuming that's 158 00:09:03,924 --> 00:09:06,524 Speaker 1: a high margin one for casinos. I have no idea. 159 00:09:07,004 --> 00:09:09,804 Speaker 1: I know that different machines have different you know, different 160 00:09:09,964 --> 00:09:13,084 Speaker 1: value for casinos, but the buffalo ones everywhere please continue. 161 00:09:13,484 --> 00:09:16,244 Speaker 2: But yeah, you feel like, oh, man, if I just 162 00:09:16,284 --> 00:09:18,284 Speaker 2: got this one more real to turn, I would trigger 163 00:09:18,324 --> 00:09:21,164 Speaker 2: stampede mode and make lots of money. And so they 164 00:09:21,204 --> 00:09:24,204 Speaker 2: show you. You're kind of like they dramatize your near 165 00:09:24,444 --> 00:09:26,844 Speaker 2: misses if you're like, oh, I came so close last 166 00:09:26,884 --> 00:09:30,524 Speaker 2: time that like, how could I give up on this case? Yeah, 167 00:09:30,604 --> 00:09:32,204 Speaker 2: all these when you and by the way, you don't 168 00:09:32,244 --> 00:09:37,604 Speaker 2: know the payouts for slot machines are not posted anywhere 169 00:09:38,244 --> 00:09:40,524 Speaker 2: easily viewable by anybody. Right. 170 00:09:40,844 --> 00:09:43,684 Speaker 1: By the way, a really good illustration of this without 171 00:09:43,684 --> 00:09:46,924 Speaker 1: getting into kind of the innards of a slot machine 172 00:09:47,084 --> 00:09:50,844 Speaker 1: is if you've ever kind of seen a game show, 173 00:09:50,884 --> 00:09:53,564 Speaker 1: which I'm sure everyone has, where they spin the wheel, right, 174 00:09:53,644 --> 00:09:57,204 Speaker 1: and there's always like the huge prize is always in 175 00:09:57,244 --> 00:10:02,564 Speaker 1: between like tiny prizes. Yeah, exactly, and you see kind 176 00:10:02,604 --> 00:10:05,524 Speaker 1: of that drama of like the needle almost going to 177 00:10:05,564 --> 00:10:08,364 Speaker 1: the huge prize and then not, and it almost never doesn't. 178 00:10:08,404 --> 00:10:10,444 Speaker 1: I don't know, Like I assume that it's not rigged, 179 00:10:10,684 --> 00:10:13,244 Speaker 1: but if you ever do that at a carnival, don't, 180 00:10:13,484 --> 00:10:15,044 Speaker 1: by the way, because then it is rigged. 181 00:10:15,204 --> 00:10:18,004 Speaker 2: Yeah. I don't know what the regulations are on like 182 00:10:19,404 --> 00:10:22,604 Speaker 2: onslop mission, but like in general, the reporting different. A 183 00:10:22,644 --> 00:10:26,604 Speaker 2: book suggest that like the computer within milliseconds microseconds determines 184 00:10:26,644 --> 00:10:28,524 Speaker 2: what the payout is, it's according to a fix schedule, 185 00:10:28,764 --> 00:10:30,684 Speaker 2: and if you don't abide by that schedule, then you 186 00:10:30,924 --> 00:10:33,804 Speaker 2: get in a great deal of trouble with the gaming board, right. 187 00:10:34,244 --> 00:10:36,604 Speaker 2: I don't think they're regularly as much how they represent 188 00:10:36,724 --> 00:10:39,444 Speaker 2: that outcome to you and so like, so you are 189 00:10:39,444 --> 00:10:41,884 Speaker 2: manipulating people not only with the payout schedule, which has 190 00:10:41,924 --> 00:10:45,724 Speaker 2: been optimized by MT engineers to figure out what gets 191 00:10:45,764 --> 00:10:50,084 Speaker 2: people to be most compulsive, right, but also the way 192 00:10:50,324 --> 00:10:54,644 Speaker 2: in which a given result is shown can also contribute 193 00:10:54,644 --> 00:10:58,964 Speaker 2: to anxiety. Excitement, yes, the feeling of just having missed 194 00:10:58,964 --> 00:11:01,364 Speaker 2: out on an amazing, life changing jackpot. 195 00:11:01,564 --> 00:11:05,404 Speaker 1: The visual is so important. The visual is so important. 196 00:11:05,404 --> 00:11:07,324 Speaker 1: That's why I gave the example of the game show 197 00:11:07,404 --> 00:11:09,724 Speaker 1: right where you spin the wheel, because when you see 198 00:11:09,764 --> 00:11:12,204 Speaker 1: like cherry, cherry cherry, and then like it's almost a 199 00:11:12,324 --> 00:11:14,804 Speaker 1: cherry and that it just like misses by a half, right, 200 00:11:15,244 --> 00:11:17,284 Speaker 1: and you're like, oh damn. 201 00:11:17,244 --> 00:11:19,044 Speaker 2: Now there's something that's moving from the analog to the 202 00:11:19,284 --> 00:11:22,084 Speaker 2: so like a lot of uh, most of the tennis 203 00:11:22,124 --> 00:11:27,364 Speaker 2: tournaments now now use electronic eye judges, line judges. Right, 204 00:11:28,404 --> 00:11:31,604 Speaker 2: So go to the US that's good, right, Well, it 205 00:11:31,644 --> 00:11:33,364 Speaker 2: depends on how accurate. But you'll go to the US 206 00:11:33,404 --> 00:11:36,844 Speaker 2: Open and Hawkeye I think it's called, will show one 207 00:11:36,844 --> 00:11:39,004 Speaker 2: of the ball is in or out right, and then 208 00:11:39,564 --> 00:11:43,204 Speaker 2: they'll show the replay and the replay is computer generated. 209 00:11:43,204 --> 00:11:45,164 Speaker 2: I'm like, that's not a fucking replay, right, it's not. 210 00:11:45,204 --> 00:11:47,564 Speaker 2: Actually you can't verify when the computer was right or wrong, 211 00:11:47,564 --> 00:11:50,204 Speaker 2: and it's very close called by showing the computer's input. 212 00:11:50,324 --> 00:11:52,764 Speaker 1: No, that's that's actually it's really annoying. Yep. 213 00:11:52,924 --> 00:11:54,724 Speaker 2: But like feeling like you never kind of were able 214 00:11:54,764 --> 00:11:57,724 Speaker 2: to like touch grass and get something real. I think 215 00:11:57,804 --> 00:11:59,724 Speaker 2: is a feeling that's a little bit a little bit 216 00:11:59,964 --> 00:12:04,004 Speaker 2: frustrated too, for sure, something that's and I guess people 217 00:12:04,004 --> 00:12:06,884 Speaker 2: are verifiable are used to that. I mean us kind 218 00:12:06,884 --> 00:12:09,564 Speaker 2: of gets into the seging we taped earlier and we 219 00:12:09,564 --> 00:12:12,604 Speaker 2: had earlier this week about like the feeling of constantly 220 00:12:12,684 --> 00:12:17,324 Speaker 2: being manipulated by the algorithm. You know, there has been, 221 00:12:17,364 --> 00:12:23,164 Speaker 2: for example, a big increase in like fast food revenues 222 00:12:23,284 --> 00:12:26,764 Speaker 2: per order per customer in recent years. And part of 223 00:12:26,764 --> 00:12:28,764 Speaker 2: this is that, like part of this is at like 224 00:12:30,324 --> 00:12:33,924 Speaker 2: now people are ordering on kiosks most of the time, 225 00:12:33,964 --> 00:12:39,404 Speaker 2: even at physical locations. So number one, number one, you 226 00:12:39,564 --> 00:12:43,684 Speaker 2: were just stopping costs, right, Number two people you have 227 00:12:43,724 --> 00:12:45,804 Speaker 2: all types of up cells. Oh here's an extra sex 228 00:12:45,844 --> 00:12:47,964 Speaker 2: you can add for just forty nine cents. Right, I'm 229 00:12:47,964 --> 00:12:50,524 Speaker 2: sure the margin is very high or whatever, and like 230 00:12:50,604 --> 00:12:53,084 Speaker 2: and like just that constant fatigue from being you know, 231 00:12:53,164 --> 00:12:55,964 Speaker 2: sometimes my little my partners, you're like, which you got 232 00:12:55,964 --> 00:12:58,444 Speaker 2: like a simple restaurant, Yeah, tonight one of these it's 233 00:12:58,484 --> 00:13:01,084 Speaker 2: like not corporate own. It's like, well it's actually this 234 00:13:01,124 --> 00:13:02,404 Speaker 2: other place was like, yeah, I just don't want all 235 00:13:02,404 --> 00:13:05,644 Speaker 2: the fucking option. I want to b plus plain of 236 00:13:05,684 --> 00:13:09,004 Speaker 2: spaghetti without any fuss and without feeling like everything is 237 00:13:09,044 --> 00:13:10,604 Speaker 2: being golden dying for me. 238 00:13:10,804 --> 00:13:14,924 Speaker 1: You know, yeah, no, absolutely, And it's psychologically speaking, you know, 239 00:13:15,124 --> 00:13:17,684 Speaker 1: once again we've were talking about kind of thin lines 240 00:13:17,724 --> 00:13:21,404 Speaker 1: between a frustrating experience and one that actually works in 241 00:13:21,524 --> 00:13:25,004 Speaker 1: terms of nudging the consumer to the type of behavior 242 00:13:25,004 --> 00:13:27,124 Speaker 1: that you want. So, yeah, when you're at a Kidoska 243 00:13:27,124 --> 00:13:28,764 Speaker 1: and you're like, oh, like, do you are you sure 244 00:13:28,804 --> 00:13:31,044 Speaker 1: you don't want to, like, for fifty cents upgrade this 245 00:13:31,124 --> 00:13:34,364 Speaker 1: to like an extra large right, which would normally cost 246 00:13:34,444 --> 00:13:36,764 Speaker 1: this much more, but you get kind of you get 247 00:13:36,764 --> 00:13:40,804 Speaker 1: an extra deal, and it's so interesting. So I flew 248 00:13:40,844 --> 00:13:45,724 Speaker 1: to Vegas this past weekend and took a lift from 249 00:13:45,764 --> 00:13:50,244 Speaker 1: the airport and got my little statement, you know, the 250 00:13:50,284 --> 00:13:54,284 Speaker 1: little email that they send you and something I think 251 00:13:54,324 --> 00:13:57,164 Speaker 1: my lift was, I don't remember, twenty five dollars something 252 00:13:57,204 --> 00:13:59,804 Speaker 1: like that. And then I see the statement and it's 253 00:13:59,884 --> 00:14:04,844 Speaker 1: like forty eight dollars plus a thirty percent discount for 254 00:14:05,004 --> 00:14:07,924 Speaker 1: this and this and this, so that and so twenty 255 00:14:08,004 --> 00:14:10,444 Speaker 1: five dollars. So they present the exact same amount in 256 00:14:10,564 --> 00:14:13,044 Speaker 1: very different ways and all of a sudden, you're like, oh, 257 00:14:13,124 --> 00:14:13,804 Speaker 1: I got a deal. 258 00:14:13,924 --> 00:14:14,844 Speaker 2: It was supposed to. 259 00:14:14,764 --> 00:14:17,284 Speaker 1: Be forty eight dollars, but really I got it for 260 00:14:17,364 --> 00:14:20,004 Speaker 1: twenty five dollars. It wasn't supposed to be forty eight dollars. 261 00:14:20,044 --> 00:14:21,804 Speaker 1: They just make that shit up so that you don't 262 00:14:21,844 --> 00:14:25,284 Speaker 1: feel like you're being taken advantage of. And but that 263 00:14:25,404 --> 00:14:28,364 Speaker 1: works with fast food, that works with everything door dash. 264 00:14:28,444 --> 00:14:31,164 Speaker 1: So when you know, I order from delivery apps and 265 00:14:31,204 --> 00:14:32,844 Speaker 1: you get that sort of thing all the way all 266 00:14:32,884 --> 00:14:34,844 Speaker 1: the time where you're like, oh, get a credit, like 267 00:14:35,684 --> 00:14:37,244 Speaker 1: do you want to double dash? Do you want to 268 00:14:37,284 --> 00:14:40,644 Speaker 1: add this from another store while you know with no 269 00:14:40,724 --> 00:14:43,284 Speaker 1: delivery fee? Right? Do you want some ice cream? You 270 00:14:43,404 --> 00:14:46,484 Speaker 1: ordered Italian and this will pair well from Gelato, no 271 00:14:46,644 --> 00:14:49,364 Speaker 1: extra delivery fee. Your dasher can stop buy and get Gelato. 272 00:14:49,404 --> 00:14:51,564 Speaker 1: I wasn't planning to get Gelatto, but uh, you know, 273 00:14:51,604 --> 00:14:53,364 Speaker 1: it does seem like a great deal because I don't 274 00:14:53,404 --> 00:14:55,444 Speaker 1: have to pay two delivery fees. Maybe I will get 275 00:14:55,484 --> 00:14:58,924 Speaker 1: Gelatto after all. Right, that kind of so the way 276 00:14:58,964 --> 00:15:01,164 Speaker 1: that you present it can actually turn it from something 277 00:15:01,204 --> 00:15:05,684 Speaker 1: that's either annoying or really cool. And there are when 278 00:15:05,684 --> 00:15:08,404 Speaker 1: it comes to consumers, When it comes to advertising. They 279 00:15:08,404 --> 00:15:10,844 Speaker 1: are very strict regulartions on this, but that's not true 280 00:15:11,004 --> 00:15:14,524 Speaker 1: across every industry, and that's certainly not true when it 281 00:15:14,524 --> 00:15:16,684 Speaker 1: comes to kind of the US government because it's the 282 00:15:16,684 --> 00:15:19,804 Speaker 1: one that's supposed to be regulating. So there are few 283 00:15:19,804 --> 00:15:22,484 Speaker 1: things other than the Constitution that regulate what it can 284 00:15:22,524 --> 00:15:26,604 Speaker 1: do when it comes to kind of gamifying different experiences. 285 00:15:26,164 --> 00:15:27,644 Speaker 2: And now and then you can like actually get an 286 00:15:27,684 --> 00:15:31,604 Speaker 2: offer that's like actually pretty good. These typically happen in 287 00:15:31,684 --> 00:15:34,044 Speaker 2: times and places when the environment can be a little 288 00:15:34,044 --> 00:15:37,884 Speaker 2: bit recessionary, right, Like, so, Maria, I am going to 289 00:15:37,924 --> 00:15:40,244 Speaker 2: be out with you playing the napt in Vegas this week. 290 00:15:40,364 --> 00:15:43,444 Speaker 2: There's also various poker tournaments in December. It's a good 291 00:15:43,484 --> 00:15:47,564 Speaker 2: month for poker. The World Chairs of Poker is offering 292 00:15:48,444 --> 00:15:52,644 Speaker 2: a twenty five thousand dollars bonus if you were eligible 293 00:15:52,764 --> 00:15:54,924 Speaker 2: because you cash the main event or had enough cashes 294 00:15:54,924 --> 00:15:56,804 Speaker 2: in the summer World Chairs of Poker and the s 295 00:15:56,804 --> 00:15:59,364 Speaker 2: Bahamas event they have right if you catch their main event. 296 00:15:59,364 --> 00:16:02,044 Speaker 1: There By the way, the main event in the Bahamas 297 00:16:02,084 --> 00:16:04,324 Speaker 1: is twenty five thousand dollars, so it's. 298 00:16:04,164 --> 00:16:08,004 Speaker 2: A serious event. However, if you cash, you basically get 299 00:16:08,044 --> 00:16:12,204 Speaker 2: your buy in back for free and like fifteen percent, 300 00:16:12,244 --> 00:16:15,084 Speaker 2: twenty five thousand maybe premium, you know, a fe little 301 00:16:15,124 --> 00:16:17,644 Speaker 2: bit for a skilled premium if I'm being generous with myself, right, 302 00:16:17,844 --> 00:16:20,244 Speaker 2: Like that's actually worth real money, you know. But the 303 00:16:20,284 --> 00:16:26,204 Speaker 2: reason why is because like they're trying to get people 304 00:16:26,244 --> 00:16:28,524 Speaker 2: there and out compete these other tournaments. They actually are, 305 00:16:28,644 --> 00:16:33,124 Speaker 2: they're actually really spending real marketing budget. And you, if 306 00:16:33,164 --> 00:16:34,964 Speaker 2: you want to participate in that, have the optimist consumer 307 00:16:35,004 --> 00:16:39,124 Speaker 2: to benefit from that. Right, That's usually not true. Usually 308 00:16:39,124 --> 00:16:43,004 Speaker 2: you're being squeezed on the margin and every nickel that 309 00:16:43,044 --> 00:16:45,164 Speaker 2: you think you save is coming out of your pocket 310 00:16:45,484 --> 00:16:47,244 Speaker 2: at some other point in time. I mean you see 311 00:16:47,244 --> 00:16:50,164 Speaker 2: it in politics too, or like for years Democrats in 312 00:16:50,204 --> 00:16:52,764 Speaker 2: particular would send all these emails Nancy Pelosi says it's 313 00:16:52,844 --> 00:16:56,684 Speaker 2: urgent and us contribute today this fucking fund, right and 314 00:16:56,764 --> 00:16:59,484 Speaker 2: like and people get fed up with that, and like, 315 00:16:59,524 --> 00:17:03,004 Speaker 2: we have this problem in myopia. When of you design algorithms, 316 00:17:03,004 --> 00:17:07,364 Speaker 2: we're like, an algorithm can often tell you what, given 317 00:17:07,484 --> 00:17:11,804 Speaker 2: current conditions in the short term, will maximize revenues. 318 00:17:11,964 --> 00:17:12,164 Speaker 1: Right. 319 00:17:12,724 --> 00:17:18,004 Speaker 2: They do not adjust enough for consumer fatigue, They do 320 00:17:18,084 --> 00:17:21,484 Speaker 2: not just enough for like the long term balance sheet 321 00:17:22,084 --> 00:17:24,884 Speaker 2: of the consumer. Right, they do not just enough. For 322 00:17:25,004 --> 00:17:28,084 Speaker 2: like with political messages, a message that was once fresh 323 00:17:28,124 --> 00:17:32,844 Speaker 2: can become stale. Right, being the fourth or fifth iteration 324 00:17:32,964 --> 00:17:35,084 Speaker 2: of Obama is not the same as the first version 325 00:17:35,564 --> 00:17:41,004 Speaker 2: of Obama or whatever else. Right, And yeah, I think 326 00:17:41,044 --> 00:17:43,044 Speaker 2: I'm talking to guys just who like makes films, Like, yeah, 327 00:17:43,044 --> 00:17:45,204 Speaker 2: I don't use this algorithm shit for like making picking 328 00:17:45,244 --> 00:17:47,604 Speaker 2: films at all, Right, we just make films that are 329 00:17:47,644 --> 00:17:52,644 Speaker 2: derivative and and and a lot of algorithms they become 330 00:17:52,724 --> 00:17:57,044 Speaker 2: inferior out of sample. And like also, you know, with 331 00:17:57,044 --> 00:18:02,444 Speaker 2: with AI, I mean I assume within could happen now, right, 332 00:18:02,804 --> 00:18:05,164 Speaker 2: I assume that with some of the services, you'll say, okay, 333 00:18:05,204 --> 00:18:07,684 Speaker 2: here's you know, here's an ad from the gap or whatever, right, 334 00:18:07,844 --> 00:18:11,044 Speaker 2: And here's how you would look in this nice new 335 00:18:11,284 --> 00:18:12,404 Speaker 2: T shirt from the Gap. 336 00:18:12,484 --> 00:18:12,604 Speaker 1: Right. 337 00:18:12,644 --> 00:18:15,324 Speaker 2: Maybe it's probably a little flattering to your dimensions and 338 00:18:15,364 --> 00:18:18,204 Speaker 2: whatever else. But like people are gonna begin to feel 339 00:18:18,244 --> 00:18:22,124 Speaker 2: correctly very manipulated, and that makes lead to like, you know, 340 00:18:22,324 --> 00:18:26,044 Speaker 2: I mean, even with Trump, right, I would argue there 341 00:18:26,204 --> 00:18:31,164 Speaker 2: is some degree a boy who cried wolf syndrome with Trump, 342 00:18:31,164 --> 00:18:33,204 Speaker 2: where like everything is seen as an outrage and therefore 343 00:18:33,204 --> 00:18:35,324 Speaker 2: the things that actually are outrages, which there are many 344 00:18:35,364 --> 00:18:39,964 Speaker 2: outrages in my opinion as the American citizen, Right, people 345 00:18:40,044 --> 00:18:42,684 Speaker 2: are just so fucking sick of the message and they 346 00:18:43,044 --> 00:18:45,244 Speaker 2: and they tune out and they lose their serotonin response 347 00:18:45,284 --> 00:18:48,364 Speaker 2: and whatever else, right, And yeah, it's pretty pretty bad. 348 00:18:52,044 --> 00:18:53,444 Speaker 1: And we'll be back right after this. 349 00:19:08,324 --> 00:19:11,284 Speaker 2: Do you have any tips for help people navigate the stuff, Maria. 350 00:19:11,884 --> 00:19:19,284 Speaker 1: Oh Man, Yeah, well, you know, try to uh oh, 351 00:19:19,644 --> 00:19:21,204 Speaker 1: try to get out of it a little bit. Like 352 00:19:21,284 --> 00:19:24,524 Speaker 1: people need to like just take a step back and 353 00:19:24,844 --> 00:19:27,164 Speaker 1: try to reclaim We haven't talked about this at all 354 00:19:27,204 --> 00:19:31,164 Speaker 1: on the episode, but like reclaim some semblance of their attention, right, 355 00:19:31,164 --> 00:19:33,924 Speaker 1: like get off social media, stop like reacting to things 356 00:19:34,244 --> 00:19:36,524 Speaker 1: all the time, and try to like just try to 357 00:19:37,484 --> 00:19:40,084 Speaker 1: I know, I know, and just try to take a 358 00:19:40,124 --> 00:19:42,964 Speaker 1: step back and get some perspective. What I try to 359 00:19:43,004 --> 00:19:46,044 Speaker 1: help people through their decision making and they're about to 360 00:19:46,084 --> 00:19:48,204 Speaker 1: make kind of a big purchase, a big decision or whatever. 361 00:19:48,244 --> 00:19:50,724 Speaker 1: It is something I often do, as I say, okay, 362 00:19:50,884 --> 00:19:55,004 Speaker 1: before you look at anything, before you buy anything, before 363 00:19:55,084 --> 00:19:57,524 Speaker 1: you kind of do anything like that, why don't you 364 00:19:57,564 --> 00:20:00,724 Speaker 1: take a pen and paper and write down, like what 365 00:20:00,764 --> 00:20:03,204 Speaker 1: are the most important things to you, right, Like what 366 00:20:03,244 --> 00:20:07,244 Speaker 1: are you looking for? What is in this particular decision, 367 00:20:07,324 --> 00:20:09,604 Speaker 1: Like what are you optimizing for? What do you care 368 00:20:09,604 --> 00:20:11,844 Speaker 1: a little bit less about how much are you willing 369 00:20:11,924 --> 00:20:15,404 Speaker 1: to kind of spend and give yourself kind of answer 370 00:20:15,484 --> 00:20:18,364 Speaker 1: those questions and give yourself firm limits, because then you 371 00:20:18,804 --> 00:20:23,164 Speaker 1: think a little bit less susceptible to those nudges that 372 00:20:23,244 --> 00:20:26,964 Speaker 1: happen to behavior in the moment, because in the moment, 373 00:20:27,004 --> 00:20:30,364 Speaker 1: it's really hard to make good decisions, especially if you're tired. Right, 374 00:20:30,404 --> 00:20:33,764 Speaker 1: this is like poker, This is like trying to play 375 00:20:33,804 --> 00:20:36,724 Speaker 1: well at the poker table. Think through all of these 376 00:20:36,724 --> 00:20:39,564 Speaker 1: scenarios ahead of time, because in the moment when it 377 00:20:39,604 --> 00:20:41,764 Speaker 1: comes up, if you haven't thought through, you're going to 378 00:20:41,804 --> 00:20:44,364 Speaker 1: tilt and you're going to make a poor decision because 379 00:20:44,524 --> 00:20:46,964 Speaker 1: you don't actually know how to react in the moment. 380 00:20:47,324 --> 00:20:49,444 Speaker 1: And so I think taking that time and taking those 381 00:20:49,444 --> 00:20:53,324 Speaker 1: steps back can be really really important for just solid 382 00:20:53,364 --> 00:20:56,964 Speaker 1: decision making, especially as we acknowledge that our attention is 383 00:20:57,004 --> 00:20:59,124 Speaker 1: limited and we are getting tired. 384 00:21:00,044 --> 00:21:04,724 Speaker 2: The other thing I'd add is that like people make 385 00:21:04,764 --> 00:21:08,844 Speaker 2: this mistake of spending the most time on the most 386 00:21:08,884 --> 00:21:12,084 Speaker 2: marginalis instead of the most place takes decisions right where 387 00:21:12,084 --> 00:21:17,724 Speaker 2: it's like, okay, I can optimize this or that by 388 00:21:17,764 --> 00:21:20,684 Speaker 2: picking the six different versions of uber or lyft take 389 00:21:20,724 --> 00:21:22,324 Speaker 2: me to the airport, right, and one's a little bit 390 00:21:22,324 --> 00:21:24,284 Speaker 2: more expensive, and once they're a little sooner, it's like, 391 00:21:24,804 --> 00:21:28,164 Speaker 2: if it's like reasonably close, just pick one and don't 392 00:21:28,164 --> 00:21:30,364 Speaker 2: worry about it, because the mental effort of worrying about 393 00:21:30,364 --> 00:21:33,604 Speaker 2: it outweighs the marginal gain that's within some margin of 394 00:21:33,684 --> 00:21:38,724 Speaker 2: uncertainty anyway, right, equilibrium, Often you're indifferent between different options. 395 00:21:38,724 --> 00:21:40,964 Speaker 2: I mean, likewise, like if there is something that like, 396 00:21:41,204 --> 00:21:46,964 Speaker 2: you know, don't buy a bundle of things that aren't 397 00:21:47,004 --> 00:21:51,124 Speaker 2: interesting to you personally, right. You know, if you're paying 398 00:21:51,204 --> 00:21:53,564 Speaker 2: some extra fee when you check in a hotel for 399 00:21:53,604 --> 00:21:56,884 Speaker 2: a bigger room and you're planning on having a crazy 400 00:21:56,924 --> 00:21:59,844 Speaker 2: twenty four hours in Vegas and being in your room 401 00:21:59,884 --> 00:22:02,564 Speaker 2: just to sleep, but probably is not a good piece 402 00:22:02,564 --> 00:22:04,124 Speaker 2: of advice for you. Whereas for me, if I'm spending 403 00:22:04,164 --> 00:22:06,124 Speaker 2: hours working, which I often do, then it might be 404 00:22:06,164 --> 00:22:08,964 Speaker 2: worth the upgrade. It's kind of common sense stuff, and like, 405 00:22:09,964 --> 00:22:12,604 Speaker 2: you know, even things like airline frequent flyer moules like 406 00:22:12,684 --> 00:22:15,684 Speaker 2: the average person probably have a lot of airline optimizers 407 00:22:15,684 --> 00:22:18,484 Speaker 2: in the risky business audience, right, But like there's a 408 00:22:18,604 --> 00:22:21,084 Speaker 2: cost to all this. Some people think it's fun to 409 00:22:21,124 --> 00:22:24,924 Speaker 2: maximize this kind of thing, but like you just have 410 00:22:25,004 --> 00:22:26,444 Speaker 2: to simplify some decisions. 411 00:22:27,124 --> 00:22:31,044 Speaker 1: So I think that it's it's really interesting, but everything 412 00:22:31,044 --> 00:22:34,804 Speaker 1: we've been talking about on a consumer level actually plays 413 00:22:34,804 --> 00:22:37,444 Speaker 1: out on the government level as well, and on how 414 00:22:37,484 --> 00:22:40,364 Speaker 1: Trump is trying to kind of play right and take 415 00:22:40,404 --> 00:22:43,164 Speaker 1: these take these risks and play these games of chicken. 416 00:22:43,404 --> 00:22:47,764 Speaker 1: So that actually goes both ways. You know, as as 417 00:22:47,804 --> 00:22:50,804 Speaker 1: citizens of the United States, we do have this reaction 418 00:22:50,844 --> 00:22:53,244 Speaker 1: where he's trying to flood the zone and like get 419 00:22:53,244 --> 00:22:57,244 Speaker 1: everyone to just not respond anymore because it is you know, 420 00:22:57,324 --> 00:22:59,684 Speaker 1: it's just one thing after another after another. You get tired. 421 00:23:00,044 --> 00:23:03,764 Speaker 1: But he's using very similar tactics, not on think, not 422 00:23:03,884 --> 00:23:06,604 Speaker 1: on purpose, but when he's trying to kind of place 423 00:23:06,684 --> 00:23:09,764 Speaker 1: all of these bets with the US economy on different 424 00:23:09,764 --> 00:23:13,804 Speaker 1: activities like levying tariffs. And I mean this is the 425 00:23:13,884 --> 00:23:18,804 Speaker 1: Taco effect, right, the fact that Trump will always chicken 426 00:23:18,884 --> 00:23:20,324 Speaker 1: out at the end where he says, oh, I'm going 427 00:23:20,364 --> 00:23:22,204 Speaker 1: to put one hundred percent tariffs on you I'm going 428 00:23:22,284 --> 00:23:24,564 Speaker 1: to do this. I'm going to do that. And as 429 00:23:24,564 --> 00:23:27,164 Speaker 1: a negotiating tactic, when you're trying to kind of take 430 00:23:27,204 --> 00:23:29,964 Speaker 1: this calculated what you think is a calculated risk, because 431 00:23:30,004 --> 00:23:31,804 Speaker 1: you're like, I'm never actually going to have to follow 432 00:23:31,844 --> 00:23:34,404 Speaker 1: through on this, because I know that this person will 433 00:23:34,444 --> 00:23:37,404 Speaker 1: back off first, right, I know that she will want 434 00:23:37,444 --> 00:23:39,284 Speaker 1: to negotiate with me because they don't want to get 435 00:23:39,284 --> 00:23:42,884 Speaker 1: into a trade war. I know that Canada will kind 436 00:23:42,884 --> 00:23:44,804 Speaker 1: of do what I want because they don't want to 437 00:23:44,804 --> 00:23:47,684 Speaker 1: get into a trade war, et cetera, et cetera, et cetera. 438 00:23:48,084 --> 00:23:50,484 Speaker 1: It works until it doesn't, right, because what happens with 439 00:23:50,564 --> 00:23:53,644 Speaker 1: other countries is exactly what's happening with a consumer, where 440 00:23:53,684 --> 00:23:57,324 Speaker 1: like you've actually flooded the zone, right, and where you've 441 00:23:57,364 --> 00:24:00,444 Speaker 1: done this so many times, and you've been erratic so 442 00:24:00,484 --> 00:24:02,964 Speaker 1: many times, and you've made these threats so many times 443 00:24:03,004 --> 00:24:05,244 Speaker 1: and then pulled them back that at some point, as 444 00:24:05,244 --> 00:24:06,684 Speaker 1: a leader of a foreign country, might be you know what, 445 00:24:06,764 --> 00:24:09,164 Speaker 1: screw this, Like I'm tired, right, We're not going to 446 00:24:09,204 --> 00:24:12,324 Speaker 1: keep repeating this cycle, and I'm actually gonna, you know, 447 00:24:12,364 --> 00:24:14,444 Speaker 1: stand my ground. So it has a very different effect, 448 00:24:14,604 --> 00:24:18,484 Speaker 1: but it's the exact same sort of reinforcement mechanism that 449 00:24:19,004 --> 00:24:21,524 Speaker 1: we're seeing on a domestic level, but you now see 450 00:24:21,524 --> 00:24:26,764 Speaker 1: it abroad with very large economic circumstances where you kind 451 00:24:26,764 --> 00:24:30,004 Speaker 1: of you keep taking those risks, and then eventually the 452 00:24:30,084 --> 00:24:33,484 Speaker 1: risk calculus changes and you have to realize that what 453 00:24:33,564 --> 00:24:36,124 Speaker 1: was a calculated risk is now just a pure gamble, 454 00:24:36,404 --> 00:24:39,724 Speaker 1: probably a negative ev gamble. And unless you're a very 455 00:24:39,804 --> 00:24:43,364 Speaker 1: very smart player, you often, especially when you're in it 456 00:24:43,404 --> 00:24:47,444 Speaker 1: and you're so enamored and kind of in love with 457 00:24:47,524 --> 00:24:51,164 Speaker 1: your own success, right, and you're almost like you're riding 458 00:24:51,244 --> 00:24:54,164 Speaker 1: high because you think you've been successful at doing all 459 00:24:54,204 --> 00:24:56,564 Speaker 1: of these things, can be very difficult to have an 460 00:24:56,644 --> 00:25:00,444 Speaker 1: objective reality check and realize, hey, the risk has actually changed, 461 00:25:00,444 --> 00:25:02,764 Speaker 1: the risk proposition has changed, I should change the way 462 00:25:02,764 --> 00:25:03,284 Speaker 1: I'm betting. 463 00:25:03,964 --> 00:25:07,604 Speaker 2: And look, when people feel like they've been manipulated for 464 00:25:07,604 --> 00:25:09,724 Speaker 2: a long period of time, right, and and then the 465 00:25:09,844 --> 00:25:13,924 Speaker 2: exit situation, they tend to I mean, you can probably 466 00:25:14,484 --> 00:25:17,804 Speaker 2: tell me if I'm if there's some studies here like 467 00:25:18,084 --> 00:25:20,684 Speaker 2: they rebel against that a lot, right, So like I 468 00:25:20,724 --> 00:25:23,644 Speaker 2: am so fucking through with this. I mean again, I 469 00:25:23,844 --> 00:25:25,604 Speaker 2: you know, I cover politics a lot, so I can't 470 00:25:25,604 --> 00:25:27,164 Speaker 2: help but make like politics analogies. 471 00:25:27,204 --> 00:25:29,404 Speaker 1: But like, well we're talking about politics now, so it's 472 00:25:29,404 --> 00:25:30,164 Speaker 1: again you know, but. 473 00:25:30,084 --> 00:25:32,044 Speaker 2: Like I feel like people might have felt with the 474 00:25:33,564 --> 00:25:35,724 Speaker 2: you know a lot of people getting mad. I mean, 475 00:25:35,764 --> 00:25:38,604 Speaker 2: the Democratic Party has it's rebounding slightly now, right, but 476 00:25:38,684 --> 00:25:44,884 Speaker 2: has like lower voter registration numbers and lower party identification numbers, 477 00:25:44,884 --> 00:25:46,804 Speaker 2: and it has in a couple of decades, right, it's 478 00:25:46,964 --> 00:25:48,564 Speaker 2: toward toward a low point. 479 00:25:50,084 --> 00:25:50,284 Speaker 1: You know. 480 00:25:50,364 --> 00:25:52,524 Speaker 2: Part of it is like this is party, it's kind 481 00:25:52,524 --> 00:25:55,364 Speaker 2: of supposed to be upstanding, irresponsible, but like they kind 482 00:25:55,404 --> 00:25:56,644 Speaker 2: of fuck up some shit and they kind of like 483 00:25:56,644 --> 00:25:58,564 Speaker 2: Tony that they fuck up some shit, and like, you know, 484 00:25:58,644 --> 00:26:01,044 Speaker 2: if you like thought it was a bad idea, like 485 00:26:01,084 --> 00:26:04,324 Speaker 2: I did to run Joe Biden again and felt like 486 00:26:04,364 --> 00:26:06,644 Speaker 2: you were gas lit by the Democratic Party, which I 487 00:26:06,724 --> 00:26:11,724 Speaker 2: also did, Right, then it's very easy to say, fuck 488 00:26:11,844 --> 00:26:17,444 Speaker 2: these guys. They're wrong about immigration, they're wrong about trans rights, 489 00:26:17,444 --> 00:26:20,484 Speaker 2: they're wrong about economics, they're wrong about everything, because like 490 00:26:20,924 --> 00:26:25,164 Speaker 2: there's that reputational halo effect and then the rebellion effect. 491 00:26:25,164 --> 00:26:28,524 Speaker 2: They're probably better terms for this, right, But like, you know, 492 00:26:29,044 --> 00:26:33,044 Speaker 2: any relationship, and in a personal relationship, a business between 493 00:26:33,084 --> 00:26:37,604 Speaker 2: two countries, Like resentment building up, you can tolerate a 494 00:26:37,604 --> 00:26:39,724 Speaker 2: lot of it in the near tournament almost always comes 495 00:26:39,724 --> 00:26:44,204 Speaker 2: out in the long term, and often the the rebellion 496 00:26:44,364 --> 00:26:48,204 Speaker 2: afterward is worse than the Martians you would have lost 497 00:26:48,244 --> 00:26:49,964 Speaker 2: in a piecemeal base in the short run. 498 00:26:50,404 --> 00:26:53,564 Speaker 1: Yeah, and if you go even more globally, if we're 499 00:26:53,564 --> 00:26:56,684 Speaker 1: talking about kind of some of these risks for US 500 00:26:56,724 --> 00:27:00,844 Speaker 1: foreign policy, for alliances, for what the future of the 501 00:27:00,884 --> 00:27:06,084 Speaker 1: world order looks like down behind, like, that's actually not 502 00:27:06,324 --> 00:27:09,564 Speaker 1: very encouraging, right, because it's one of these things where 503 00:27:09,764 --> 00:27:13,124 Speaker 1: you casino ify, you know, the US government, and it 504 00:27:13,164 --> 00:27:15,044 Speaker 1: takes a long time for these effects to build up. 505 00:27:15,084 --> 00:27:17,644 Speaker 1: But then the resentment is such that the backlash is 506 00:27:18,004 --> 00:27:20,964 Speaker 1: much harder and undoes any economic games you might have 507 00:27:21,004 --> 00:27:23,844 Speaker 1: picked up in the immediate term, and your long term 508 00:27:23,844 --> 00:27:27,604 Speaker 1: economic future suddenly looks a lot bleaker. Now if we 509 00:27:28,004 --> 00:27:30,604 Speaker 1: if we think that that's what's happening in the US 510 00:27:30,684 --> 00:27:33,244 Speaker 1: government right now, we're not seeing some of these effects yet, 511 00:27:33,284 --> 00:27:36,524 Speaker 1: but we will, and they're probably the backlash is going 512 00:27:36,564 --> 00:27:39,404 Speaker 1: to be a lot worse than people imagine it's going 513 00:27:39,404 --> 00:27:39,604 Speaker 1: to be. 514 00:27:41,644 --> 00:27:43,924 Speaker 2: Yeah, you know, the other suspicions people have is that 515 00:27:43,964 --> 00:27:46,804 Speaker 2: when you're gamifying things, that things are kind of subtly rigged, 516 00:27:46,804 --> 00:27:51,684 Speaker 2: and yeahs and vansage right, which they usually are, which 517 00:27:51,724 --> 00:27:53,804 Speaker 2: they often are usually are, Which is you know, all 518 00:27:53,804 --> 00:27:58,924 Speaker 2: these heuristics are basically correct, right that usually if there's 519 00:27:58,964 --> 00:28:02,244 Speaker 2: some complication then although some people might be able to 520 00:28:02,284 --> 00:28:05,684 Speaker 2: take advantage of that complication even just being you know, 521 00:28:05,764 --> 00:28:08,844 Speaker 2: price discrimination, being tiered into different regions. I mean it's 522 00:28:09,164 --> 00:28:11,644 Speaker 2: if you go to Europe, you notice there's less tiering 523 00:28:11,764 --> 00:28:15,124 Speaker 2: of different types of services. Right, you take business class 524 00:28:15,164 --> 00:28:18,124 Speaker 2: in Europe and all this difference there's the middle seat 525 00:28:18,204 --> 00:28:20,964 Speaker 2: is empty basically, and you board like slightly sooner. Right, 526 00:28:21,004 --> 00:28:24,604 Speaker 2: there's less tiering in general, there's more kind of nominal equality. 527 00:28:24,804 --> 00:28:28,164 Speaker 2: And whereas in the American economy there are so many 528 00:28:28,444 --> 00:28:32,364 Speaker 2: hyper dimensions. And you notice it in New York City especially, 529 00:28:32,644 --> 00:28:34,724 Speaker 2: Even people who are objectively really well off in New 530 00:28:34,804 --> 00:28:36,804 Speaker 2: York are like, why can't I have an even nicer apartment? 531 00:28:36,884 --> 00:28:39,324 Speaker 2: Or why can't a sushi place like cost four and 532 00:28:39,364 --> 00:28:42,724 Speaker 2: fifty dollars ahead or whatever? Right, Like, you notice it 533 00:28:43,124 --> 00:28:45,044 Speaker 2: a lot more. It probably works to make people like 534 00:28:45,124 --> 00:28:49,244 Speaker 2: extremely competitive, right, But it is a certain equilibrium that 535 00:28:50,524 --> 00:28:54,764 Speaker 2: creates cumulative fatigue and burnout and maybe maybe worse decision 536 00:28:54,764 --> 00:28:56,844 Speaker 2: making in the long run. I mean, we've both been 537 00:28:56,964 --> 00:29:00,324 Speaker 2: enough situations where like, you're playing poker terminal day, you 538 00:29:00,364 --> 00:29:02,364 Speaker 2: have a lot of other life decisions, and you're optimizing 539 00:29:02,404 --> 00:29:04,324 Speaker 2: some travel shit, and you're like, Oh, I'm just fucking 540 00:29:04,404 --> 00:29:06,364 Speaker 2: sick and tired of this, right, I just like to 541 00:29:06,364 --> 00:29:09,044 Speaker 2: sit down and have a nice, mildly over priced burger 542 00:29:09,444 --> 00:29:11,284 Speaker 2: and not have to make all these fucking decisions anymore. 543 00:29:11,684 --> 00:29:14,484 Speaker 1: Yep. And it's one thing if you're you and it's 544 00:29:14,524 --> 00:29:17,844 Speaker 1: a burger and it's poker decisions. It's another thing if 545 00:29:17,884 --> 00:29:21,524 Speaker 1: you're a government leader and you've just had this stuff 546 00:29:21,684 --> 00:29:23,764 Speaker 1: kind of lobbied at you over and over and over. 547 00:29:27,204 --> 00:29:32,084 Speaker 2: And we'll be right back after this break. 548 00:29:46,884 --> 00:29:48,764 Speaker 1: By the way, as we talk about kind of the 549 00:29:49,844 --> 00:29:54,044 Speaker 1: downstream effects, it's both on a personal resentment level, but 550 00:29:54,124 --> 00:30:00,164 Speaker 1: it's also where like behavioral incentives will sometimes take a 551 00:30:00,204 --> 00:30:05,044 Speaker 1: long time for the math to play out. So, for instance, 552 00:30:05,084 --> 00:30:08,724 Speaker 1: with tariffs, you have kind of this situation where people 553 00:30:08,764 --> 00:30:11,324 Speaker 1: are like, oh, well, you know, inflation isn't going up. 554 00:30:11,364 --> 00:30:14,124 Speaker 1: It's not that bad, And it's because companies have the 555 00:30:14,164 --> 00:30:17,644 Speaker 1: ability to shield consumers. For some there's some buffer, right, 556 00:30:17,884 --> 00:30:20,764 Speaker 1: there's a period of time before it actually like we'll 557 00:30:20,804 --> 00:30:24,124 Speaker 1: start hitting. And so it's incorrect to say, oh, there's 558 00:30:24,164 --> 00:30:27,764 Speaker 1: no effect, no negative effect, just because you can't see 559 00:30:27,764 --> 00:30:30,444 Speaker 1: it immediately. And so too, I would say it's incorrect 560 00:30:30,484 --> 00:30:34,564 Speaker 1: to say that there's no kind of international order negative 561 00:30:34,604 --> 00:30:37,924 Speaker 1: repercussions of some of this kind of gamifications just because 562 00:30:37,964 --> 00:30:40,444 Speaker 1: we can't see all of them yet, because those are 563 00:30:40,484 --> 00:30:43,244 Speaker 1: going to take a longer time to play out. And 564 00:30:43,524 --> 00:30:45,844 Speaker 1: you have these institutions in place that have been in 565 00:30:45,884 --> 00:30:50,244 Speaker 1: place for decades and they're designed to kind of be 566 00:30:50,324 --> 00:30:53,044 Speaker 1: resilient and to be able to withstand a lot of pressure. 567 00:30:53,084 --> 00:30:54,964 Speaker 1: But at some point, like if you keep if you 568 00:30:55,044 --> 00:30:57,804 Speaker 1: keep hammering on it, like those cracks are going to 569 00:30:57,844 --> 00:31:00,564 Speaker 1: start to appear, and we're going to see some of 570 00:31:00,564 --> 00:31:02,804 Speaker 1: those effects, not now, but you know, in five years 571 00:31:02,924 --> 00:31:06,604 Speaker 1: or whatnot. But the problem with gamification is that if 572 00:31:06,644 --> 00:31:08,644 Speaker 1: you're the gambler who's making the risk now and you're 573 00:31:08,644 --> 00:31:11,084 Speaker 1: getting it a reward, you don't particularly care if you're 574 00:31:11,124 --> 00:31:13,204 Speaker 1: going to bring the house down five years from now, 575 00:31:13,244 --> 00:31:15,284 Speaker 1: if you're not going to be there to get the backlash. 576 00:31:15,404 --> 00:31:19,724 Speaker 2: Gim Pooker. We have like long term equilibriums called game 577 00:31:19,724 --> 00:31:23,044 Speaker 2: theory optimal solutions or GTO, where like if everybody is 578 00:31:23,044 --> 00:31:27,644 Speaker 2: optimizing their strategy, what results And GTL strategies actually are 579 00:31:27,684 --> 00:31:30,884 Speaker 2: not supposed to be exploitive quote unquote, right, they're actually 580 00:31:30,924 --> 00:31:32,844 Speaker 2: kind of defensive. They're like, we assume that everybody else 581 00:31:32,924 --> 00:31:36,324 Speaker 2: is smart and playing optimally within the constraints of the 582 00:31:36,404 --> 00:31:38,884 Speaker 2: rule set, right, and so therefore here's where we wind up. 583 00:31:38,884 --> 00:31:42,164 Speaker 2: And it's kind of in some ways like a fair solution. Right, 584 00:31:42,204 --> 00:31:44,324 Speaker 2: you're bluffing but not too much. You can be greedy 585 00:31:44,364 --> 00:31:46,244 Speaker 2: but not too greedy, and if you debate from that, 586 00:31:46,244 --> 00:31:48,284 Speaker 2: then you can be exploited. Yeah, you know, I mean 587 00:31:48,324 --> 00:31:53,204 Speaker 2: how how customers feel when they're when they're disempowered in 588 00:31:53,284 --> 00:31:56,764 Speaker 2: our relationship by you know, I don't know, but like 589 00:31:56,804 --> 00:31:59,364 Speaker 2: all that algorithm, price discrimination, all that stuff is like, 590 00:32:00,164 --> 00:32:02,884 Speaker 2: you know, I think contributes to people feeling like they're 591 00:32:02,884 --> 00:32:06,804 Speaker 2: getting the short end of the deal, right, and that 592 00:32:06,924 --> 00:32:09,324 Speaker 2: you know, there's a big debate over inflation. People have 593 00:32:10,084 --> 00:32:13,044 Speaker 2: been spending down their paychecks more and more and more. 594 00:32:13,084 --> 00:32:15,284 Speaker 2: She look at nervous about the crimea actually decrease people 595 00:32:15,364 --> 00:32:17,324 Speaker 2: might save more if they're more nervous, right, but certainly 596 00:32:17,364 --> 00:32:19,644 Speaker 2: in the kind of the boomears after COVID, and there 597 00:32:19,684 --> 00:32:22,764 Speaker 2: are big debates about like how bad is inflation and 598 00:32:22,764 --> 00:32:24,924 Speaker 2: if you look at kind of like how much people 599 00:32:24,964 --> 00:32:28,724 Speaker 2: are spending per basket of goods, how the Bureau of 600 00:32:28,764 --> 00:32:32,524 Speaker 2: Labor cists define it, Inflation was already pretty bad, but 601 00:32:32,524 --> 00:32:34,964 Speaker 2: they're also spending more on shit they don't necessarily need 602 00:32:35,084 --> 00:32:38,124 Speaker 2: sir manipulated into purchasing it. And you remember that the 603 00:32:38,124 --> 00:32:40,444 Speaker 2: second time. I guess we're repeating ourselves, right. It's just 604 00:32:40,484 --> 00:32:43,204 Speaker 2: like you know, I, you know, I probably wouldn't endorse 605 00:32:43,884 --> 00:32:47,764 Speaker 2: everything in Kyla Scanlon's argument. I don't think she's guilty 606 00:32:47,844 --> 00:32:51,284 Speaker 2: of this. I think sometimes progressives can be really fucking 607 00:32:52,124 --> 00:32:58,604 Speaker 2: prudish about this stuff. But I directionally, I totally understand. 608 00:32:58,284 --> 00:33:00,524 Speaker 1: The complaint, so do I, so do I, And she 609 00:33:00,644 --> 00:33:04,044 Speaker 1: actually I want to find this original quote because I 610 00:33:04,044 --> 00:33:07,004 Speaker 1: don't remember what it originally says. But she reminds us 611 00:33:08,124 --> 00:33:11,044 Speaker 1: and she doesn't have the original quote either. She paraphrases 612 00:33:11,404 --> 00:33:14,044 Speaker 1: what John Maynard Keynes, who is kind of one of 613 00:33:14,084 --> 00:33:18,924 Speaker 1: the fathers of economic thought, you know, free market economics, 614 00:33:18,964 --> 00:33:22,764 Speaker 1: et cetera. Et cetera. That he warned that markets can 615 00:33:22,804 --> 00:33:26,244 Speaker 1: stay irrational longer than most people can stay solvent. And 616 00:33:26,284 --> 00:33:30,524 Speaker 1: I think that that's a really kind of valid concern 617 00:33:31,044 --> 00:33:34,524 Speaker 1: and one of the reasons why sometimes kind of the 618 00:33:34,564 --> 00:33:38,204 Speaker 1: gamblers thinking doesn't actually work in the sense that, like 619 00:33:38,564 --> 00:33:40,844 Speaker 1: things work until they don't, they go up until they don't, 620 00:33:40,964 --> 00:33:43,524 Speaker 1: and you have to avoid risk of ruin in the meantime, right, 621 00:33:43,564 --> 00:33:46,284 Speaker 1: you cannot go broke. That's why the Martin Gale strategy 622 00:33:46,284 --> 00:33:48,844 Speaker 1: doesn't work for people when they're gambling. And by the way, 623 00:33:48,884 --> 00:33:52,084 Speaker 1: that Martin Gale strategy, which we've talked about before, is 624 00:33:52,484 --> 00:33:55,084 Speaker 1: you know, if you place ten dollars on a bet 625 00:33:55,084 --> 00:33:57,244 Speaker 1: and you lose, the next time, you need to place 626 00:33:57,284 --> 00:33:59,764 Speaker 1: twenty so that you can you know, get back your losses. 627 00:33:59,804 --> 00:34:02,164 Speaker 1: So basically, if you double all the time, you just 628 00:34:02,204 --> 00:34:04,044 Speaker 1: have to lose one. You just have to win once 629 00:34:04,084 --> 00:34:06,484 Speaker 1: and you'll be fine. But what happens if you're you know, 630 00:34:06,564 --> 00:34:08,364 Speaker 1: suddenly in the millions and you don't have that money, 631 00:34:08,444 --> 00:34:11,124 Speaker 1: like you're fucked. You don't know how how long that's 632 00:34:11,124 --> 00:34:14,204 Speaker 1: going to go. So, yeah, markets can stay irrational longer 633 00:34:14,204 --> 00:34:16,124 Speaker 1: than most people can stay solvent. And I think that 634 00:34:16,124 --> 00:34:20,124 Speaker 1: that's something that should be worrisome to us as we 635 00:34:20,164 --> 00:34:22,404 Speaker 1: look at all of these behaviors, as we look at 636 00:34:22,444 --> 00:34:25,884 Speaker 1: all of this increased pushing edges, risk taking, and see 637 00:34:25,924 --> 00:34:28,204 Speaker 1: that it's coming on the part of you know, our 638 00:34:28,244 --> 00:34:30,764 Speaker 1: commander in chief of the government, of the policies that 639 00:34:31,604 --> 00:34:34,724 Speaker 1: are being undertaken, and the fact that you know, we 640 00:34:34,844 --> 00:34:39,324 Speaker 1: have things that are actually kind of tied into highly 641 00:34:39,364 --> 00:34:42,244 Speaker 1: speculative ventures and if you're betting on all of them 642 00:34:42,244 --> 00:34:44,804 Speaker 1: to do well, you better hope that those are all 643 00:34:44,844 --> 00:34:48,244 Speaker 1: plus e V bets and that the calculus hasn't shifted 644 00:34:48,244 --> 00:34:50,644 Speaker 1: on you, which because of the way that you know, 645 00:34:50,684 --> 00:34:53,884 Speaker 1: we've seen the reinforcements changing and the behavior is changing, 646 00:34:53,924 --> 00:34:56,644 Speaker 1: and how kind of a ratic it's been. I think 647 00:34:56,684 --> 00:35:01,164 Speaker 1: that both you and I have raised issues on why 648 00:35:01,564 --> 00:35:03,604 Speaker 1: some of these bets may no longer be plus V 649 00:35:03,724 --> 00:35:08,604 Speaker 1: and why that risk calculus may have changed. And after that, Nate, 650 00:35:08,644 --> 00:35:11,964 Speaker 1: whether it's resent like you've been talking about, and like rebellion, 651 00:35:12,044 --> 00:35:17,204 Speaker 1: whatever we choose to call it, that might be a 652 00:35:17,204 --> 00:35:25,204 Speaker 1: bigger backlash than you bargained for. Let us know what 653 00:35:25,244 --> 00:35:27,164 Speaker 1: you think of the show. Reach out to us at 654 00:35:27,284 --> 00:35:31,524 Speaker 1: Risky Business, at Pushkin dot FM. Risky Business is hosted 655 00:35:31,564 --> 00:35:33,444 Speaker 1: by me Maria Kanakova. 656 00:35:33,164 --> 00:35:35,924 Speaker 2: And by me Nate Silver. The show was a Cool 657 00:35:35,924 --> 00:35:39,924 Speaker 2: production of Pushing Industries and iHeartMedia. This episode was produced 658 00:35:39,924 --> 00:35:44,244 Speaker 2: by Isaac Carter. Our associate producer is Sonya gerwit Lydia, 659 00:35:44,364 --> 00:35:47,244 Speaker 2: Jean Kott and Daphne Chen are our editors, and our 660 00:35:47,284 --> 00:35:51,124 Speaker 2: executive producer is Jacob Goldstein. Mixing by Sarah Bruger. 661 00:35:51,644 --> 00:35:53,884 Speaker 1: If you like the show, please rate and review us 662 00:35:53,924 --> 00:35:56,564 Speaker 1: so other people can find us too, But once again, 663 00:35:56,724 --> 00:35:58,524 Speaker 1: only if you like us. We don't want those bad 664 00:35:58,564 --> 00:36:00,724 Speaker 1: reviews out there. Thanks for tuning in. 665 00:36:09,524 --> 00:36:09,684 Speaker 2: Ka