 Welcome to the Reason Interview. Well, thank you very much. Tonight's guest is Annie Duke, a former professional poker player, who holds a bracelet from the World Series of Poker that you got in 2004. She's the author of several books, including Thinking and Betts, which I interviewed her about for Reason a few years ago. And many of the insights that I gained both from reading that book and talking with you, they still come up when I'm making bad decisions. I know why I'm making the wrong decision, but Thinking and Betts and last year's book quit the power of knowing when to walk away. She holds a PhD in cognitive psychology from the University of Pennsylvania, earning her degree after taking a 30-year break from academia. We're going to talk about all that and more. Annie, thanks for talking to Reason. Thank you for having me. Let's start by discussing quit. You write at the start that while grit is a virtue, quitting is a vice. Can you explain that and summarize the book's message? Sure. So let me be clear. I don't think that quitting is a vice, but I think that people generally think that grit is the heroic act and people who quit lack courage. And we know this because there's lots of aphorisms. Winners never quit, quitters never win. At first, you don't succeed. Try, try again, so on and so forth. My parents, to inject my biography into these conversations, which I like to, are buried in Mount Olivet Cemetery, which is the same cemetery that Vince Lombardi is buried in. So I think about him a lot. And my favorite aphorism of his is show me a good loser, and I'll show you a loser, which is adjacent to this topic. It is. It's quite adjacent to this topic. Isn't everything winning is the only thing. Quitters never quit, et cetera. So quitting is a vice. Right. So the point that I'm making in the book is that grit and quit are really the same decision. If we think about what makes grit good, it's the ability to stick to things, even if they're hard, that are worthwhile. And what we forget is the worthwhile part. So we just think, oh, we should stick to hard things. And somehow that's a sign of character. But obviously, that's patently ridiculous. If you're climbing Mount Everest in a snowstorm, a blizzard comes in, you shouldn't continue to the summit. That would be silly. Although people do that all the time, right? They do because we have a bias toward grit. So what we want to remember is this worthwhile piece. So if something is no longer worthwhile, quitting is actually not a vice. It's just as much of a virtue as sticking to things is because they're the exact same decision. Any time that you have started something, you have a choice, should I continue it? That would be grit. Or should I quit it? That should be quitting. Has there ever been a time in modern history, I don't know, the past 500 years where people were like, yeah, you know what, quitting is a virtue. No. Yeah. No, we have a very, very strong bias toward thinking that grit is good. And it's a little bit of a, it's like a chicken and the egg issue in the sense that we can think like, is it this bias toward, is it sort of the cultural aspect of, like the Vince Lombardi's and so on and so forth that's making us then be very biased toward sticking to things? Or is it that we're naturally biased toward sticking things and then the aphorisms kind of follow? And we don't know, we can't really untangle that. But what we do know is that you can look at a whole host of cognitive biases, which are just errors that we make in our thinking that come from shortcuts that have kind of gone awry. And there's just a huge set of biases that all kind of result in a failure to stop things, to stick to things too long. And we'll get into some of those. At the start of the book, you invoke Muhammad Ali who's almost certainly the greatest boxer of all time and certainly he's famous for coming back multiple times to win the crown again and again. What's the lesson you want people to take from Muhammad Ali's grit? Yeah, so I mean, I think that Muhammad Ali is such a good example of this dichotomy, right? This sort of like battle between grit and quip because as many of you know, born Cassius Clay, beat Sonny Liston in order to gain the title, converted to become a Muslim, changed his name to Muhammad Ali. And then when the Vietnam War happened and he was supposed to be drafted, he became a conscientious objector. And as part of that, in his prime, in the prime of his career, he had his title stripped from him and was not allowed to box. He wasn't able to get a license. And by the time that he came back, which was about four years later, he then had to work his way up to a title fight which takes quite a long time. So he was already in his early 30s by the time he got his next title fight. And he did regain the title. And everybody was telling him, you're not gonna be able to do this. You're too old. This was very, very old for a boxer. And you're fighting George Foreman, who is humongous, much bigger than Muhammad Ali was and undefeated and basically never had a fight that went past three rounds because he would just walk into the ring, knock the people out. People would go down during the instructions. I mean, he was as overwhelming to Ali in Zaire as Liston had been to Ali when he won the title the first time. So this is a good example of where grit is good, right? Ali saw something probably that other people didn't see. He felt that he could actually figure out a strategy to beat Foreman. And so while other people were saying, no, don't do it, he was gritty. So obviously most people who have any success, particularly success at the level that Muhammad Ali had have a lot of grit and here you see it. And the strategy that he came up with was, hey, this guy hasn't gone past three rounds. If I can just outlast him, he'll get tired. And so that's where Ropa Dope was born. So he just laid on the ropes and allowed Foreman to pummel him. And he did indeed win that fight, but obviously taking that many shots from George Foreman is not gonna be particularly good for your body. So what ended up happening was that he started to experience a lot of damage. First, his kidney report was coming back pretty bad and then he was starting social signs of neurological damage. And his fight doctor, Ferdy Pacheco, basically was like, yo, I don't think you should be fighting anymore. And Teddy Brenner, who was the person who put on his fights at Madison Square Garden, obviously huge financial incentive for Ali to continue fighting, but was a very good friend of Ali's, also said to him, hey, this is bad, you shouldn't be fighting anymore. When both of those people said that to him, he refused to quit. Now these are people saying the medical reports are really bad here. And one of them said, I don't want you to not remember who I am in 10 years. So when he refused to quit, they quit him. So Teddy Brenner said, I'm never putting on a fight of yours at Madison Square Garden again. And Ferdy Pacheco's fight doctor quit him. He did continue to fight to the point where he couldn't even get licensed in the US. Before that happened, Larry Holmes beat him and cried afterwards because it was such a bad pummeling. And he ended up, I think it was like in the Bahamas in a fight with like cowbells and everybody had the same gloves and he was still losing there because he just would not stop. And I think that this is the problem is that under the right circumstances, when it's worthwhile, grit is indeed good. But what we can see is how easily grit becomes folly in that one person. Now, when we go to the cultural aspect, people don't know that part of his story. They know the rumble in the jungle. They know about him beating Liston, but they don't know this decline and the fact that people were telling him to quit and he refused. And that's a little bit part of the problem, right? I mean, you would hope if anybody is object-lessed in this because Ali is either getting of us over a certain age will remember, not only was he a great boxer, but he was so quick-witted and he had the most facile tongue around. And it was disturbing to see him for decades, kind of shuffling around, unable to speak. And it's like a Greek tragedy almost. But we don't learn that, right? No, we don't. Let's talk about some of the obstacles, some of those mental heuristics that you were talking about that keep us from kind of quitting at the right time. You talk a lot about the sunk cost fallacy. Can you explain that? Yeah, so that would be really kind of the number one cognitive bias, which results in a failure to stop. And it's an error that we make where we take into account what we've already spent on something and trying to decide whether to continue on and spend more. That could mean money, but it could also mean time, effort, attention that we've put into something that we have started. And we don't wanna quit once we have done that. So we could think like simply put, let's say that you see a stock and it's trading at 40 and you do your analysis and you say, I don't think this is a buy, right? What that means is that it doesn't matter if you bought the stock at 50 and it's now trading at 40. If it's not a buy and when you come fresh to the decision at 40, it's not a hold just because you bought it at 50 and it's now trading at 40. But we know that people will not sell it under those circumstances. They say things like, if I sell it now I can't get my money back. So this is something that you saw at poker all the time, right? So people would be playing poker. They would get involved in a hand. The math would go against them. So that's the worthwhile piece as the math goes against you. When you say that, I mean, they know the cards they're holding, the odds. Right, so they're looking and it's like, okay, I'm 8% to win this pot, right? Like, honey, I have to hit an inside straight. But I'm in so deep. And they'll say it out loud. That's the thing. They'll say, well, I couldn't fold. I had too much money in the pot. And it's like, well, the money that was in the pot that doesn't belong to you anymore. It already went into the pot. An entire, you know, part of my past life is coming in front of my eyes right now. Yes, right. So one of the things that we need to remember is this idea of, well, you know, like you start a project and you say, I don't want to waste at the time. Right, I can't stop now. I don't want to waste the money. Is that we make this particular mistake, which is we think about waste as a retroactive problem, but it's actually a prospective problem. It's not retrospective. So we think about waste as what, I don't want to waste what I've already spent. But the actual waste is that causing you to put another dollar or another minute or another bit of your attention or effort into something that is no longer worth doing. And that's the waste. So we have to always be eyes forward and say, I have to, how do I think about this as a fresh decision? Would I do this if I were fresh? So is the sunk cost fallacy, the second one that I wanted to talk about was loss aversion. How is, what's going on where we really don't want to lose things, right? Yeah, so that, so loss aversion. So sunk cost fallacy was first identified by Richard Thaler, Nobel laureate in economics. Loss aversion is from Daniel Kahneman and Amos Tversky. Daniel Kahneman also a Nobel laureate in economics. Amos Tversky sadly passed away from cancer before he could win the Nobel, but surely would have. And there's a pair of concepts from Kahneman-Tversky. One is loss aversion and the other is sure loss aversion. And these together make it very hard for us to quit. One is related to the sunk cost fallacy, one is not. So let me explain. I'm sure that you have had conversations with someone who's like in a relationship that very clearly is not healthy or in a job that they hate, why are you in this job? I didn't realize this was an intervention for me, but I thank you all for coming here. And they come to you and they have this conversation about like I should break up with the person that I'm with or I should quit my job or whatever. And they keep repeating that conversation to you. And you finally say to them, I don't understand like why aren't you quitting your job? And they say, well, what if I quit and my new job I hate? Why aren't you breaking up with this person? Well, what if I break up with them and the next person that I'm with, I also don't like? Right, and it's a little confusing because it's like, okay, but you know you hate the situation that you're in. So I'm just framing that up for loss aversion and sure loss aversion. So sure loss aversion is that we don't like to take losses on paper and turn them into realized losses. So if the stock is, I bought it at 50 and it's trading at 40, I have a paper loss of $10. It's not until I sell it that it becomes a sure loss. And we're very adverse to that. So when we think about volatility seeking or wanting to gamble, when we're in the losses, we really like to keep the gamble on because then we have the possibility of wiping that paper loss off the books and turning that into either breaking even or a gain. That's true with the relationship too. If you quit the relationship, then it was sort of for nothing, right? Okay, so that's sure loss aversion making you not leave. But then the question is why do they then say, what if I go to the new one and I hate that too? When surely the probability of hating the new relationship is much less than the probability of hating the one you're in, which is 100%. The probability of hating the new job is much less than hating the one you're in, which is 100%. So why are people saying that? And it's because we are very adverse to starting new things that have some absolute loss associated with them. Even if probabilistically it's a better situation, the idea that it might not work out will stop us from starting things. So to put it simply, loss aversion stops us from starting things that we ought to. Sure loss aversion stops us from stopping things that we ought to. And that pair is really deadly. Is it because we don't understand probability or what? I don't think it's that we don't understand probability. I think it's that we don't think in probabilities very easily. So I had a conversation with someone who was in this very situation. They were an ER doctor, named with Sarah Olson Martinez. And she really, really hated her job. She wasn't really in the ER very much anymore. She had become an administrator. There was a whole bunch of reasons why she didn't like the work. And she reached out to me to ask about whether she should quit her job. And I talked to her and her description of how much she hated this job just caused me to be confused. And I just said, I don't understand. Like, why are we having a conversation? You know, she had a new job in the offering. I said, why aren't you taking this job? She said, well, what if I hate that one too? So I said, okay, well, imagine it's a year from now. What's the probability you're happy in the job that you're in now? And she said, zero, I know this. I've been unhappy for like five years. So I said, okay, well, this new job that you're thinking about, what's the probability you'll be happy in that job in a year? And she's, well, I mean, I don't really know, but I would say maybe 50-50. And I just looked at her and says 50% greater than zero. And it was like this light bulb, you know, and literally she quit the next day. And I think the problem is that we just don't naturally think that way because of these types of shortcuts we think. So that's a long way around the problem, right? But if we're just like, well, I don't wanna waste what I've already done. And she said that, she goes, what about all my training? And da-da-da, like, cause she was gonna leave the field, right? And, you know, we already did that, right? Or, you know, I don't wanna start things that might have some loss associated with them. They can serve you in certain situations, but not in a more complex decision like that. The endowment effect. Yeah, so the endowment effect is that we love things that we own much more than identical things that we do not own. So that could be material things, like I'm sure that you've all experienced like going to sell your car and looking at the Kelly Blue Book and just thinking it was outrageously low, but then seeing a car that's just like yours and thinking the Kelly Blue Book is outrageously high. In fact, the endowment effect was first noticed by a guy named Jack Netsch, along with Thaler and Coniman, actually. They had an economist friend who in the 1950s was collecting bottles of Bordeaux. And he was buying the bottles in the 50s for between five and $10. This is a very well-known economist, right? This is a smart person. By the late 60s, the market, like it had exploded for Bordeaux. Like these were very in demand. And the same bottles that he had bought for five to $10 were now trading at auction for $100 to $200. So they asked the economist friend, hey, why aren't you selling your bottles at the auction? He said, well, because I can't get enough for them. And then, so then they asked the logical follow-up, which is, well, then why aren't you buying them at auction? He said, because they were too expensive. So that's the endowment effect. Now the thing- Did the economist, I'm trying to remember from the book, did he know that he was becoming a kind of joke to the profession? No, this is the amazing thing is that they kept writing about him because Jack Netsch wrote a lot of papers on the endowment effect and was always mentioning the economist. And he still was like, eh, whatever, I don't wanna. So he never did correct the error because the thing that we have to remember is these cognitive illusions are very strong. So with the endowment effect, it's not just about material possessions, it's about your ideas. So it's not just I own this stock. And so I think it's more valuable than an identical stock that I don't own. But it's also, I own this idea. And so I don't wanna give it up. So you can probably see that in politics, right? For an academia, I mean, certainly- For sure, exactly, everywhere. So, but to your point, I think the thing that we need to remember about the cognitive biases is that I think that because we're talking about cognition, we think it's somehow like, ooh, with willpower or knowledge, I can just overcome it. But what we have to realize is that there's all sorts of ways that in terms of the way that we process the world, we do have shortcuts. So one of them is our visual system. So as an example, Jerry here is casting a larger image on the back of my retina than someone who's in the back of my room. But I still know they're the same size, even though the image that Jerry is casting on my retina is much larger than the one in the back. And the reason is that there's all sorts of shortcuts that my visual system takes, which allows me to judge that that person is farther away. And so therefore would logically do this. So where we can see that particular shortcut going wrong is I'm sure you've all experienced that when the moon is on the horizon, it looks very, very large, but when it's right up above you, it looks very, very small. And that's because when it's above you, you don't have the same visual cues. And so you're getting fooled by the size of the castle pretty small image on your retina, right? So you're getting fooled by the size of that image. With ideas and things like that though, is how do emotions filter into this? Because you're talking about cognition and then also kind of how we perceive the material world or the world out there. But then the economists who couldn't part with his Bordeaux or buy more, how much of, is there an emotional component to that that is clouding his application? Yeah, I'd rather, like, if I can divide it up a little bit. So emotion is bad just in the sense that it short circuits your ability to reason. But I think that it's good to divide this particular world up into cognitive errors and then motivational errors. So on the cognitive side, we take a lot of shortcuts with cognition. So an example would be something called the availability bias, which is the more easily something is recalled from memory, the more frequent that we think it is. And you can imagine that's a pretty good shortcut when you're living in a tribe of 300 and a very, very small area, right? So if you come across something a lot, it's gonna be more easily, it's gonna be easier to recall and it probably is occurring more frequently in your world. But not when we're watching the news and we think that terrorists attacks are much more likely than they are or what not, right? So, particularly because there's a negative activity bias to the news. So that's a shortcut that goes wrong in a big world, but not a small world. So those are errors of cognition. But then we also have motivational errors that have to do with, we have a motivation to maintain a positive self-narrative and basically to think well of ourselves. So when we're thinking about things like quitting a project that we've started or quitting a stock that we've bought or quitting a relationship or quitting an idea, when we do that, that's hard because it kind of goes against this ability to have a positive self-narrative because then we feel like we're not consistent and we have a desire for it to be consistent over time and we feel like we've made a mistake. And of course, the world is probabilistic. So you can make a perfectly good decision that doesn't work out well. You can form an idea based on incomplete information and then when you learn new facts, then you can change your idea and it doesn't mean that you were wrong to hold the belief in the first place, but that's the way that we process it. So I think that people, when they think about that world, they're thinking about emotion or ego, but I think it actually is driven from this motivation to be seen as a consistent actor over time and to not wanna feel like we were wrong. So that leads to the last kind of obstacle that I wanted to talk about, which is in a chapter you talk about quitting who you are and you talk about Sears Roebuck, which was fascinating as well as a number of athletes, not just Muhammad Ali, but a gymnast whose name I'm sorry, I'm forgetting right now, but who was done by the time she was like 21 and it's like hard to give up and you've written that we need to be careful about tying our identity to any single thing that we believe kind of about ourselves. Yeah, so I think the sort of motivational issue, Sears is such a good example of that. So Sears Roebuck and company obviously founded in the late 1800s started with a catalog called The Big Book of Bargains, it was 512 pages and most people were rural, we didn't have cars then and if you wanted to get a bicycle, how are you gonna get a bicycle? You're gonna get it from Sears Roebuck and company. They did go public I think in the early 20s, 1920s obviously and it was the largest IPO at the time I believe and Sears was worth like $26 million at the time which was an obscene amount of money in the early 1920s. It's really hard and again I guess for people of a certain age, Sears looms large, especially around Christmas time because they always had the catalog, the wish book catalog, but it doesn't really exist anymore. Right, so by 1950 it represented 1% of US GNP. That's how big that company was. So in the 1930s they started building retail locations because the reason that the catalog had been so great was people didn't have cars, but then people had cars. But they had good brand awareness, so they start building retail locations, people are driving to the stores again by the 1950s 1% of US GNP and then by the late 70s they start to falter as you start to see Kmart come into the world, that was a competitor but then so that was kind of pushing them from the bottom but then also you had like Saks Fifth Avenue and so forth, pushing them from the top and they sort of lost their place in the retail world. By the 1990s they were no longer the number one retailer that went to Walmart and then later Target. And then Kmart also sort of went by the wayside. They merged in the 2000s in a latch just every time they saw something. It was really kind of like low IQ cousins married. It was, they called it a double, they called it a double suicide. Yeah, it was the worst merger. And then I think it was like, I think like Apollo Capital may be invested in them and then they went broke. Okay, so that seems like a reasonable story but the story that people don't know about Sears is that in 1934, remember they started building retail locations because people got cars and someone at Sears had a very bright idea which is people are driving cars to our stores, they need insurance. And so they founded an insurance company that was called Allstate Insurance. How many people knew that Sears founded Allstate, right? That's shocking. Okay, so Allstate by the way, when I wrote the book which was in 2021, the market cap for Allstate I think was 40 billion. I don't know what it is today. But anyway, so they founded Allstate Insurance. Then in the 70s they found a Discover card and as Dean Witter which was a stock brokerage which created a meme stocks and stocks because you could go into Sears and get stocks and stocks. And we don't know what Colwell Banker, sorry, Discover was spun off by itself. It's worth billions of dollars. And then Dean Witter was acquired by, I think it was Morgan Stanley, I think it was Morgan Stanley or JP Morgan. And at the time I represented 40% of that company's value so you can figure out what that's worth today. And then in the early 2000s they acquired Colwell Banker which later formed Reology but that company at the time is worth over $2 billion. Okay, so how many of you are like, wait, how did Sears go broke? That's weird. They owned all of this value. And the answer is that remember in the late 70s they start to falter and by the 90s they're no longer the number one retailer. Now a sane person who did not have these issues about identity would look at this and say, well, we should ditch this crappy retail business that isn't doing any good for us and we should keep these other things and be a financial services industry. We should be a financial services company. But the board met to discuss what to do, what to do. And their answer was, we need to get back to our retailing roots. And so they spun off Allstate. Obviously they sold Dean Witter, Discover in a package deal and they sold off Coldwell Banker. Because the thing was that if you asked the man on the street, hey, what do you think Sears is? They would all say it's a retail company. Not a single person in this room knew that they had found it Allstate insurance. So it wasn't their identity and the board said we need to get back to our identity. And this is the problem. It just causes you to not see what's worthwhile and what's not. Because we want to keep that through line, that consistency in who we are. Reason, obviously, is a political magazine. I want to talk about a couple of political cases of not knowing when to quit and that you discussed. There's a few in the box. Yeah, we're going to be here for a couple of weeks. But specifically I'd like to zero on two particular examples. And the first is the Vietnam War, which is kind of a fascinating and dark chapter in American history as well as in your discussion of quitting and then also California High Speed Rail, which is ruinous in many ways, but is lighter, let's say. But what was going on with Vietnam and quitting? Yeah, so there's a giant in the field of what's called escalation of commitment. So escalation of commitment is a term that basically refers to the fact that while we have an intuition that when we get signals from the world that we should stop what we're doing, that we actually don't and we escalate our commitment to the cause. And the giant in the field who was really one of the pioneers in thinking about this from sort of the motivational side in psychology is a man named Barry Stahl. And Barry Stahl was actually inspired to start to explore this topic because of the Vietnam War. Because when the Pentagon Papers came out, of course it became clear that the Undersecretary of Defense had very clearly told everybody, don't start this because once you start it, you won't be able to stop. And Tony Thomas, who is a general for SOCOM during the Afghanistan War, said something similar that the problem is that once you lose a life, what happens? People say, don't let my child have died in vain. Which I'd like unbelievably understandable. Unbelievably understandable because it's obviously, it's heartbreaking to lose your child, to lose your spouse, to lose your parent in a war. I mean, clearly that's heartbreaking. The issue though, if we go back to the beginning, is that that doesn't mean that I should put somebody else in harm's way. The worth of your death being worthwhile, don't let you have died in vain, has to do with whether it was correct for me to have you in that conflict in the first place. Not whether somebody else comes in and continues with the conflict or finishes the conflict. So George Ball, the Undersecretary of State had said, if you start, you're not gonna be able to stop. Because separate and apart from the cost in terms of dollars, you have this horrible cost in terms of lives. And if you're gonna think about sunk cost, right? Now you're talking about the worst cost of all that's gonna make it so that we can't stop. So you saw that with the Vietnam War going on much longer than really, I mean, I think we can all agree it went on longer than it ought to have. And then you can see that with Afghanistan too. Yeah, I mean, talk, you know, one of the things Barry Starr, you write about his paper, which was called Waste Deep, The Big Muddy, after a Pete Seeger song. You know, and that was out there and it was kind of widely known. And then we get Afghanistan and Iraq. Is that, you know, and this might be beyond your, you know, your field, but is it that people didn't understand like they forgot these lessons or they didn't know them or like, how does, how do you get the generation that fought in Vietnam then persecuting two of them for much longer at, you know, a more kind of insane pace? Yeah, I think it goes back to Barry Starr's central insight, which is that we have the intuition that will stop when the signals tell us that we should but that intuition is bonkers. So I don't, I mean, I remember that when we went into Iraq, it was supposed to be relatively surgical, right? We're just gonna come in and out, we'll be done, right? And the thing is that these things just aren't like that. Like once you start losing lives, again, separate and apart from the money, which would make it hard regardless. But once you start losing lives, I mean, Tony Thomas really says it's incredibly heartbreaking when you're talking to a Gold Star family and they say, don't let my child have died in vain. Like that, you know, he says like, how do you walk away from that, right? It's just so incredibly hard to do. So it doesn't matter that we can look back and say, well, clearly there were signals that we ought not to have, you know, that we ought not to have prosecuted that, prosecuted that war rather for as long as we did. But when we're in it, and this is a really important concept from Daniel Kahneman, being in it means in the decision at that moment, right? The cupcake is in front of you, don't try to decide to die it at that moment, right? So when you're in it, when you've already taken the losses, it's incredibly hard to be rational about whether you should continue on or not. And that's why we need to be very careful about what we start, because we know it's gonna be hard to stop. California High Speed Rail, this is a program that started under Jerry Brown in his second two terms as governor of California. It was supposed to cost $33 billion and be completed in 2020. It's now expected to cost over $128 billion and is not operating, is not likely to be operating. Even if we all live to be 200, it probably won't be operating. They started on this project 15 years ago. How, you know, obviously they should quit. Gavin Newsom, when he became governor of California, that would have been a perfect time to be like... He had the opportunity and he... And he was like, no, we're gonna keep going. Yeah, what's going on there and how, other than to say, you know, you shouldn't have started this, how do you end that? So it's a good example of some cost, right? So by the time it got to Gavin Newsom's desk, they had spent $7.2 billion and Gavin Newsom doesn't wanna waste the taxpayers' money. Now, again... Well, they passed taxpayers' money. He's willing to waste the taxpayers' money in the future. But now, as you just said, they're gonna... So they're on their way to waste $121 billion more. But that's always that, you know, what a waste of the taxpayers' money if you stop. But I think, so basically what you outlined very nicely, sort of what the trajectory of this was. But the problem here is that, so when we start things, there are certain things that we can do that will make it much more likely that we'll stop when we should. And one of them is to run an exercise which is called monkeys and pedestals. And this comes from Astoteller over at Axe, which is Google's innovation hub. And he's obsessed with the idea of quitting because they're doing moonshots, which are, of course, are quite uncertain. And so you really wanna be reactive to the signals that it's not worth continuing because you only get a certain number of moonshots, right? So monkeys and pedestals just goes like this. Imagine that you decide you're gonna quit your job at reason and instead you're gonna go and stand in time square with a monkey who's juggling flaming torches while standing on a pedestal and you're gonna have your hat out. And obviously if you could execute this, you know, you would make a lot of money. I mean, that would be pretty fantastic, a monkey juggling flaming torches. So there's two pieces of this putting this act together. One is to build the pedestal and the other is to train the monkey to juggle the flaming torches. And Astoteller's insight is that you should always start with the monkey. It should always be monkeys first and you should never, ever start building the pedestal before you figured out the monkey. There's three reasons for that. Reason number one is that if you can't train the monkey, you don't need the pedestal. So the monkey is the big unknown and without the monkey, you don't need any pedestal. So why start there? Reason number two is that if you start building a pedestal, you already know you can do it. So you are creating the illusion of progress where none exists and that's actually quite bad to not make any progress, but think you are. And that brings us to the third insight is that building the pedestal will make it harder to stop. Why? Because you've created sunk costs and you've created an endowment. I've created this beautiful pedestal. And then you end up with thesis creep where now it's like, yeah, the monkey can't juggle the flaming torches but I'll have it play an accordion instead, which is a pretty old act. So let's apply this to the California bullet train. Why is the California bullet train having so many problems? Well, because there are two large mountain ranges in California, one is called the Tachapi Mountains, which is to the north of LA. And the other is the Diablo Range, which is to the south of San Francisco. And if you wanna connect LA to San Francisco, you're gonna have to somehow get through these mountain ranges in a seismically active area. So the two mountain ranges are clearly the monkeys. So if you do monkeys and pedestals, you say, we wanna do this, you say, okay, there's two monkeys, these mountain ranges that we have to blast through in a seismically active area. They did not do that because the first section of track that they approved was between Madera and Fresno, which is on Flatland. And we've been building track on Flatland for 200 years. And we already know we can do it. So it is no progress at all. When it went to Governor Newsom, instead of saying, hey, hold on a second, because by 2018, they all of a sudden noticed eight years later, oh wait, there's mountains. I never mentioned before that. In 2018, they say, oh my gosh, there's mountains. We're gonna revise the budget to 88 billion, okay? Cause they just appeared. They haven't been there for millions of years. So now it goes to Newsom. Remember, they've spent $7.2 billion, billion, to build this little section of track between Madera and Fresno. And he says, no, no, no, no, no, we're not gonna stop and check out these monkeys and try to do an engineering study. Instead, why don't we build track between Bakersfield and Merced that's on Flatland to the north of the Tata Chape mountains. And then after we're done with that, we'll build track between San Francisco and Silicon Valley, which is also on Flatland. And that's how you get to now, today, a $120 billion proposed budget because they didn't do monkeys and pedestals. So if they had just done monkeys and pedestals, they would have said, let's not do anything until we do an engineering study on the mountains. And we would be in a lot better shape understanding whether this was worth building or not. I'll point out also that in the same time this was going on in Florida, which is very Flatland, we have a great recent video about this not sure if it's in the Florida issue, but there's a high-speed rail that's running from Miami to Orlando. Yes, because that's a pedestal, so you just go ahead and build it. Yeah. There's no problem with building it, it's all Flatland, go ahead. It's doing 18 daily round trips and unfortunately the people who are running it, it's a company called Brightline, are now they're working towards $3 billion in subsidies, in federal subsidies. So they will start becoming monkeys or pedestals or something, but something will get gummed up. So two other ways, the monkeys and pedestals is a great way to think about making better decisions. Two other things you talk about are quitting coaches and kill criteria. Talk about quitting coaches. Yeah, so I talked to you about your friends who are in the bad relationships and the bad jobs. So you can see that pretty clearly in them. But when you're in that situation you don't see it very clearly for yourself. Why? Because you're in it. One of the best things you can remember for decision-making is am I in it? Because if you're in it, just know your decision-making is gonna be probably more irrational than normal. So what do you do then? Do you not make decisions when you're in it? Yeah, it would be good not to make decisions when you're in it. So there's two ways to help you do that. One is that I can talk to somebody who's not in it. So remember, you're gonna see my relationship more clearly than I am, you're gonna see my job situation more clearly than I am, so I can go and get your help. So I can find someone who's not in it but it's very important they have to really care about me. So they have to care about my long-term best interest. So now, when people care about you they lie to you though, right? So, I mean, somebody says like, should I break up with my partner? And everybody's like, no, right? Because you're like, oh, what if they don't? And then I have to go out to dinner with them the next week. So one of the things that has to behoove you is someone who's looking for a quitting coach is for me to say, Nick, tell me the truth. I need you to tell me what's in my long-term best interest and I promise you whatever you say, I'm not gonna get mad. So if you can create that agreement, now you can tell me what I need to hear and not worry so much about hurting my feelings. And the ultimate quitting coach relationship was between Kahneman and Thaler. Kahneman and Thaler, so Kahneman recognizes in himself that he has trouble stopping dead-end research lines. So he uses Thaler to help him with that. Is there an AI that's gonna bring these? Sorry, reverse. Excuse me, it's the reverse. Kahneman is Thaler's quitting coach. That's a big difference, right? Yeah, Kahneman is Thaler's quitting coach. So Thaler has trouble stopping stuff and Kahneman helps him. Is there an AI that's gonna bring that online for those of us who aren't personal friends with noble accountants? You know, I don't know, like I'm an AI bearer. So, I mean, when it stops hallucinating, come back and talk to me. That's the best part of it. That's the best part of it, it will hallucinate. Okay, so those are quitting coaches. What are kill criteria? Okay, so another way to not be in it is basically, so remember I said with the California bullet train, we could do monkeys and pedestals first. So notice, I'm doing some decision work in advance where I can now do, I can identify the monkeys. I'm gonna go monkeys first, which means I'm gonna attack the mountains first. And I'm gonna do an engineering feasibility study. So now we can add to that kill criteria. And kill criteria are basically thinking about what are the signals that I could see in the future that would tell me that I ought to stop. The very signals that Barry Stahl would say you're gonna ignore once you're in it, right? So we don't wanna just sort of see them as they come along, we wanna think in advance. So we could say things like what would be the results of the engineering feasibility study that would tell me that I ought not to pursue this. You could talk about there could be hard debt things on budget, right? If the budget has exploded from 33 billion to 88 billion, I should abandon the project when I've only spent 7.2, right? So the easiest, the simplest version of a kill criteria that I could offer you would be a stop loss in stock trading. So I bought a stock at 50, I put in an order that if it's trading at 40, I'm gonna sell it. So that's me recognizing in advance that I'm gonna be a bad decider at the moment it's trading at 40. So I ought to decide that in advance. Now, that actually really helps you. And I think that when I talk to people, they think, well, isn't that a distinction without a difference, right? If I know that if it's trading at 40, I ought to sell them. When it is trading at 40, why wouldn't I? And it just turns out that writing it down in advance and committing to the action in advance just really massively increases the chances that you're gonna follow through on it. Best done with a quitting coach because now you can hold me accountable to my kill criteria also. You made your name as a professional poker player which was an occupation that you sort of stumbled into and you write about this in various places including quit while pursuing a PhD in psychology. Can you talk about the intersection of why you quit your doctoral studies, how you applied a lot of what you were kind of learning there to poker and then why you ultimately came back to finish your degree? Yeah, so I have a chapter in the book it's called Lessons Enforced Quitting. So we have to remember that quitting is an always voluntary, right? So we have different words for things but like if I fire you, I'm quitting our employment relationship but also if I fire you, I'm forcing you to quit our employment relationship, right? And I'm sure that many of you have had the experience of someone breaking up with you and you're very sad and your heart broken but then you sort of look back and you realize that was for the best, right? It actually ended up working out better for me. You get fired from a job and that ends up being something that works out for you. So I had this experience very early on. I was finishing my PhD, I was out on the job market, I was actually coming for my first job talk at NYU and I'd been struggling with a stomach illness that became very acute and I ended up in the hospital for two weeks. And it was right when all my job talks were supposed to happen so I had to cancel all of my job talks and take some time off. So I was forced to quit. My body forced me to quit. During that time, in order to support myself I started playing poker. And that's how I ended up in poker because it turned out I really loved it and I was good at it and I was making a lot of money and I decided to stay. The lesson for forced quitting is that once we start something, we lose sight of the other opportunities. What could I be doing with this time? What could I be doing with this attention, this effort, this money? And we don't really explore, right? So we can think about it as so when we're apartment hunting, at first we're exploring. So we're looking at all sorts of apartments, trying to figure out what we like, what neighborhood do we want to live in, so on and so forth. And then once we set on an apartment and we get it, we're not really looking anymore. And that's true of opportunities in life. So what happens is that we sort of, we bear a lot of opportunity costs that there's other things that might make you happier or more prosperous or whatever but because you're stuck in the thing you already started, you don't actually go and explore those other opportunities. When you're forced to quit, it forces you to now go explore. So that's what happened to me, that's how I ended up in poker. The other lesson though that we have to remember is that quitting is very often not a one-way door. You can quit things and come back to them. People get divorced and then marry the same person they divorced, I don't know if that's a good idea but maybe it is, right? So the thing was that I always kind of knew that I could come back to it if I really felt like it. What motivated you then? After 30 years as an ABD, you finally finished. And I was such an ABD, like I'd already finished my dissertation work, like it was, you know, I probably at the time was just like, yeah. Did you have to update everything? Where were they? Oh yeah, so here's what happens. So I'm having a conversation with Phil Tetlock and Barb Meller. So Phil wrote a book called Super Forecasting. I would highly recommend it to everybody. It's an amazing book. And that's based on work that he did with his wife, Barb Meller, so we're both at Penn. So I knew them. He was very helpful with thinking and bats. I appear in Super Forecasters. Actually, I'm a character in the book. I'm a narrative. And during the pandemic, he asked me to start designing some forecasting training for him. He just basically said like he was working with IARPA and which is the research arm of the intelligence community and they were just having a big fail on teaching people to do something called counterfactual forecasting, which is just what ifs. So it would be a what if like, what would be the probability of Russia invading Ukraine in 2022 if the US had had had a more muscular response to the annexation of Crimea in 2014? So it's just that what if, like if I re-round history and did something different, what would have happened? So they were trying to take novices, not Super Forecasters, but novices, and train them to be better forecasting and it wasn't fact forecasters, it wasn't going well. So he came to me and he said, you know, you write books and you're a reasonable teacher and you used to play poker. So you understand forecasting. How would you do a training? So I was like, man, it's the pandemic. I'm stuck in my house, whatever. Sounds like fun. And so I created a training and he said, okay, let's test it. And we did a pretty large scale study and got very good results. It turned out that it was quite effective. And then he said, what would you do next? And I said, well, I would test this other thing. He said, well, why don't you go do that? We did a second large scale study and got very interesting results from that. And he said, well, what would you do next? And I said, okay, well, I would do this next and got great results. And then he said, what would you do next? And I said, okay, well, I would do this. And all of a sudden we have four studies. New chapters, yeah. And he then says to me, you know, this is enough for a PhD. It's actually more than most dissertations, but it was all a little bit accidental, right? Cause I was just like, sure, sounds like fun. You know, I'm stuck in my house and it ended up working. So then we go to Penn and, you know, find out what you have to do. And it turns out that I had what they had called sunsetted, you know, which I don't know, seems agist, but whatever. Oh, so none of your credits worked? Well, so classwork was fine. They don't make you redo the classwork, but you have to re-qualify, meaning you have to redo your major area exams, which was a four month thing when I was there. They made it a little bit easier. And then you have to do your dissertation, but here's the kicker. You have to do that all in a year. So once you enroll, you have exactly a year to complete your qualifying exams and your dissertation, which is a lot to pack into a year. So I asked them, well, when I did my qualifying exams, it was five open ended questions in four months. So what are the qualifying exams now? They said, well, you either have to write a grant proposal or a publishable review of the literature. I was in the middle of writing quit. So I said, oh, I'm doing that right now. And it's publishable. I know that, definitely so. So I worked with them, ended up that being my qualifying exams and defended that in December of 22, and then started writing up the results from the study, wrote a very long dissertation because it was a lot of studies, defended that on June 15th of 2023 and was degreeed August 4th of 2023. That's great. Congratulations. That's the kind of grit we knew you had in you. Yes, I know. It was very great. It just shut up about quitting. I have to say when I was in the middle of writing the dissertation, which I do have a job in a life, I would start at three in the afternoon and ended 11 at night, which to much to my husband's consternation. And I did look at him at one point. I said, why am I doing this? Like, I don't need this degree. I've already written books and I already teach and I already do this and whatever. And then I stopped myself and I said, I know my future self is gonna be very happy to have finished this. There you go. Very nice. When you were talking about locking in on apartments or decisions, you talk about how aunts actually, aunts who are famous for kind of doing tasks very directly, there's actually aunts that kind of are around the edges that are kind of sussing out new opportunities. How does that apply to humans? How should it? First of all, I'm so happy that you mentioned that because it's one of my favorite things in the book. You know, like authors have little favorite bits. So this is one of them. So when you look at aunts, we have this image from cartoons or songs like the aunts go marching one by one of aunts marching in a single file line to wherever they're going. But when you actually look at a colony of aunts, forage or aunts, what you'll see is about 10 to 15% of the aunts are just like wandering around looking sort of aimless. Like they're not with the program. So the question is like, you've got all these aunts going one by one, which is happening because they go to food, they find food and then on the way back to the colony, they're laying down a pheromone trail, that attracts other aunts to the trail and then that's obviously self-reinforcing if it's a good food source. So it's really directing the aunts to the food. So why are these 10 to 15% of aunts like aren't helping because they're just like wandering around. They're not going and getting the food. They're like... I call those relatives. Yes, relatives at Thanksgiving as soon as you need to do the dishes. So the question is like, what are these? Like ant anarchists or something? Like what's the deal with these? Beatniks. The Beatniks exactly, like freeloaders. And it turns out that no, they are not ant anarchists. They are actually doing a big service to the colony, which is they are continuing to explore food sources. And why are they doing that? Well, because the world is an uncertain place. So the ants find a nice, juicy watermelon on someone's deck that has fallen down on July 4th and they're all going single file to go check out that watermelon, but then what happens when it gets cleaned up? If they don't have another food source available, they're kind of, you know, S-O-L. And so what those other, that 10 to 15% of the forager ants are doing is continuing to explore. So now we can think about, this is actually a game theory concept, which is explore, exploit. Not exploit in like the manipulative way. It just means using something, you know, keeping something good going. The ants that are going to the watermelon are exploiting that food source. The ants that are continuing to wander around are exploring for new food sources. So this was what happened to me when I had to leave graduate school, I was exploiting grad school and going to become a professor in academics. But then when I had to quit, I had to go explore. And then I explored poker and sort of found that and did that for a while. But then also always still kept exploring. Like I learned that lesson because I started giving talks in the station. And you wrap this up in a kind of modern workplace thing as if somebody says, hey, I'd like to take you to lunch to talk about a job opportunity. You should always go, even if you're happy. Because people say to me, like, should I talk to the recruiter? Because, you know, I love my job. I'm like, of course you should talk to the recruiter because you could get fired tomorrow. Your company could go out of business or here's the thing about the ants, right? Is they've got kind of like a plan A, which is the watermelon. And the other ants are going around and exploring for a plan B. Okay, so you always want to have a plan B in case something happens for a plan A. But sometimes when they're exploring for plan B, they find something that's better than plan A. And you wouldn't do that if you weren't continuing to explore. So as humans, we really need to take this into account and say it's fine to exploit something, but you always have to have some exploration going on. Otherwise, we can think about that in our personal lives, but in terms of not like going and talking to the recruiter where you might find something even better or if you get fired or a new boss comes in that's toxic or whatever, you have a relationship with the recruiter. But we can also think about this from a business standpoint, the most notable example being Blockbuster, right? Blockbuster, which dominated the world of like at home viewing, had retail stores with stuff, physical things that you went and rented. And they didn't explore. They were just exploiting that business model. And we know that they're out of business because they didn't go and say, maybe we should dip our toe in the street. And they even had a shot at buying Netflix at a ridiculously low. Why would we do that? We've got a good thing going over here. They were not ant-like. And this is why I spend my weekends in Times Square training a fire juggling monkey. Yes, exactly. Because you never know. We're gonna put a lid on it to use a Joe Bidenism. I wanna thank Annie Duke for talking and she's the author most recently of quit the power of knowing when to walk away. Thank you so much. Thank you for having me.