In “Choiceology with Katy Milkman,” Dr. Katy Milkman mixes science and finance by exploring the psychology and economics behind our investment decisions, no matter how big or small. Through true stories and current events, Dr. Milkman and renowned psychologists explore how they relate to the latest research in behavioral science, all in the name of helping us make better decisions for our health, wealth, and everything in between.
Whether it’s the way we spend our money on those seemingly extraordinary expenses or the snap judgements we make based on a mere second-long interaction with someone or being redirected through rejection, “Choiceology” reveals what really goes into making a decision and what we can learn from it.
“Choiceology with Katie Milkman” is a Charles Schwab podcast that has put out over 60 episodes exploring how psychology, behavioral economics, and social science factor into every decision we make. New episodes are typically released once a month and are just 30 minutes a piece.
By starting every episode out with a vignette, whether it’s a professional wrestler who saved a drowning boy or the 1980 drilling accident in Lake Peigneur that caused a sinkhole to swallow boats, barges, and chucks of land, we are unknowingly being introduced to a psychological study. In the latter half of the episode, Milkman then speaks with scientists, professors, and even financial experts about the behaviors exhibited in these stories.
For instance, take Allen Sarven, also known professionally as Al Snow in the WWE. In the ring, he dutifully takes on the role of the villain (or the heel, as they call it in the WWE), and molds himself to whatever storyline is necessary to keep fans rooting for him or against him. Obviously this is all an act, but not all WWE fans seem to take that into consideration. His gimmicks in the ring, including talking manically to a mannequin as a way to make his character come off as if unhinged in some way, have led some fans to believe that this performance is actually who he is.
But a vacation in Florida had his antagonist persona take a full 180. When a young boy got caught in a vicious riptide, brought on by a tropical storm that hit the southern state, Allen found himself racing towards the ocean without a second thought. He nearly drowned himself while saving the child, but managed to tear himself and the boy free of the rip and returned safely to shore. Eventually, news stations caught wind of the story, and he was hailed as a hero for weeks on news stations across the country. Allen argues that anyone in his shoes would have done the same.
So what’s the point of this story? Katy then speaks with psychologist Richard Nisbett about something called the fundamental attribution error. In Richard’s words, this fundamental attribution error is our tendency to attribute causality to dispositions of the object/actor, which basically boils down to attributing someone’s outward persona to their inherent kindness/morality and not to the situation they are in.
He says it’s basically humans ignoring external stimuli, like when we flip someone off in traffic for cutting us off when they’re trying to rush their pregnant wife to the hospital. He tells us that incomplete information can result in consequential errors, whether it’s trusting the wrong person, believing someone to be rude, or vice versa. Basically, it tells us that most people’s actions are more of a product of their situation than we ever assume.
Since this is a podcast all about the psychology behind our decisions and how we can analyze ourselves to make better decisions for our future, at the end of every episode Katy tells us how we can use this lesson in our everyday lives. In this case, she talks about the ways this fundamental attribution error factors into the ways we invest, specifically in industries like crypto, where stories of people becoming millionaires overnight or losing everything in one fell swoop are around every corner.
Every single episode of “Choiceology with Katy Milkman” teaches us something new about ourselves, our friends, and how we can use that to invest. Whether it’s humanity’s wildly inaccurate ability to assess risk, the neuroscience of regret, or the psychology of avoidance, Katy has covered it all. In fact, this podcast is so enjoyable, you’ll actually forget that it’s all about investing and the choices that come with it. Be sure to check out “Choiceology with Katy Milkman.”