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Powerful branding can not only change how you feel about a company, it can actually change how your brain is wired.
- Powerful branding can not only change how you feel about a company, it can actually change how your brain is wired.
- "We love to think of ourselves as rational. That's not how it works," says UPenn professor Americus Reed II about our habits (both conscious and subconscious) of paying more for items based primarily on the brand name. Effective marketing causes the consumer to link brands like Apple and Nike with their own identity, and that strong attachment goes deeper than receipts.
- Using MRI, professor and neuroscientist Michael Platt and his team were able to see this at play. When reacting to good or bad news about the brand, Samsung users didn't have positive or negative brain responses, yet they did have "reverse empathy" for bad news about Apple. Meanwhile, Apple users showed a "brain empathy response for Apple that was exactly what you'd see in the way you would respond to somebody in your family."
Tips from neuroscience and psychology can make you an expert thinker.
This article was originally published on Big Think Edge.
Problem-solving skills are in demand. Every job posting lists them under must-have qualifications, and every job candidate claims to possess them, par excellence. Young entrepreneurs make solutions to social and global problems the heart of their mission statements, while parents and teachers push for curricula that encourage critical-thinking methods beyond solving for x.
It's ironic then that we continue to cultivate habits that stunt our ability to solve problems. Take, for example, the modern expectation to be "always on." We push ourselves to always be working, always be producing, always be parenting, always be promoting, always be socializing, always be in the know, always be available, always be doing. It's too much, and when things are always on all the time, we deplete the mental resources we need to truly engage with challenges.
If we're serious about solving problems, at work and in our personal lives, then we need to become more adept at tuning out so we can hone in.
Solve problems with others (occasionally)
A side effect of being always on is that we are rarely alone. We're connected through the ceaseless chirps of friends texting, social media buzzing, and colleagues pinging us for advice everywhere we go. In some ways, this is a boon. Modern technologies mediate near endless opportunities for collective learning and social problem-solving. Yet, such cooperation has its limits according to a 2018 study out of Harvard Business School.
In the study, participants were divided into three group types and asked to solve traveling salesman problems. The first group type had to work on the problems individually. The second group type exchanged notes after every round of problem-solving while the third collaborated after every three rounds.
The researchers found that lone problem-solvers invented a diverse range of potential solutions. However, their solutions varied wildly in quality, with some being true light bulb moments and others burnt-out duds. Conversely, the always-on group took advantage of their collective learning to tackle more complex problems more effectively. But social influence often led these groups to prematurely converge around a single idea and abandon potentially brilliant outliers.
It was the intermittent collaborators who landed on the Goldilocks strategy. By interacting less frequently, individual group members had more time to nurture their ideas so the best could shine. But when they gathered together, the group managed to improve the overall quality of their solutions thanks to collective learning.
In presenting their work, the study's authors question the value of always-on culture—especially our submissiveness to intrusions. "As we replace those sorts of intermittent cycles with always-on technologies, we might be diminishing our capacity to solve problems well," Ethan Bernstein, an associate professor at Harvard Business School and one of the study's authors, said in a press release.
These findings suggest we should schedule time to ruminate with our inner geniuses and consult the wisdom of the crowd. Rather than dividing our day between productivity output and group problem-solving sessions, we must also create space to focus on problems in isolation. This strategy provides the best of both worlds. It allows us to formulate our ideas before social pressure can push us to abandon them. But it doesn't preclude the group knowledge required to refine those ideas.
And the more distractions you can block out or turn off, the more working memory you'll have to direct at the problem.
A problem-solving booster
The next step is to dedicate time to not dealing with problems. Counterintuitive as it may seem, setting a troublesome task aside and letting your subconscious take a crack at it improves your conscious efforts later.
How should we fill these down hours? That's up to you, but research has shown time and again that healthier habits produce hardier minds. This is especially true regarding executive functions—a catchall term that includes a person's ability to self-control, meet goals, think flexibly, and, yes, solve problems.
"Exercisers outperform couch potatoes in tests that measure long-term memory, reasoning, attention, problem-solving, even so-called fluid-intelligence tasks. These tasks test the ability to reason quickly and think abstractly, improvising off previously learned material to solve a new problem. Essentially, exercise improves a whole host of abilities prized in the classroom and at work," writes John Medina, a developmental molecular biologist at the University of Washington.
One such study, published in the Frontiers in Neuroscience, analyzed data collected from more than 4,000 British adults. After controlling for variables, it found a bidirectional relationship between exercise and higher levels of executive function over time. Another study, this one published in the Frontiers in Aging Neuroscience, compared fitness data from 128 adults with brain scans taken as they were dual-tasking. Its findings showed regular exercisers sported more active executive regions.
Research also demonstrates a link between problem-solving, healthy diets, and proper sleep habits. Taken altogether, these lifestyle choices also help people manage their stress—which is known to impair problem-solving and creativity.
Of course, it can be difficult to untangle the complex relationship between cause and effect. Do people with healthy life habits naturally enjoy strong executive functions? Or do those habits bolster their mental fitness throughout their lives?
That's not an easy question to answer, but the Frontiers in Neuroscience study researchers hypothesize that it's a positive feedback loop. They posit that good sleep, nutritious food, and regular exercise fortify our executive functions. In turn, more potent executive decisions invigorate healthier life choices. And those healthy life choices—you see where this is going.
And while life choices are ultimately up to individuals, organizations have a supportive role to play. They can foster cultures that protect off-hours for relaxing, incentivize healthier habits with PTO, and prompt workers to take time for exercise beyond the usual keyboard calisthenics.
Nor would such initiatives be entirely selfless. They come with the added benefit of boosting a workforce's collective problem-solving capabilities.
Live and learn and learn some more
Another advantage of tuning out is the advantage to pursue life-long learning opportunities. People who engage in creative or problem-solving activities in their downtime—think playing music, puzzles, and even board games—show improved executive functions and mental acuity as they age. In other words, by learning to enjoy the act of problem-solving, you may enhance your ability to do so.
Similarly, lifelong learners are often interdisciplinary thinkers. By diving into various subjects, they can come to understand the nuances of different skills and bodies of knowledge to see when ideas from one field may provide a solution to a problem in another. That doesn't mean lifelong learners must become experts in every discipline. On the contrary, they are far more likely to understand where the limits of their knowledge lie. But those self-perceived horizons can also provide insight into where collaboration is necessary and when to follow someone else's lead.
In this way, lifelong learning can be key to problem-solving in both business and our personal lives. It pushes us toward self-improvement, gives us an understanding of how things work, hints at what's possible, and, above all, gives us permission to tune out and focus on what matters.
Cultivate lifelong learning at your organization with lessons 'For Business' from Big Think Edge. At Edge, more than 350 experts, academics, and entrepreneurs come together to teach essential skills in career development and lifelong learning. Heighten your problem-solving aptitude with lessons such as:
- Make Room for Innovation: Key Characteristics of Innovative Companies, with Lisa Bodell, Founder and CEO, FutureThink, and Author, Why Simple Wins
- Use Design Thinking: An Alternative Approach to Tackling the World's Greatest Problems, with Tim Brown, CEO and President, IDEO
- The Power of Onlyness: Give Your People Permission to Co-Create the Future, with Nilofer Merchant, Marketing Expert and Author, The Power of Onlyness
- How to Build a Talent-First Organization: Put People Before Numbers, with Ram Charan, Business Consultant
- The Science of Successful Things: Case Studies in Product Hits and Flops, with Derek Thompson, Senior Editor, The Atlantic, and Author, Hit Makers
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If something is "true," it needs to be shown to work in the real world.
- Pragmatism is an American philosophical movement that originated as a rebuke to abstract European philosophy.
- The pragmatic theory of truth argues that truth and reality only can be understood in their relation to how things work in the real world.
- The trouble is that the theory devalues the term "truth," such that it only applies to one particular moment in time. But Charles Sanders Peirce offers a clever way out.
Think of wine. Now take away from this idea every possible property it has. Take away its redness or whiteness, its intoxicating effect, its taste, the slosh it makes, and so on. What are you left with? Nothing. An empty phoneme of the mind. An invisible color. A silent noise. Do this with any concept, and the result is the same.
This is exactly the kind of consideration that led the American Pragmatic movement. The likes of William James, John Dewey, and Charles Sanders Peirce argued that all of our concepts, and the truth of anything, are determined solely by the practical effects they have and how these extend into the real world. The idea of truth, and even of having intelligible thoughts at all, cannot be understood without reference to what that something does or how it behaves in the real world.
Pragmatic theory of truth: a very American idea
Peirce was the first to coin the term Pragmatism as a particular school of American philosophy, and it was a conscious response to the more untethered and arcane metaphysics coming out of Europe. Across the pond, and especially in Germany, philosophers since Immanuel Kant seemed to be locked in a competition to make philosophy as inaccessible and polysyllabic as possible (reaching its apogee in Georg Hegel). Pragmatists wanted to bring philosophy back and make it more relevant.
American Pragmatism gave out an exasperated and down-to-earth plea for philosophy to stop being quite so abstract.
According to Peirce, there was not any truth "out there" in the "real world" that we somehow, magically, could unearth. Instead, truth was defined by how it works in our everyday lives. So, my belief in gravity is true because of its practicality — that is, it works every day. It is true and meaningful precisely because it makes my pen drop, my coffee cup smash, and pole-vaulters come crashing down. Likewise, we know something is hard if it does not scratch easily, or if it helps you break a window, or if it hurts like heck when you hit it with your toe.
In short, we measure things by how they work and what they do. The same goes for truth.
Of course, an immediate objection comes to mind: surely the truth will change from person to person or from time to time. For instance, the Aristotelian model of gravity and the Ptolemaic model of planetary motion worked quite well for millennia. Does that mean these scientifically disproven models were actually true?! William James would argue yes, but Peirce would say no — and he offered a nuanced way out.
The coalescence of inquiry
For Peirce, "truth" could eventually coalesce or converge by the idealized agreement of intelligent inquirers. That is to say, scientists, scholars, and society will one day be so informed about the world that their answers to "what works" will be the only, final, and universal "truth" or "reality." As Peirce wrote, "The real, then, is that which, sooner or later, information and reasoning would finally result in, and which is therefore independent of the vagaries of me and you." And, elsewhere, he says reality is "what may finally come to be known to be in the ideal state of complete information."
For instance, Ptolemy's notion that the sun revolves around the Earth was never true but rather mistaken as true. What is true is defined by the end result of more advanced inquiry, such as that of Copernicus and Galileo. (Of course, we might still be mistaken today.) We cannot know if something is true until this perfected end point has been reached — the point when there are no alternative answers to the question, "What works best?"
Acceptance of error and self-correction
Most commentators today do not think Peirce meant there had to be an actual and future idealized end point where there would be no more debate and disagreement. Rather, Peirce's Pragmatism speaks to two broader and much more widely accepted epistemic virtues: an openness to accept error and the willingness to correct it.
Under Peirce's account, something is true or real insofar as it works within the world. This is not just for everyday experiences like gravity causing us to drop things. He meant that things must also work in the science laboratory as well.
Today, we practice science by presenting a hypothesis, which is then tested in experiments over and over again. Scientists are constantly calibrating the truth of hypotheses and theories based on how they work in the world. And, according to Peirce's Pragmatism, "although the conclusion [of an experiment] at any stage of the investigation may be more or less erroneous, the further application of the same method must correct the error."
So, we will get closer and closer to the truth as society becomes more and more informed. But this also means accepting that future societies will possibly, or even quite likely, correct what we today call truth.
The American way
Pragmatism has a certain intuitive appeal. Truth which is abstracted from how things operate in the real world often makes very little sense. The idea of a world "out there" beyond our minds — a world which is unseen, unknown, and unimaginable — is also unintelligible (as Kant pointed out) if it is not tied, in some way, both to how the world works and to what we humans can interact with.
People like Peirce should be praised for a very American Pragmatism that gave out an exasperated and down-to-earth plea for philosophy to stop being quite so abstract.
People tend to reflexively assume that fun events – like vacations – will go by really quickly.
For many people, summer vacation can't come soon enough – especially for the half of Americans who canceled their summer plans last year due to the pandemic.
But when a vacation approaches, do you ever get the feeling that it's almost over before it starts?
If so, you're not alone.
In some recent studies Gabriela Tonietto, Sam Maglio, Eric VanEpps and I conducted, we found that about half of the people we surveyed indicated that their upcoming weekend trip felt like it would end as soon as it started.
This feeling can have a ripple effect. It can change the way trips are planned – you might, for example, be less likely to schedule extra activities. At the same time, you might be more likely to splurge on an expensive dinner because you want to make the best of the little time you think you have.
Where does this tendency come from? And can it be avoided?
Not all events are created equal
When people look forward to something, they usually want it to happen as soon as possible and last as long as possible.
We first explored the effect of this attitude in the context of Thanksgiving.
We chose Thanksgiving because almost everyone in the U.S. celebrates it, but not everyone looks forward to it. Some people love the annual family get-together. Others – whether it's the stress of cooking, the tedium of cleaning or the anxiety of dealing with family drama – dread it.
So on the Monday before Thanksgiving in 2019, we surveyed 510 people online and asked them to tell us whether they were looking forward to the holiday. Then we asked them how far away it seemed, and how long they felt it would last. We had them move a 100-point slider – 0 meaning very short and 100 meaning very long – to a location that reflected their feelings.
As we suspected, the more participants looked forward to their Thanksgiving festivities, the farther away it seemed and shorter it felt. Ironically, longing for something seems to shrink its duration in the mind's eye.
Winding the mind's clock
Most people believe the idiom “time flies when you're having fun," and research has, indeed, shown that when time seems to pass by quickly, people assume the task must have been engaging and enjoyable.
We reasoned that people might be over-applying their assumption about the relationship between time and fun when judging the duration of events yet to happen.
As a result, people tend to reflexively assume that fun events – like vacations – will go by really quickly. Meanwhile, pining for something can make the time leading up to the event seem to drag. The combination of its beginning pushed farther away in their minds – with its end pulled closer – resulted in our participants' anticipating that something they looked forward would feel as if it had almost no duration at all.
In another study, we asked participants to imagine going on a weekend trip that they either expected to be fun or terrible. We then asked them how far away the start and end of this trip felt like using a similar 0 to 100 scale. 46% of participants evaluated the positive weekend as feeling like it had no duration at all: They marked the beginning and the end of the vacation virtually at the same location when using the slider scale.
Thinking in hours and days
Our goal was to show how these two judgments of an event – the fact that it simultaneously seems farther away and is assumed to last for less time – can nearly eliminate the event's duration in the mind's eye.
We reasoned that if we didn't explicitly highlight these two separate pieces – and instead directly asked them about the duration of the event – a smaller portion of people would indicate virtually no duration for something they looked forward to.
We tested this theory in another study, in which we told participants that they would watch two five-minute-long videos back-to-back. We described the second video as either humorous or boring, and then asked them how long they thought each video would feel like it lasted.
We found that the participants predicted that the funny video would still feel shorter and was farther away than the boring one. But we also found that participants believed it would last a bit longer than the responses we received in the earlier studies.
This finding gives us a way to overcome this biased perception: focus on the actual duration. Because in this study, participants directly reported how long the funny video would last – and not the perceived distance of its beginning and its end – they were far less likely to assume it would be over just as it started.
While it sounds trivial and obvious, we often rely on our subjective feelings – not objective measures of time – when deciding how long a period of time will feel and how to best use it.
So when looking forward to much-anticipated events like vacations, it's important to remind yourself just how many days it will last.
You'll get more out of the experience – and, hopefully, put yourself in a better position to take advantage of the time you do have.
The same parts of the brain that help us navigate complex social interactions can also drive us to make wildly bad investments.
- Stock market bubbles, or asset bubbles, refer to a situation where stocks are valued far above what they're fundamentally worth.
- Unique factors contribute to each stock market bubble, but all play out in a generally similar series of stages.
- Research on the human social brain network offers insight into why investors participate in asset bubbles.
In retrospect, there were clear signs that the stock market bubble was about to burst in 2000.
The mid 1990s was a time of rapid technological growth and, consequently, wild speculation. Internet companies promised to transform the world. Dotcom stocks soared to incredible highs, with many multiplying in value shortly after initial public offerings, like Priceline, whose shares rose 1,000% just one month after going public.
But there were problems in 2000, ranging from a recession in Japan to the inevitability of the Federal Reserve raising interest rates. There was also the simple fact that most dotcom companies weren't profitable. In fact, many were in debt.
Some investors realized this but bought into the story that huge profits were just around the corner. They weren't. By 2001, most dotcom stocks had dropped at least 75 percent from their 52-week high, wiping about $1.75 trillion off the market.
But the dotcom bubble wasn't the first asset bubble to inflate and burst, and it wasn't the last. Unique factors contribute to each asset bubble, but all feature broad phases that are remarkably similar. And that's largely because of the strong psychological pulls of herd mentality.
The science of 'herd mentality' | Your Brain on Money | Big Think www.youtube.com
What is a stock market bubble?
A stock market bubble — or more broadly, an asset bubble — occurs when the price of an asset inflates far above what it's fundamentally worth. Like soap bubbles, asset bubbles inevitably pop, causing a sharp drop in price. Asset bubbles can occur in any market — including stocks, real estate, and commodities — and they've existed ever since people have been trading in markets.
One of the earliest and most famous examples is the tulip mania that occurred in 17th century Europe during the Dutch Golden Age. Tulip bulbs became so fashionable that prices rapidly soared, with some rare bulbs reaching prices that far exceeded the average annual income of Dutch workers. Then the market suddenly crashed in 1637.
Popping a bubble
To get a conceptual grasp on how bubbles form, imagine a high school party that gets out of hand. The party starts with a few people, maybe hanging out at a kid's house whose parents are out of town. A handful of other kids hear about the party and show up. Then word spreads among the whole class.
Afraid of missing out, carfulls of kids start showing up. Soon the house is packed with people. By midnight, a few wiser kids leave because it's getting out of hand. The party keeps raging. But inevitably, the cops arrive and bust the party. Some of the kids who stayed too late suffer the consequences.
In retrospect, it was clear that the party was going to get busted. So why did people stay? One reason is that, like stock market bubbles, it's impossible to predict exactly when the cops are going to show up — or, in other words, when collective emotions are going to shift from euphoria to panic.
In his 1986 book Stabilizing an Unstable Economy, the American economist Hyman Minsky gave a more technical description of how asset bubbles play out:
- Displacement: This phase occurs when some external force, such as a new technology, captures investors' attention. The dawn of internet companies is a good example: A handful of investors think the internet will be a game-changing technology, so they decide to invest early. Prices start rising.
- Boom: As more investors enter the market, prices rise at a quicker pace. The media starts covering the boom, which attracts even more investors, who fear that they will miss out on a great opportunity.
- Euphoria: Prices skyrocket to wild highs as investors throw caution to the wind. Although there are some pessimists (known as bears) criticizing the market, the optimistic investors (bulls) and analysts try to justify the inflated prices by touting questionable metrics and arguments. Some bulls say prices will never crash because the asset or asset class represents a "new paradigm" or because there will always be buyers waiting to gobble up any price drops, an idea called the "greater fool theory."
- Profit-taking: To lock in profit, a handful of "smart money" investors sell some or all of their asset holdings while prices are still high.
- Panic: Due to some kind of event, prices suddenly begin to crash. Euphoric buying turns to panic selling, which causes many former optimists to sell their holdings at any price, even at a loss. With essentially no new buyers showing up, prices drop even further because supply far exceeds demand.
Remember this old stock market bubble chart with all the stages explained? Well, I pasted the Bitcoin price chart o… https://t.co/mnBAvZnvF8— Peter Hamza (@Peter Hamza)1517510900.0
You can see these boom-and-bust cycles play out in markets throughout history, from tulips to Bitcoin. But what causes investors to keep inflating and popping stock market bubbles over and over again?
Conformity and the social brain network
Like other primates, humans are highly social creatures who model their behavior on what others are thinking, feeling, and doing. Over millions of years, the human brain has evolved to perceive social cues and use that information to strategically regulate our behavior. Social information is processed in multiple regions of the brain, which together make up the social brain network.
This network often helps us navigate social dilemmas. For example, if you're visiting a foreign country for the first time, and you're unsure of how to behave at, say, a religious site, you might copy the locals' behavior so you don't offend anybody and your visit goes smoothly.
But our tendency to copy others isn't always adaptive; sometimes the herd is wrong. What's strange, however, is that people tend to have a hard time recognizing when the herd is wrong, even when it's obviously wrong. No other psychological test illustrates this more clearly than the Asch conformity experiments.
In the 1950s, the psychologist Solomon Asch conducted a series of experiments designed to test how often individuals went along with a majority opinion that was clearly wrong. The original experiment went like this: Eight participants were asked to complete a perceptual task in which they had to look at a "reference" line on a card. Another card had three lines on it, one of which was clearly the same length as the reference line.
The participants were asked to say which of the three lines matched the reference line. In reality, all but one of the participants were actors. The actors were instructed to sometimes uniformly give the right answer but other times uniformly give the wrong answer. Over a series of rounds, the results showed that the non-actor individuals tended to agree with the obviously incorrect majority opinion, at least some of the time.
Interestingly, the psychological pull of conformity can even affect people who are familiar with the design of the Asch experiment, as Freethink's video shows.
"That intelligent, well-meaning, young people are willing to call white black is a matter of concern," Asch wrote.
One of the pairs of cards used in the experiment. The card on the left has the reference line, and the one on the right shows the three comparison lines.Fred the Oyster via Wikipedia
The members of Reddit's WallStreetBets community often call themselves "apes," a joke that refers to how they often "ape into" investments without giving it much thought or just because others are also doing it. It's a pretty accurate term when you consider how non-human primates make decisions.
To gain insights into the evolutionary roots of our own decision-making behaviors, researchers have trained primates like capuchin monkeys to trade coins for food and then studied how they spend the coins under various conditions. The results suggest that some primates seem to share several biases with humans, including:
- The endowment effect. Some primates seem to overvalue assets that are in their possession over ones that are not.
- Choice-induced preference changes. Some primates will shift their preferences to match their own previous decisions. For example, if primates rate two treats as equally desirable, but then are forced to choose between the two, they'll later devalue the treat they didn't choose.
- Loss aversion. Some primates avoid gambles that are framed as "losses" when compared to an arbitrary reference point. In other words, when given two trading options that pay the exact same amount, primates tend to prefer the option that frames their payout as increasing from an arbitrary starting point, rather than decreasing to the same payout.
But monkeys also exhibit another human bias when making economic decisions: conformity. Michael Platt, a neuroscientist and marketing professor at the Wharton School of the University of Pennsylvania, told Freethink:
"What we've found is that monkeys in a market where there's another monkey will tend to follow what that other monkey does. So monkeys tend to follow the herd. They copy each other, and they tend to buy, buy, buy. And they get into a bubble, and they lose everything."
Platt said the monkeys' behavior is funny, sure, but also profound because similar studies on humans yield the exact same results.
"That's really interesting to us, because it tells us that this behavior that we see in people — and that has enormous repercussions — it's there from a heritage that we share with monkeys going back 25 million years," Platt said.
Breaking from the herd
Our deep-rooted tendency to follow the herd is more of an evolutionary feature than a bug. We often benefit from following group signals, similar to a gazelle that takes off sprinting not because it sees a cheetah, but because it sees other gazelles sprinting.
Still, stock market bubbles reveal the dangers of blindly following the herd. So, how can people resist buying the top of stock market bubbles?
The answer might be to slow down. Although our social brain network enables us to quickly glean useful information from the herd, that speediness comes at the price of accuracy. Put another way: If you're consistently "aping in" on hype-driven stocks, you might make some quick gains, but you also might get caught holding the bag when the next stock market bubble bursts.
"In thinking about herding in bubble markets, I think it's reasonable to suppose that if we could slow people down, that would allow more evidence to accumulate, and more likely to make a better decision," Platt said.
Why your brain wants you to follow the crowd.
- What can monkeys teach us about stock market bubbles? It turns out that monkeys make decisions much like investors on the trading floor—they develop a herd mentality, mimicking the behavior of others until overinflation and the eventual pop.
- "This tendency to follow the herd emerges from our social brain networks," explains Michael Platt, professor of neuroscience at the University of Pennsylvania. This network allows us to learn and adapt based on information from those around us. But these learnings are not always positive.
- In the context of money and the stock market, following the herd could result in bad financial decisions. The key, Platt says, is learning to take a step back and resist impulses, which in some ways goes against our evolution and the way our brains work. "There's a trade off between speed and accuracy in decision-making," he says. "If we could slow people down, that would allow more evidence to accumulate, and they're more likely to make a better decision."