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Emotions, Moods and Reactions

Dec 06
Love1

What Happens When We Expect a Catastrophe

By Emotions, Moods and Reactions, Happiness

I write sometimes in these columns about thinking biases that can affect our decision making. Today I want to talk about a way of thinking that can undermine our resilience during hardship, as well as our ability to flourish and succeed.

Catastrophes happen in life. Natural disasters, tragic accidents, terrible illnesses, heart-rending betrayals, economic calamities, war, famine… Human history has been filled with these, and most of us have been at least touched by something catastrophic.

But a catastrophe is not usually the most likely scenario – if they were common, we wouldn’t think of them as catastrophes; they’d just be the kind of normal troubles we expect in life. There can be disappointments, hardships, struggles, and losses that hurt badly, requiring us to step up to challenges we would rather not have to step up to. These are not uncommon.

But a true catastrophe is rarely likely. When we expect catastrophe as a likely scenario, that expectation creates its own troubles, and they can run deep.

Yet our current media and political culture thrives on creating and maintaining an atmosphere of impending catastrophe. This is true across the political spectrum, and throughout much of the common space we share through internet, TV, movies, print media… The conversation that is mediated by every kind of media is filled with visions of catastrophe.

The very way that these threats are framed do not encourage us to think clearly, investigate deeply, or to search for practical solutions.

The way they are framed encourages us to feel terrified, enraged, and helpless. And this can undermine our capacity for success, happiness and well-being across every aspect of our lives.

This orientation is guaranteed to activate our primitive reactions of fight, flight, and freeze – reactions that are designed to give us a last-ditch possibility of surviving the mortal attack of a predator.

While these parts of our nervous system serve an essential survival function when needed, they are very rarely actually needed. They also undermine our capacity to think clearly, our desire and ability to seek understanding, empathy, and compassion for others, and our internal sense of well-being and basic trust.

Catastrophic thinking can undermine resilience, and increase our risk for anxiety, depression, and PTSD. It can also undermine our capacity for success: those who tend to not engage in catastrophic thinking also tend to be the ones who excel.

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Nov 09
Love1

How To Save a Lot of Money by Recognizing This Bias

By Emotions, Moods and Reactions

You’re out for a very nice dinner with your spouse, and you decide to share a bottle of wine. You look at the wine list, and you see several bottles listed in the $170 range, a few that are in the $50 range, and quite a number of them around $80-$90. $80 is more than you would’ve thought to spend when you left the house, but somehow you’re drawn to the $87 bottle of Cabernet.

$50 being the lowest price seems miserly for a special evening out, and with $170 as an example of a “very nice bottle of wine,” $87 now seems very easy to accept.

This is an example of anchoring. The $170 figure drew your expectations in the direction of that figure, higher than you would’ve chosen otherwise.

If the highest price bottles were all in the $80-$90 range, you probably would’ve chosen a less expensive bottle.

Another example of anchoring is called “rationing,” where you’re told that there’s a limited supply of something.

In one experiment at a supermarket, Campbell’s soup was on sale at 10% off. When there was a sign that also said, “Limit of 12 cans per person,” people bought an average of 7 cans per person – twice as many as when there was no limit. The “anchor” of 12 cans drew people away from the 3-4 cans they would otherwise have bought, and toward the number 12.

If you look for it, you’ll see this technique everywhere in marketing. In most cases it’s relatively harmless, drawing you to buy something that’s a few dollars more than some other product, or to buy a higher quantity of something you would probably use anyway. But as we’ll see, awareness of this technique when you’re facing higher cost items like a car or a home can save you a lot of money.

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May 15
Love1

An Internal Pathway for Clearer Thinking

By Emotions, Moods and Reactions

 

I’ve been focusing in these columns on the ways our emotions can interfere with managing our money and investing well. Today I want to talk about the positive state that we want to aim for most of the time – which will connect us with the emotional resources and clear thinking we need to make our best decisions.

Researchers like Steven Porges call it our social engagement system.

When we feel safe, and trusting, and relaxed, our heart rate and blood pressure lowers, and our heart rate variability increases – our heart rate rises a little on the inhale, and lowers on the exhale, and the difference between these is our heart rate variability. Higher heart rate variability is a good thing. This is all very beneficial for our immune system, our cardio-vascular system, our organs, and our overall health. Read More