Sean Murray 4:03
I like the example of procrastination. In fact, I sent the questions for this interview about two hours before the interview. I guess that was my own version of procrastinating. And maybe in my mind, it feels like I got more out of my brain or out of that experience because I was under the deadline. I was able to get the best questions out. Can you help me understand the why and rational choice? So there’s this theory of decision making–rational choice theory. And you come from University of Chicago; you’re a University of Chicago trained economist, which is steeped in this idea of rational choice; efficient markets; we make these decisions based on our preferences, and we optimize. Why is procrastination–you said it shouldn’t even exist in that framework? Help me understand that.

Richard Robb 4:47
As you mentioned in my Chicago training, the commitment of the Chicago School to rational choice. I should say at the outset, I’m not a heretic. I think that’s a very powerful method for understanding human behavior. I argue in the book that it’s not the whole story. Take writing these questions. I guess if you could have done them yesterday, and then let it sit for a while; look them over again today; get up in the morning, and you’ll have your perfectly nutritious breakfast after eight hours of sleep, and then sit down and look over these questions one more time and fine tune them; conduct yourself exactly according to that way of life. If you were now make any of it into a game, then maybe you would get absolutely the best results. But that’s not the kind of creature that we are. And I think by understanding that it’s not just about choosing to get the best results; to gratify our pre-existing desire. Why I think it matters is it can make us more at ease with the kinds of decisions that we already make, and it will extend our conception of ourselves not just to be a robotic creature that makes choices to get ahead; to get the kinds of things we want. It could be consumption, and leisure, and status, and long list of things that you might want. But sometimes we engage in an altruistic gesture that has no explanation. Or we might stick stubbornly to some belief that matters to us; that constitutes our identity. It doesn’t really fit with the facts of the world anymore, but we don’t care. It’s just who we are. We think to ourselves, “Why should I change my belief? Maximize the desires of this new person I might, might become; I just want to be who I am.” So all those things don’t fit in to the model, gratify our preferences, given the resources that we have at hand to get what we want.

Sean Murray 6:49
Yeah, so I’ve experienced this myself, you know? I’ve been going along, and I make a decision that I can’t seem to justify based on my preferences, but if I look at my belief system, or if I look at my values, if it seems to just align with those, and therefore, I make the decision. And you, you’ve got this term for itself, which I like because it’s, its intrinsic. It doesn’t require a justification. We do it be–sometimes spontaneously; sometimes because it aligns with kind of our identity or in who we are. And what I found really interesting is that, you know, it doesn’t–you make a really good case that it doesn’t really fit into rational choice. So we have this rational choice view of decision making, and we’re not abandoning it. I get that. It’s still able to describe a lot of what we call decision making. But there’s this other realm, and it’s helpful to understand where that’s coming from, and how to tap into it. You have some wonderful examples in the book. I like the example of the subway. You know, this kind of gets to the altruistic example. But maybe you could talk about your experience riding the subways of New York City and kind of thinking about decision making.

Richard Robb 8:11
Sometimes people will hold the door for a stranger to scramble onto the tray. Okay, you save one random stranger five minutes. Maybe 300 people are detained by 10 seconds. So that’s 15 minutes that the existing passengers have to wait. And this stranger saves five minutes. So it’s a net social cost of 45 minutes. If you’re trying to help humankind in any coherent way, it doesn’t make any sense. So I used to think during those 10 seconds, that person who’s holding the door that you’re not allowed to do it. Either not making the calculation correctly or maybe they have this thing called “availability” or “salience bias” with a thing that’s right in front of you. You give it extra weight that it doesn’t deserve because of faulty way of thinking. So maybe, maybe that’s what they’re up to. But over time, I realized sometimes it would be just an act of mercy. And the person holding the door pays part of the cost and everyone else pays part of the cost. And there’s nothing more to be said. You know, a related example, a biblical story, the Good Samaritan. The Good Samaritan’s walking along the road. He sees the man who’s been beaten and robbed. He stops to check on him; get him on his feet. That’s completely rational. That’s what the Good Samaritan would do every time. In keeping with his values, his social norms, and then, but then he does something. Takes the man to the end. He pays the innkeeper to look after. Clearly, you can’t do this for everybody that he may have seen; quickly run out. Why lavish? All this extravagant tension on just one man. If you wanted to help–like the subway where you really just cared about helping people as a whole, he behaved differently. He would help this one man, and then wait for the next one that he sees; help that person a little bit; spread it around; and find the next most needy person. Do we say that the Good Samaritan is irrational; that he’s subject to a bias? I don’t think that feels right. I probably wouldn’t do that under those circumstances, but I’m not going to pass judgment on him, and say he’s made a mistake. We can certainly admire it from a distance and say, “Okay, he did it. Good for him.” And I don’t think we want to diagnose him with some sort of problem. It was an act of mercy. It was for itself. I think I can’t, cannot shoehorn that one into doing what’s best. It’s not best. It’s not worst. He just did it. That’s a category of examples. Spontaneous altruistic gestures or even on the opposite side, you could have spiteful gestures that have to be consigned into this other realm of for itself.

Sean Murray 11:09
I think both of those examples are good examples of challenges to the rational choice theory. And it gets to one of the aspects you talk about in the book, which is the human experience. And, you know, we don’t often make these decisions in sort of a vacuum. If we’re going to be altruistic, to your point about The Good Samaritan, he could start a fund, you know, that funds all travelers that are happened to be robbed along different roads in his community. But that’s not what happens. Spontaneously, as a human experiencing the world becomes upon a situation, and it’s a fellow brother, and it from his community, and he decides to do something about it. And that’s often what happens. You explain this in the book–we go through life, things happen, and we make these decisions. We don’t have time to do all the rational calculations. And they may seem irrational from some outside objective observer, but it feels right. It feels like it aligns with who we are; what we want to be maybe, and, or we just do it. We do it because something flips, something clicks, and we say this is the right thing to do.

Richard Robb 12:21
Yeah, and you shrug. And there’s no explanation. You can try to invent an explanation. You might come up with, say something about some Western notion of karma. Or think of a divine scorekeeper, who takes an interest in human affairs, and, but that’s just a rationalization. It isn’t why you did it. But we’re good at telling stories afterwards and obscuring from ourselves, the way that life is twofold. Some of it is rational or purposeful, and some of it is not. Put it as I said in the book, quoting Nietzsche, his description of Heraclitus, “Life is a mixed drink, which must be constantly stirred.”

Sean Murray 13:01
Absolutely. Well, it, it also reminds me of, you know, in decision making, we have reason and we have intuition. Sometimes we tap into one; sometimes we tap into the other.

Richard Robb 13:12
Let me say a thing about intuition, you know, the traditional economist’s model is at home with intuition. You know, we say that Milton Friedman himself; one of the two greatest champions of rational choice economics, who ever lived along with Gary Becker. He said that the billiards player doesn’t know the laws of physics and geometry, but we can model him as if he could. He behaves optimally. A story that I tell in the book–that isn’t known to economists, but it should be–from Schopenhauer’s World as Will and Idea describes an elephant that has traveled across Europe, and it’s crossed many bridges. It comes to one bridge. It sees men and horses cross the bridge, and the elephant stops in its tracks. It’s determined that this bridge is not going to bear its weight. And that is an idea that’s central to rational choice economics; that when the stakes are high, people and even animals are pretty smart. They figure out the equations even if they can’t write them out on the whiteboard.

Sean Murray 14:19
Yeah, I love that story. That even in the animal realm, an elephant seems to have some kind of calculation going on and looking at all the variables and saying, “No, I’m not gonna go across that bridge.” And, you know, intuition, when it comes to decision making, my understanding of, of intuition is that we, as we go through life, we, we sort of tag these experiences, right? We tag these experiences with our emotions, levels of dopamine might go up or down based on a good or positive, and then when it (*inaudible*)–experience, and then when it comes time to make a decision, our limbic system, our brain is sort of going back and looking through all these experiences, and something about emerges. And out of that emergence, a decision comes, and I, I think there’s something related to the “for itself decision” to this neuroscience behind this and the biological stuff that’s happening to make a decision.

Richard Robb 15:15
I have some discussion about the psychology of acting first, and then, making up the reason afterwards. And after I wrote it, I ran it by the psychologists, who had done the original experiments to make sure that I was not misinterpreting it or not saying something that would embarrass myself. In terms of the underlying sensations or neurobiology, that’s–but it’s not necessary for my argument. Let me say, just a word or two when I say preferences about what I mean. If you’re given any two outcomes, and you can say, what you like best. You’re either you prefer one to the other or you’re indifferent to the two of them. Do you prefer a 50% chance of getting nothing and a 50% chance of a $1,000,000 to $300,000 with perfect certainty. You could prefer either one of those two, but you should be able to say which one you would pick if presented with the option. And it also assumes that if you prefer A to B, B to C, you’re going to prefer A to C. Preferences are transcendent. If I prefer chocolate to strawberry, strawberry to vanilla. It’d be very strange if I also prefer vanilla to chocolate. So as long as those two things describe how you choose, you can rank everything; every possible outcome to what you like most; to what you like the least. You have a certain amount of resources of income, of knowledge, of human capital. And then, the next piece in economic theory is optimizing behavior. It assumes that you can rank everything. And then, one way or another through your dopamine or your neural transmitters, you arrive at the one that’s absolutely best. And usually the criticism of this model is, you know, people can’t choose what’s best. They fall prey to these kind of mental shortcuts that are left over from our live and ancestral environment. And I think like the elephant, that people can really line them up. They’ll come pretty close. And I think, the economic model falls short. This is whole business of preferences. Does The Good Samaritan like helping this man more than that man? Just the subway rider like the stranger helping him more than all those? Those questions don’t mean anything under these circumstances that are so highly context dependent. If you’re caught up in a sport; in a game, is this the absolute best game to keep playing for the next few minutes? It doesn’t matter. That’s what you’re doing at this moment. You’re on an adventure. You’re trying to overcome an obstacle. And that’s your obstacle. That’s your challenge. It’s not necessarily the best one. You’re not irrational to pursue it. It doesn’t come into this whole world of preferences.

Sean Murray 18:04
Yeah. Now, this idea of adventure was something that I really took away from the book. That when we go to make a decision, we often are putting a lot of preference into the journey. The typical saying is, “Well, it’s not about the destination. It’s the journey.” And there’s some truth to that. And when we make a decision in our rational choice theory, it appears that it’s the destination that’s often getting measured, and incentivized, and quantified, and kind of building into the utility function. And often, it’s the journey that is–that variable isn’t necessarily coming up in the model as much. And, and so often, it’s that, that’s what the human experience is about. That’s where the learning is. That’s where your point about either being in a game or, or feeling alive; feeling, having an interesting life; living a fulfilling life we want to have. We often choose the obstacle. And it’s not necessarily rational.

Richard Robb 19:08
You know, that business about the journey being more important the destination. I remember hearing that as a little kid. I remember the feeling. I thought the point of a journey is–of trying to do something is to do it. And kind of knotted me. And I went to graduate school, and I studied economics and rational choice, and they sure didn’t give me an answer to it. Okay, well, it’s just a bunch of nonsense. But yeah, there was something to it. And as I got out into the world after school, it’s becoming. The destinations, when you get there, you just, it’s not like you’ve arrived. You pause and then you create it. It’s not like, “Okay, now I’m here and I’m happy,” and it doesn’t work that way. You have to grab on to some new challenges, some new obstacles, and if they don’t come naturally, you have to work very hard to create obstacles that will feel authentic and meaningful to you.

Sean Murray 19:59
Yeah, and you share a wonderful story in the book about, you know, having spent, I don’t know, maybe 10 or 15 years in finance; I can’t remember how long. But at a fairly young age, you sort of found yourself. If financially you could essentially retire, but you, you were eager to get back in the race; get back in the challenge to do something. I find that fascinating. I’ve never been in that situation. I think a lot of people look towards that situation as this ultimate destination in life that’s somehow going to be this point, where you’ve made it. You kind of put your feet up, and I don’t know what you do at that point, but you actually went through it. So maybe you could share a little bit about that experience and what that taught you.

Richard Robb 20:39
Yeah, you know, I was one of those people, too. I have worked for a Japanese bank for the 1990s. In the end, I was their Global Head of Derivatives and Securities Business. I loved it. I loved the bank. I loved my job, but it merged with two other banks. And then, I was, I was fired as a result of the merger. So, okay, whether I could retire, and I don’t know, but I was it was a comfortable situation for me, you know? Certain enviables like the dream. Now, I have all this leisure time, and I don’t have to worry in the short-run about finances. So I thought, “You know this, this is exactly what the theory of prediction lead to happiness.” I have leisure. I can do whatever I want. I’m free from the constraints of the job. So I get up in the morning; make breakfast for my children, they were young teenagers at the time; and I would run around the reservoir of Central Park; then come home I make breakfast, read the New York Times. It’s nine o’clock. Now what? The day is long. And then, the weekends start blending with the weekdays. It wasn’t at all what I thought it was gonna be like. I felt sort of–this feeling that I just was not in the game. I wasn’t involved. I also felt a little parasitic on the world ’cause I’m really, was just sitting there, watching it go by. And when I went to the zoo with my daughter, and I saw tigers being fed their lunches, it was; so fish that was encased in ice. And the reason they encased fish in ice, so the tiger could at least work to get their meal. Somehow that made for more fulfilled tigers, and it wasn’t just handed to them. And, you know, it was clear to me, that’s what I was. I was, I was a tiger that wouldn’t even bothering to put my fish in ice. Anyway, that was my problem at the moment. And that just came clear to me, I needed to find some things to do. It didn’t take long. That’s when I started teaching at Columbia, then it was better.

Sean Murray 22:41
Yeah, and I think that story reveals something very, very deep, and important, and even meaningful about the human experience, which is that what we choose to do, how we choose to, to be in the world is important to how we see ourselves; how we derive meaning from our lives; how we align with our purpose. And I think it’s a question that is going to become even more important in the future, when we think about our children; our grandchildren, where–what you went through is going to become, in my estimation more common. We’re going to have to make these choices. And that’s why the book, I think, is, is quite revealing and helpful. When we’re faced with these choices, we’re gonna want to think about, “Well, how do I maximize my well-being? How do I make choices that lead to a flourishing life?” And often it’s going to be, you know, it’s not going to come from rational choices; probably going to come from what you call the “for itself realm.” I think you have an anecdote in the book, actually, not from your life, but it’s sort of a thought experiment, which is the lottery winner. Do we really know what is going to drive our well-being? Maybe you could talk about the lottery winners.

Richard Robb 23:53
The example that I constructed with the lottery winners curse, a banker, who was working makes–in the example, he makes $200,000 a year; lives in New York, which is a lot of money. But it’s not a lot of money to try to raise a family of four people in New York City. They can live a comfortable life, but they still have to work hard and be careful. And he or she has a plan, and they’re working their way up; coming home tired, and putting food on the table, and life is getting better. It’s coping with the challenges on the job. And then, all of a sudden, this person gets a $10 million inheritance from a long-lost relative. So now, $200,000 doesn’t seem that meaningful anymore. You got 10 million sitting there at the back. Now, the rational choice, having more money only gives you more opportunities to maximize those preferences. You had the same preferences you had before. Now you have more money, so you should get higher up in the ranking, and get something that would increase your well-being; that would make you better off, but our banker here could feel miserable.

Sean Murray 24:59
The numbers get skewed, when you think about New York City.

Richard Robb 25:02
Yeah.

Sean Murray 25:03
But, yeah. I think, you know, sometimes these windfalls don’t create the well-being happiness that we think, right?

Richard Robb 25:09
Right. Banker can sit; live off of that money, but the whole game that he was playing that would imbued his life with, or her life with meaning is now just been shattered. It’s possible that the new life that this money can open up is going to be–make the person miserable compared to how it was before. And how can you say, in terms of a world with preferences and resources, and maximizing those preferences that having more money is going to make the person actually worse off and not better off? And yet by depriving them of the challenges that are meaningful to them, it’s possible that you could look at this person, and say, “No, it actually wasn’t so great after all. I didn’t invent this notion. A lot of real-life lottery winners are people, who have these kinds of windfalls. It doesn’t end up looking from the outside like it enhanced their lives.

Sean Murray 26:03
Yeah. And the way I look at it is there are certain variables that don’t have any easily measurable metrics, right? There are certain variables in our life that we are seeking to optimize, but they’re just not easy to quantify. And reminds me of that–you have a lot of economics jokes in your book, like, I can’t remember if you have this one or not, but the, the, the economist, who’s looking for his keys ’cause he’s lost his keys in the dark. And he’s over there by the, under the lamppost, and you come along, and say, “What happened? What are you doing?” He said, “Well, I lost my keys,” and he said, “Did you leave your keys here?” And he said, “No, I left him over there.” And, “Well, why aren’t you looking for him over there?” “Well, that’s not where the light is. The light’s over here, right?” And in some respects, it feels to me like rational choice is where the light is. It’s, it’s looking at decision making through what we can measure, and often, money is involved; this kind–because it’s the common point of comparison that allows us to measure value across these different choices. But so often in life like to your lottery winner, they find out that wow, what they thought was going to bring them a lot of well-being didn’t because that wasn’t in the calculus. The purpose of their life or other important variables just weren’t in the calculus.

Richard Robb 27:22
For sure. That joke didn’t make it into my book, but it’s a good one, nonetheless. You know, and it’s not just money, but anything that you can measure. Even self-reported happiness, you know? I have to wonder about that. When you, you ask someone, how happy are you? They’re saying, “Compared to what?” Well, they can say, “Compared to how I imagine other people are.” You can’t be that other person, and be yourself at the same time, and able to decide who is somehow happier. Or you might say, “Compared to how I used to be.” And that may explain the two main findings in happiness research. One is rivalry, where people report that they’re happier if they make more than the people around them. The other is habituation, where you seem to be happier if you’re making more than you used to make. But since happiness, say it’s not a measurable thing. The studies may tell us more about how people answer questions; to how people are really experiencing their lives. Why do people in Somalia, in Moldova, which is a very poor country report that they’re happier than Italy, and South Korea, and Hong Kong, which are rich, healthy countries, where tourists wore a long life? It seems paradoxical. Maybe it’s not telling us all that much about human nature, when we try to measure happiness by asking people.

Sean Murray 28:43
Yeah or maybe the lives of people in those countries is rich in ways that we don’t see from where we are; the value of the adventure. There’s, there’s a lot of different variables that aren’t always, you know, calculated into that equation. You have another example in the book; a thought experiment about, and I thought this was really revealing and can help us make better decisions. Because imagine a, a woman in Texas, who gets a job offer to go move to New York City. And it’s going to be more money. And the calculus in her mind is, “Well, I’ll go for two years. I’ll make gobs of money. I’ll stash it away, so I can come back to Texas ’cause Texas is really important to me. It’s kind of part of who I am and my culture, my family, and everything. And I’ll come back, and I’ll I’ll be much better off two years from now. But you recognize a very critical flaw in that thinking, right?

Richard Robb 29:37
Yeah, it doesn’t work that way. Her identity preferences that she starts with are gonna change, when she moves to New York. And she’s going to learn our ways, and has a good chance that she’ll be a different person. So if she tries to apply rational choice to this decision, you know, she could preserve herself exactly as she is. Go have a, have fun in New York for a couple years, and then return with the loot. It would be a perfectly rational idea. But knowing that she herself is going to change, it becomes a decision that defies rational choice. If you try to apply a rational metric to this decision, what you really need is a homunculus, a little person sitting on top of this woman, who can kind of think on behalf of both of those identities; who cares about them both that–in some way; and then, and then balances the well-being of the existing woman; will care about the new woman, whom she really only shares a partial connection because the new woman who’s a New Yorker is going to…as I mention in the book, speaking of subways, is, you know, after a period of time, she won’t be repulsed by the rats running around, but she’ll find them charming. All those things are gonna change about her. So because of the instability of preferences, you might say, or because change of belief in identity. It’s a different kind of got and for itself decision that she has to make.

Sean Murray 31:08
Yeah, and this is sort of a paradox for decision making. And so what, what advice–or now that we recognize that, and I think it’s, it’s a powerful recognition to know that as I make this decision, and I execute on it, it’s going to change who I am; the same thing, when you decide to get married; same thing when you decide to have kids; if those are decisions that come up in your life. They’re going to change who you are. And so, what can we take away from that understanding that’s gonna help us like we said, live a more flourishing life; maximize our life?

Richard Robb 31:40
My intention for the book is that, first and foremost, the idea that we have to try to explain everything in the single realm, in terms of rational behavior; getting what’s best; and if we don’t, we made a mistake. We have some bias, and we have to fix it; fix ourselves. I think getting rid of that idea is liberating. So I had a class I taught in Columbia called, Foundations of Individual Choice. It’s a seminar. I asked the students at the beginning of the class, “Why are you taking this?” I go around the room, and I’ll say one after the other, “You know, I don’t feel like a fully rational, calculating machine. So I’m interested in behavioral economics; behavioral economics, science of we’re choosing robotically, but sometimes those robots are badly programmed.” You know, it’s striking. I think, “Is this all we’ve got for what it is to be human? That you try to choose rationally, but sometimes you might make mistakes, and we can identify those mistakes, and correct it?” So I think the idea that there’s something more that–I think it’s dangerous, not just for our decision making, but for–it permeates the way we think of ourselves. It’s a problem that I think is neglected–all this economics and all this rational choice. Our lives permeates our language. The great economist John Maynard Keynes said just before he died, “The pseudo-rational view of human nature leads to a thinness, a superficiality, not only of judgment, but also of feeling.” I think opening up this other realm, recognizing that rational choice can explain a lot; can’t explain everything. And we’re not behaving in rational choice. It’s not just because we’re caught up in some psychological bias, but sometimes we’re just exercising our will. We’re being who we are. When we go to work, it’s partly to gain consumption and money, and for our livelihood, and it’s partly a team sport; partly the most important game that we’re going to be playing. To recognize that sometimes the facts are going to change, but we’re still going to maintain our commitment to our beliefs, stubbornly. And that doesn’t mean that we need to constantly alter them every time we find new data. We can be comfortable with having cohesive beliefs over time, or that a grander and merciful gesture is also part of who we are. I think that that creates a, for me, a kind of peace and clarity. It’s been, I find it therapeutic. Of course, I can’t boil it down into a, to a recipe, and I think, you know, the “for itself” decisions, where you don’t have rules to guide you; you’re fundamentally free. That’s the definition of anxiety. Even Adam Smith, in 1776, talked about the work that the, an entrepreneur didn’t have that word; the owner of a business would exercise anxious vigilance. That’s what couldn’t be delegated to others. Because if you could turn it into a set of rules, then you can delegate it Can’t be turned into a set of rules, and it requires judgment. And it’s personal. And yeah, you have lots of good rules, but the rules conflict with each other. So you have to choose, which one you’re going to operate on. And there’s no overarching rule that will tell you how to do that. That’s why it’s anxious. So as with anticipated existentialist use of that term.

Sean Murray 35:13
And I can relate to that. If you want to experience it, go out and start a business on your own. Put your own capital at risk, you know? Build something in the world, and put it out there, and you will feel anxious vigilance, no doubt. It will keep you, it will keep you up at night. I’m glad you brought up Adam Smith because we recently had Ryan Hanley on the podcast, and Ryan Hanley wrote a book called, Our Great Purpose, examining Adam Smith’s thoughts on what makes a flourishing life, and he talked about his two great books, The Wealth of Nations, but also The Theory of Moral Sentiments. And I was sort of thinking as I read your book that The Wealth of Nations deals a lot with the rational choice kind of decision making, but the Theory of Moral Sentiments, where Adam Smith talks about having sentiment for others, were that’s where the spontaneous mercy kind of decisions come up; the altruism; the decision within the–decisions we make within our family with our close community that can easily be rationalized, kind of come out of that world.

Richard Robb 36:13
As Adam Smith says, “Even the greatest ruffian, the most ha–hardened violator of the laws of society, is not altogether without principles in his nature, which interested with the fortunes of others.” I, I love that.

Sean Murray 36:27
He didn’t say that he had any principles. He said he wasn’t totally devoid of principles, right?

Richard Robb 36:32
Yeah, I, I like that, too.

Sean Murray 36:34
You know, another benefit of just understanding these two worlds The “for itself” and the “rational choice,” and having a greater awareness, which I feel like after reading your book I do is that I think some of the biggest decisions we make in life are in the “for itself” realm. Because they’re, again, they don’t–you just don’t have the variables, and I wanted to just put a quote out there, maybe have you react to it. This is Jeff Bezos, and he said, “All of my best decisions in business and in life have been made with heart and intuition, not analysis. When you can make a decision with analysis, you should do so. But it turns out in life that your most important decisions are always made with instinct, intuition, taste, and heart.” You think he’s talking about the “for itself” there?

Richard Robb 37:18
Not again, not necessarily. I think just the fact that he’s doing it with his gut is a necessary condition for “for itself,” but it’s not sufficient. We have the elephant and the pool player; I’m sure before he, he lets his gut take over, he has done some analysis, and he’s listened to some analysis, you know? But I think, I think there has to be the element of, yes, there is the element of “for itself” without a doubt; that maybe these, these two realms can be intermingled. It’s not a binary decision. So I think it could be could be some of both. Yes, of course, he can’t be just appealing to rules. If he could just appeal to rules and analysis, somebody would have figured it out already. You’re dealing with one time issues that haven’t come up before. And the factors that are mechanical can’t be where the opportunity is.

Sean Murray 38:10
You talk about the the world of investments. And if it was a rule, if you could use the rules, and just use rational choice and preferences, then it could–good investments should be easily replicated. And so therefore, if you’re going to earn above the market return, you’re going to return some kind of–earn some kind of alpha. You really need a “for itself” decision. You need something that’s going against conventional wisdom or that is going to free you; free your will to try something different, right?

Richard Robb 38:40
You know, I’m sitting here the conference room of my firm. Recently, I got on a business trip, and I came back, and I was meeting here with an investor. And the whiteboard was filled with equations. I turned my back these guys for a few days, and they become a bunch of mathematicians. You know, that’s not what we’re here for. Is what math can do is abstract each investment and each idea from particulars, and chip in, and deal with it in the way that it’s like all other similar incidents in the past. But ultimately, where we’re going to earn our keep is by engaging with what’s new and unique in each circumstance that doesn’t look like what came before. And by exercising our judgment that’s informed by experience, we just ran it through a process. Somebody would have figured it out by now; profits would have been arbitraged away. So at most the mathematics is going to be a tool that we use, but it can’t be the key tool.

Sean Murray 39:49
So in, in closing, as we go through life, and we’re thinking about our choices, and we’re making decisions, and we have a better understanding of, of this realm of this “rational choice,” but there’s also “for itself,” how can we take that awareness and really help ourselves lead to a more flourishing life; lead to better decision making or the life well lived?

Richard Robb 40:13
I have written this book about how I’ve done it for myself, and how this is–brought a kind of clarity to me that has helped me in, in my life as a spouse, as a parent, in business, as a teacher, in–as a subway rider in, in daily life. I think, you know, maybe it can help other people in similar ways. In a way, I think people who recognize that we’re largely rational creatures, but think that maybe we should be hundred percent something’s gone wrong, when we’re not. I think in a way, this strengthens rational choice ’cause it doesn’t have to explain absolutely everything. So yeah, it explains which apartment should I choose. Well, I’ve got to just look at all the different attributes of this one. See–figure out how much I value each one–the attributes of that one. Look at the rent. Look at the alternative use of money in my life, and make a rational decision. You try it any other way, you’re going to end up less well-off than you could have been. A lot of decisions fall into that realm. And if we can in a way strengthen our understanding the powers of rational choice if we don’t try to make it extended to every decision in the realm, where it just doesn’t belong; these kinds of “for itself” leaps of faith.

Sean Murray 41:29
It was a fascinating discussion. I appreciate you coming on The Good Life. Thank you, Richard Robb.

Richard Robb 41:38
Thank you, Sean.

Outro 41:38
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