Tillman: What we're talking about is the cognitive state of being in the losses. He says if you buy a stock at 50, it goes up to 75 and it's now trading at 60. But on your actual physical ledger, I'm in the gains $10. On my mental account, I am in the losses $15 because I'm 15 short of 75 right? Tillman: It doesn't matter that I was up 10. If I only complete 13.1 miles in comparison in the context of a marathon, I am short. And as Richard Taylor points out, we do not like to close mental accounts in the losses."
Annie Duke is angry that quitting gets such a bad rap. Instead of our relentless focus on grit and "going for it," the former professional poker player, decision strategist, and author of Quit wants us to recognize the costs associated with sticking to a losing outcome. Listen as she explains to EconTalk host Russ Roberts how society's conflation of grit with character has made quitting unnecessarily hard, and why our desire for certainty harms our decision-making ability. Additional topics include the flawed mental accounting that makes us confuse wins for losses, what we can learn from ants, and the tragic story of how the refusal to quit cost 16 lives one terrible night at the top of Mt. Everest.