Hidden Forces

How Confidence Determines the Choices We Make | Peter Atwater

Mon Jul 24 2023

ConfidenceDecision-MakingVulnerabilityControlMapping ExperiencesSociety's SentimentPredatorsFlaws in Decision-MakingOverconfidenceUnderconfidence

Description

The episode explores the impact of confidence on decision-making and introduces the confidence quadrant framework. It discusses the relationship between confidence, vulnerability, and control, and how they influence our choices. The episode also delves into mapping experiences, understanding society's sentiment, and the role of confidence in decision-making. It highlights the dangers of extreme vulnerability and overconfidence, and provides insights on improving decision-making during overwhelming challenges.

Insights

Confidence as a Geography

Confidence can be visualized as a geography with different behaviors and preferences represented by different countries.

The Confidence Quadrant Framework

The Confidence Quadrant framework consists of certainty of the future and control over preparedness as its dimensions.

Mapping Experiences

Using the confidence quadrant to map experiences can provide valuable insights and help tailor content to listeners' needs.

Society's Sentiment and Confidence

Understanding society's sentiment is crucial in determining audience mood and how confidence levels amplify or dampen situational triggers.

Vulnerability and Decision-Making

Feeling vulnerable can lead to focusing on what's close and trusting fewer people, while high confidence can result in trusting the wrong people.

Predators and Vulnerability

Predators thrive when people are vulnerable and willing to follow someone who claims to have certainty.

Flaws in Decision-Making

Both being in the stress center and comfort zone have flaws in decision-making, such as relying on past events that no longer apply.

Perils of Overconfidence and Underconfidence

Both overconfidence and underconfidence have perils in decision-making, hindering future-oriented choices.

Understanding Society's Position

Applying the confidence quadrant framework helps understand society's position within the confidence quadrant and gauge social mood.

Improving Decision-Making

During overwhelming challenges, steps can be taken to alleviate symptoms and make better decisions.

Summary

Transcript

Introduction

00:00 - 07:40

Peter Atwater is a recognized expert on the impact of confidence on decision-making.
His book, 'The Confidence Map,' explores the hidden role of confidence in our choices.
Confidence plays a significant role in predicting events that are often described as unprecedented.
Peter introduces the confidence quadrant framework in his book.
The framework helps us understand how confidence influences our decisions.
In the second hour, Peter applies the framework to both the world at large and our personal lives.
He discusses managing crises and making better decisions when facing overwhelming challenges.
Access to the full conversation is available through Hidden Forces' premium feed.
Peter's interest in studying confidence was sparked during the 2008 financial crisis.
He observed people's choices and their impact on market movements.
Robert Prector's work on socio-nomics influenced Peter's perspective on decision-making and social mood.
Peter realized that how we feel drives what we do, rather than behavior causing changes in feelings.
'The Confidence Map' was written based on Peter's teaching experiences and feedback from students.
The book provides a framework for visualizing confidence as a geography with different locations representing different behaviors and preferences.

Understanding Confidence

07:11 - 15:26

Confidence can be seen as a geography, with different countries representing different behaviors and preferences.
The opposite of confidence is vulnerability, and the degree to which we feel invulnerable influences our choices.
Confidence does not have much in common with self-esteem or outward projections of confidence.
The appearance of confidence often involves confidence theater, where people pretend to exhibit extreme confidence.
Self-confidence and self-esteem are inward-focused concepts that are not as important as our feelings about the external world.
Vulnerability can be physical or emotional, depending on where we are in Maslow's hierarchy of needs.
The Confidence Quadrant framework consists of two dimensions: certainty of the future and control over one's preparedness for it.
To be confident, we need both feelings of certainty and control.

The Confidence Quadrant

14:56 - 22:40

Confidence can be understood through a two by two box chart with certainty on the x-axis and control on the y-axis.
The upper right box represents the comfort zone where we have feelings of both certainty and control.
The lower left-hand box is the stress center where uncertainty and powerlessness lead to anxiety and vulnerability.
Traumatic events occur when we are in the lower left-hand corner of the chart.
The lower right-hand corner is called the passenger seat, where we have certainty but no control.
The launch pad is an environment where we have control but no certainty, like making financial decisions or taking risks.
Confidence is subjective but can be mapped on an objective framework.

Mapping Experiences

22:13 - 29:11

Using the blank quadrant to map experiences can provide interesting insights.
An emergency room doctor drew a line between the stress center and comfort zone in their day.
ER doctors are focused on getting patients to the comfort zone quickly.
There are different quadrants for employees/leadership and customers.
As a podcast host, you are in the service business and aim to provide certainty to listeners.
The host's location in the confidence quadrant depends on familiarity with guest material.
Entrepreneurs often spend more time in the launchpad and need uncertainty.
Spending too much time in the comfort zone can lead to missed opportunities.
Understanding listeners' lives is important for tailoring content to their needs and preferences.

Society and Confidence

28:43 - 37:00

Understanding the sentiment of society is important in determining audience mood
Different audiences experience phenomena differently
Media we consume often affirms how we feel rather than leading us to feel a certain way
Confidence levels can amplify or dampen situational triggers
Triggers don't have to be significant, but can set off social movements
Horizon preferences are influenced by psychological distance and vulnerability
Proximity plays a role in protecting oneself and prioritizing relationships when vulnerable
Low confidence can lead to xenophobia and viewing differences as threats
In a crisis, immediate matters take priority over future considerations
Physical distance becomes less important when confidence is low and focus is on oneself here and now
As confidence rises, horizons broaden and become clearer
Level of confidence influences horizon preference and inclusiveness towards others

Vulnerability and Decision-Making

36:39 - 43:46

People who are naturally inclusive and comfortable with diversity tend to be explorers and have a futuristic mindset.
In the investment world, there is a present valuing of absolute certainty that gets priced into earnings forecasts.
Feeling vulnerable causes people to focus on what's close to them and trust fewer people.
High confidence can lead to trusting the wrong people and giving up control.
Predators thrive when people are vulnerable and willing to follow someone who claims to have certainty.
Extreme vulnerability triggers natural responses like fight, flight, freeze, follow, or 'fuck it'.
Being in the stress center can make people impulsive and emotional, seeking immediate relief.
Examples of con artists manipulating people in the stress center include Harvey Weinstein, the Catholic Church, and Hitler's rise in Germany.

Decision-Making and Confidence

43:21 - 50:29

Predators like Harvey Weinstein and the Catholic Church can scale their abusive behavior.
In vulnerable situations, we struggle to determine trustworthiness and who can help us.
Being in the stress center or comfort zone both have flaws in decision-making.
At the stress center, people make decisions based on past events that no longer apply.
Public reaction to nuclear disasters like Fukushima can impact perceptions of nuclear power.
Peak moments like mergers reflect euphoria and excessive risk-taking.
Extreme emotions at both ends hinder decision-making for the future.
Overconfidence and underconfidence both have perils in decision-making.
Sentiment analysis can help gauge social mood and confidence cycles.
Applying this framework helps understand society's position within the confidence quadrant.
Steps can be taken during overwhelming challenges to alleviate symptoms and make better decisions.