This podcast is about the psychology and economics around always trying to get ahead – to “beat the system.” It seems pretty obvious that so many of us want to get ahead, but there are many issues about how we think we *can* beat the system and the many reasons why we think we *should* beat the system.

Many of these issues relate to our understanding of risk, hindsight bias, as well as optimism bias (believing one is less likely to experience a negative event or to believe that an event will turn out better than an independent analysis would suggest). This podcast also introduces another team – “Survivorship bias” – which is a logical error of focusing only on the winners or survivors of a process while completely ignoring the failures or those who did not make it.

There are many examples of Survivorship bias, including how we attribute the success of businesses and entrepreneurs, how we look at celebrities, gambling, crypto, as well as the new phenomenon of prediction markets, where survivorship bias is effectively a key marketing strategy. 

The discussion also includes the sociology behind the belief that one should beat the system. 

In a system that people more and more think is rigged and corrupt from people at the top, everyone is given a greater incentive to beat the system themselves and essentially participate in such corruption. It is essentially a societal-wide Prisoners’ Dilemma. 

Key Terms Used

Black Swan Event, Cognitive Dissonance, Greater Fool Theory, Herd Mentality, Optimistic Bias, Risk, Selection Bias, Self-Fulfilling Prophecy, Survivorship Bias