We all make mistakes, some big and some small.

Understanding how errors happen and how they can be managed is a critical element of good decision making. Whether in investing or everyday life.

In this bite-size episode of Decision Nerds, Paul Richards and I tackle this by examining the curious case of the ultra-marathon runner who got in a car. Getting in a car wasn’t the problem – the fact that it was in a race and that she took a podium position was. Several days later, she had to apologise and explain what had happened with all the grief, Twitter pile-ons and general angst that you might expect.

Was this a case of a cynical cheat getting caught, or an example of when environmental factors can lead to a poor decision that spirals out of control? Our take is that it’s probably the latter and we’d all do well to learn what we can from this unfortunate situation so that we can manage our own errors more effectively.
 
We discuss:

The crucial role of the decision environment – the impact of factors such as tiredness, anxiety, emotions etc.

Short-term, ‘in the moment’, thinking – how we often act to satisfy short-term needs and neglect the long-term costs of our choices.

The compounding effect – how small errors can become big problems.

Sharing the burden – how getting others involved quickly can make things easier, but why we might need strong incentives to do this.

Available through all your favourite pod places, or stream it here: