Leigh Caldwell: cognitive economics, power of stories, how the mind consumes dreams and plans future actions

Ben Yeoh Chats

Leigh Caldwell is a cognitive economist. Leigh has done excellent work around the psychology of pricing and exploring how people consume intangible products with their mind. He has founded several software companies and is co-founder of the Irrational Agency.

We chatted on Leigh graduating from university at 18, what attracted him to the internet and wanting to start companies and what lead him to the path of psychology, behavioral economics and ultimately to cognitive economics.

How the question of “Why do we get so much of what's important to us from what is manufactured inside our heads?” inspired Leigh to understand more about the brain.

Leigh dicusses his ideas on why the human brain might have developed the mental tools that we have. We explore the idea of mental simulation, what the brain may be incentivised to do and how the brain may solve the challenge of planning for future action and deferred gratification.

Leigh discusses the idea of discounting the future, the challenge of long causality chains in our scenario thinking and how the ease of imagination may impact how we think of future actions.

Leigh explains his model exploring agency and choice, and the difficulties and limitations of models.

We discuss the power of stories, why narrative might work and the possible process of conditioning and deconditioning to story narratives. Why once a myth or pattern is embedded, it is so difficult to work around.

Leigh gives me some free consulting on how to price and sell sustainable investing products, how to use surveysand how a small company could do it themselves to an extent. We discuss utility theory and nudge economics.

We play over-rated/under-rated on: nudging, carbon tax, carbon labels, being a generalist, deliberative democracy; and Scottish Independence.

We end on current projects and Leigh’s life advice.

‘...storytelling is your voice going out there and hopefully having as big an impact as you want. But, story hearing is the other side of it. We should be listening to the stories of all the people around us, and the many people whose stories are not heard in society. By hearing those stories and understanding what underlies them, then we will be able to figure out what the right story is that we might then want to tell…”

Transcript/Video: https://www.thendobetter.com/investing/2022/7/21/leigh-caldwell-cognitive-economics-power-of-stories-how-the-mind-consumes-dreams-and-plans-future-actions-podcast