The second half of the book goes through confidence scheme after confidence scheme and explores the many principles that make them work. Unfortunately, it comes a bit of a sensory overload for those of us who would prefer to have the maximum three principles we are capable of remembering. Still, some of the principles manage to stick:
1. Each of us thinks of ourselves as exceptional (the Lake Wobegon Effect), elevating our supposed strengths and diminishing our hypothesized shortcomings. This heightens the chance any of us can be conned.
2. That same inflated exceptionalism works to avoid ever admitting that one’s been conned. “I wasn’t conned. I’m too smart to have been conned.” Anyone mention the fierce loyalty of Trump’s supporters?
3. Citing the work on the law of small numbers by the two cognitive psychologists featured in Michael Lewis’s most recent book, if you believe in the fallacy of the hot hand in basketball, you have fallen for a con. Not that players can’t sink quite a few shots in a row, or that a fund manager cannot have out-sized returns for a while, but to bet that their odds of prevailing on the next shot or next investment is better than the odds of a fair coin having come up heads for the past 10 flips coming up heads again, is just the kind of belief in good outcomes that enables con artists to be so successful.
4. Two principles you likely know—dissonance theory and the fallacy of the sunk cost—but likely never associated with cons clearly are. They explain in great measure how people re-write the history of choices they’ve made to try to avoid the clear fact that they have made a wrong decision.
5. The tenacious, yet faulty, belief that one has a viable exit strategy to protect against the down-side of a possible con, a lever that rarely if ever gets pulled—e.g., “I’ll sell if the stock/market drops 5%.”
6. If you think you’ve never been conned or can’t be, then you likely headed for the hills before the dot.com bust in 2000 and the housing bust in 2008. Put another way, there is no fundamental difference between a con and a bubble.
Bottom Line: Cons don’t work because people are too stupid to see the truth. Cons work because people want them to be the truth. They (we) want to be in a better place. And that explains what some people say might be the biggest and most prolific con of all—the promise of salvation and ever-lasting life, which all will agree is a con when practiced by money-grubbing pseudo-evangelists and their shady ministries or a brain-washing cult, but which some say is not a con when practiced by seemingly proper ministers and mainstream churches.
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