People are driven to know the future. Among the abundant evidence for this is the “massive prediction industry, which is getting bigger all the time,” said Stephen Dubner, co-author of Freakonomics and co-host of Freakonomics radio at the Institute’s recent Investment Advisor Forum.

But, predicting the future in general is hard, and making predictions about events and behavior having to do with money is especially difficult because of people’s complicated relationships with money.

Further, people are vulnerable to a tendency to believe predictions and sometimes the more outlandish the prediction, the more credulous people become, said Dubner.

To illustrate this vulnerability, Dubner recounted how his son, at age 10, could not shake his belief in a prediction by the preacher Harold Camping that the world was going to end, even though Dubner marshaled the most authoritative evidence to the contrary from the prodigious scientist and inventor Nathan Myhrvold. Myhrvold’s lengthy treatise prepared especially for Dubner’s son on why the earth wouldn’t implode still did not shake the son’s fears. When the world did not end on the appointed day, Dubner’s son shrugged and remarked that the charlatan who had made the prediction should be shot.

But, Dubner pointed out, false prophets of any kind are rarely held accountable, and so wild predictions continue to be given credence. The anecdote also illustrates how powerful and tenacious fear is, one of the many factors that play into individuals’ often irrational relationship with money.

Among the many facets of our lives that elude prediction is how we will behave in various financial situations, say, if the stock market plummets in a week. When surveyed about this, people will respond in ways that will bear little resemblance to what they will actually do, noted Dubner.

“It’s hard to understand all the things that are influencing them,” he said.” There’s so much emotional turbulence around money. Decision-making can be irrational. Your job is to figure out why people respond the way they do and to what.”

Besides noting the difficulties of predicting where markets will go and how people will react as proof of the fallibility of prediction, Dubner cited efforts to predict what makes a successful CEO. Despite extensive research on the subject, including his own, no one has shown there to be an ingredient that reliably predicts success. Even what might seem to be the unassailable wisdom that you can’t be a high school dropout if you want to be CEO was disproven by Richard Branson, the founder of the Virgin Group.

Nevertheless, people keep coming up with theories, which keep being debunked: one needs to be a strategic thinker who thinks outside the box, but research shows those who focus on operations do better; boards need to hire new CEOs from outside the company, particularly in periods of significant change, but insiders have proved to be more effective.

We know that there’s “no secret sauce” in leadership and that “it’s unproven what makes a good leader. But books continue to come out all the time about what makes a successful leader,” added Dubner.

In the face of a question like this one that seems to defy answers or problems that defy solutions, Dubner suggested taking a lesson from Takeru Kobayashi, a renowned competitive eater. Kobayashi shattered world records, for example, in hotdog eating by dunking the buns in oily, warm water. That made it much easier to eat the buns and eliminated the need to spend time drinking water.

Lesson one to be learned is, when confronted with an intractable challenge, redefine the problem. In Kobayashi’s case, that meant reframing it from, “How can I eat a hot dog and bun as fast as possible and as many as possible?” to, “How can I make one hot dog and bun easier to eat?” Dubner observed. “And pay no attention to artificial barriers.”