Dan Ariely presents his latest work at BX2019

[Music] I would like to introduce our keynote speaker of the day professor Dan Ariely I've been really looking forward to this now for all the behavioral science geeks in the audience Dan probably doesn't need introducing but he is professor of psychology and behavioral economics at Duke University and it's best known for his work on irrationality and his many best-selling books including predictably irrational and the honest truth about dishonesty and of course some very very popular TED Talks along the way now I interviewed Dan a few years ago for the BBC and I've been putting into practice some advice he gave me during that interview which was never to pay a friend for a favor and that the moment you bring money into a situation like that when a favors are happening then they it starts to monetize it it starts to change their thinking and they start to think well you know is this a good deal for changing your tire for you perhaps it's perhaps it's not perhaps you should be paying more I could earn more money doing something else and his advice was instead to to give a gift afterwards now it's a win-win because actually the gift is usually they liked it better and the gift is usually cheaper than the amount of money you would have paid so that is that is one tip so I'm really looking forward to hearing what tips he might have for us today we're very excited because he's going to talk about some of his his more recent work which you may not have heard about so please welcome me in joining down [Applause] thanks a lot and good morning and before I before I start you might have noticed that I have half a beard you might have wondered why I didn't wake up late or lose a bet many years ago I was badly burned so most of my body is covered with scars including the right side of my face hence the half beard hey I say it in the beginning because somebody told me that unless I say what is half a beard is from people continuously think about why is this half a beard and don't focus on the top so now we've covered we've covered facial hair we move on and in general in life I have two hats I'm part of a group at the University at a Duke called the Center for advanced hindsight good name and we mostly study financial decision-making in health I'm also part of a group called Khaimah in Israel and it works exclusively with the Israeli government and today I want to say kind of two general things I want to tell you a little bit about our process of working how we think about now I want to give you examples from our work with the Israeli government that would illustrate different parts of this of this process so know we're all here for the same reason we want to think about how we use principles from social science behavior economics to design the world right I mean we want to understand why people do what they do but the ultimate goal is to change is to change behavior and why do we care about this because if we look at the world we can't look at it and be happy right and that's one of the things I think that is so unique to behavioral economics is in standard economics you look at the world and you say that's the outcome of about eight billion rational people that's what we can achieve in behavioral economics we say no no the world can be much better in fact this is the outcome of age building around irrational people making mistakes all the time and we can do so much better and if you think about this gap the gap between where we are and where we could have been it's very sad because we have things like we misuse our time and we misuse our money and we waste our health and we have hate and we don't have enough motivation in all kinds of things we waste the environment there's all kinds of really really sad things the good news is we can make progress right so I look at the glass half-full there's lots of room for improvement and we have the tools to try and think about how we reduce this gap between what we have and what we where we could be now when most people think about this challenge including many people in government's the usual answer is let's just give people information right if people are not doing the right thing let's just tell them right and people would immediately change but the sad reality is that giving people information almost never works and you can just think some examples like medication adherence we know information doesn't work exercise we know doesn't work I mean just think about yourself for a second how many people here in this room have not exercised enough in the last month smoking of course is one of those cases how many people here in this room in the last month of and not have eaten too much okay just a few more examples how many people in this room in the last month have at least once texted while driving okay so we have an honesty gap here let's let's try let's try a couple of more how many people here in the last month have not always wash your hands when you left the bathroom give you one last chance for honesty how many people here have ever ever not just the last month have had unplanned unprotected sex one one proud person the point the point is that for lots of things we know that information doesn't work right and we've tried it over and over and over and it's usually a good thing to try at some point the challenge is that in many cases it's the only thing that we try and were yet to discover places were purely giving people information really really works [Laughter] so it's not information then what so I want to kind of present to you a very very simple model of behavioral change it's a model that we all kind of use in some in some way and I think about it as a friction and whew we take a particular behavior and the first step we're looking at is to say what can we take away what is there about this process that is unneeded that is holding people holding people back the apples are a little too far away when the drawer in the refrigerator that holds fresh fruit and vegetables is a little too far and opaque hard to reach all kinds of little things that are that are in the way and then the second part which is much more complex by the way is to say and how do we add motivation right we have a particular behavior the behavior is about some long-term benefit right now it's not that exciting what kind of motivation we can add think about it like cooking we say what kind of spices can I add it's a much more creative complex process and many times we have to add motivation that have nothing to do with the particular activity we want kids to study we add exams it's not really the the important thing but we all of a sudden create a measurement when we create some competition and create other incentives that are irrelevant to the true nature of what we want people to do is to study but we add it now we want people to to lose weight and we add weight watchers' right we add some competition and a social embarrassment and other things like that and so that's the that's the the general model we'll start with and let's start with friction the things that are holding us back and in this particular case I'll give you one example we try to get people to take less cash from ATM machines why a cash has all kinds of negative things for society including funding terrorism but also not paying taxes so it's a good thing to try I and reduce the amount of cash and we looked at the system and the system has lots of places their ATMs themselves there's money that you pay into small businesses that you might be tempted to pay with cash rather than to pay with electronic payment and of course there's things like a credit cards and so on so you have ATMs you have receipts you have credit cards all of those things we've done experiments on all of them but right now I'll tell you a little bit about one experiment on ATMs and this is in Hebrew and this is not in Hebrew but the experiment was done in Israel in Hebrew and this is a just a general description of how an ATM looks like you go in you put your card you get lots of numbers you get to pick one and we tried lots of things one thing we tried was to take all of those numbers and make them smaller not just a regular anchor when you have one number but we said what if the whole set of numbers was regular whatever they they have in the beginning slightly lower or much lower we also decided to pick a default there's one button that has been pre-selected for you either four hundred shekels about a hundred pounds or two and fifty shekels and we also tried other things like we try to frighten people we said if people took over a certain amount we said you know just so you know we're writing down your name and the numbers of these bills and we'll keep it in our records until the bills show back up into into the banking system we didn't actually I mean we told them this we didn't really track the numbers you said ethical questions about experiment small set of scale experiments we just wanted to see if if it's if it's if it's worthwhile and we also changed the fees right right now there's a fee and if you think about the feet actually if it's a fixed fee gives people an incentive to take a lot of money because amortize their the fee so you're getting less so we said what if the fee had different levels it started with free or start with very small and then it went into went up so we tried lots of things here's the the final answer the winner had everything right the winner had default and anchoring small amounts of money we gave people the incentives and so on and it reduced the amount of money people took from six hundred thirty shekels writes about forty one for the pound to three hundred eighteen so we did we did a big gap but what you can see is that just anchoring and making a small default of two hundred fifty got you all the way there almost all the way there right how much of it was the financial incentives not that much how much of it was the frightening message about keeping track of the numbers not that much we could do a lot of the work just by changing the total numbers and picking a default of course financial incentives work by themselves but that was the first experiment very simple right take the interface for the ATM change multiple things see what works now we're ready to to roll it out okay and there are the things we've done we've done prize invoices right so we gave people incentives to ask for an official receipt because they could submit that and get prizes lots of things to say about that we also created a system where small businesses have a reputation that they can keep maintain and increase if they use electronic transactions and small businesses really wanted it the idea was that as they accumulate their reputation our version of the tax authority would be nicer to them if they ever found out that they make mistakes so you get to build reputation all of those things work okay so that's part one friction just think about what's the button change the default it change the numbers showing on the screen get people to think a little bit in a different way change the financial incentives all of those work fuel motivation this is a kind of an experiment that a lot of us in this room have been doing before people set up appointments to go and go to see a physician or have some exam and many of them don't show up and some for good reason some for bad reasons the bad reason is just not showing up the good reason is the by the time people get to the appointments sometimes they're healthy so you know then they shouldn't show up but lots of lots of people don't show up very bad for the system and there was this system before we came up that gave people reminders five days before send one reminder three days before send another reminder and the reminder was basically a very dry saying you have an appointment please show up or if you're not showing up tell us that you're not going to show up not showing up is fine right if people just told us we approached the system and change lots of things we we had the request from a person right rather than anonymous we said there's a person wanting that we said it's a national effort to try to reduce that we said most people show up social proof and we told them how much it would cost the medical system if they don't drop we said it's important for their family that they show up all kinds of things like that you know a selection of things that we thought could could work and the good news we ran this on about 160,000 people and the good news was that almost everything was better than the standard system by the way when you do these things sometimes you want like who designed that right it's so easy to do better like I did somebody actually put some thought into designing this this prompt and I was actually very happy that the thing that worked the best was saying that is another patient that could use your your system I don't know if this is unique to Israel or not right it's a question of solidarity in society and so on what would work the best but it was nice to find out that that was the the message that worked that worked the best we saved with this message about four hundred thousand waiting days in the country two small country so you know me was the big country it would be more and then we did something else we said look we need an RCT we send everybody the same message and we can find out I mean randomly we took we took eight groups everyone got the wrong message that's a good thing but we have lots of people can we start to analyze what kind of people react better to which messages we have the statistical improvement but which one so we created a very complex AI model that basically took into account everything we we knew about the people what clinic was it which part of the country and how often have they been in that clinic before have they been people who have been not responding in general like people who are kind of characteristically not showing up or do they have a good reputation for doing that and we said what else can we squeeze from the data if we got a system that tailored for each person the message that would fit them specifically and basically we got the situation where you reduce no-show from 21 percent rate to about 14 percent with the standard message I showed you somebody else could do it and we could get another reduction to two twelve and a half percent if we did kind of an AI personalization it's a couple of things here one is that the vast majority of the work everybody could get the same message right if you think about the big bulk of the improvement it was from using one message you could tweak a little bit more and get some other benefits certainly worthwhile doing why not but sometimes we say oh if we could just do the AI exercise we will get the best result I think both is like 8020 we could get much much better by getting the right message and then we can tweak around the edges and get a bit a bit more no reason not to do it but let's not put too much weight on on just that approach okay so that was friction and fuel let's change the default and so on and then the fuel is let's add motivation let's remind you that it costs people money that your family wants you to show up that your physician wants you to drop somebody else could use the the time in the appointment and let's see what motivates people to do something however and I have to say this was kind of a surprise for me as I left my regular lab research and started doing research in the field sometimes I'm realizing that we actually don't know where we're going you know when we design an experiment and we think about friction and fuel we need to know what the objective is but the reality is that there are many questions that the Israeli government poses to us that we find out that we're not really sure what the question is in what direction we we want to go and then we need to take a step back and say let's just collect data let's just start to understand what's really going on and this is becoming a bigger bigger part of our of our lives trying to understand what's the what's the setup where are we trying to go so in this case we decide to look at transportation and transportation a huge problem around the world as you as you know and we try to kind of even figure out what is the landscape what are the possibilities what kind of things can we do so we started by analyzing cellular data we planted anyway let's not talk about and we magically we magically got data from almost every citizen in the country about where they live in where they work and how they drive to school and they stop in a way to take their kids to work and do they have a bicycle and the dog and all kinds of things like that how consistent are their in their commute all kind of things like that and we started mapping and in this particular case we mapped one big industrial a part and high-tech a park where lots of people come in and leave to work and the first thing we mapped was the hours of the day and when was the peak how did the distribution of arrival happened and you know a traffic is a very nonlinear system right it's the the last 10% is creating in tremendous amount of damage on the whole on the whole system so of course you can see that 9 o'clock in the morning is a really terrible hour if you could just shift people a little bit up or down you could create a lot of a lot of benefit we also looked at when people leave slightly less concentrated but not a good pattern pattern either we didn't settle for this we also try to to figure out what are the types of vehicles because we have cellphone data so we don't know but so we we have cameras on the way in and out of that particular part and we analyze what kind of transportation people have lots of private cars a very few buses very few bicycles and so on we also looked at the purpose why people show up mostly it was work commuting okay then we could look at things like what's the distance from work and we found that about 5% of the people live 1.5 kilometers away from work that's not a lot of distance right if you could just convince those people and if you look at five kilometers it was 26% right this this kind of data by the a big surprise if you look at how governments in general in this case not just Israel planned transportation it's usually a guy with a pencil and a map that the drawers where public transportation is it was it's shocking how little data there is to to do these things but when you look at this data you start to understand there's lots of lots of benefit by understanding where people are we also use some drones to try and figure out a bigger range and where there are challenges you can see here the the map and the the junctions from all around and we try to figure out how does the congestion happen on those is there a particular Junction that is the cause to this is this something about a traffic light that are causing that are causing the the challenge analyze those drones the these images images as well and it is true that when you look at an area a lot of time the congestion is happening outside of the area it's just a ripple effect okay then the next thing we did was we try to figure out a per anonymous resident what are their potential of using public transportation right so we basically simulated and we say it's those people if each person that we have in our database wanted to take public transportation or bus or walking or taking a bicycle what is your potential for doing this and we mapped in this case only a small part of the country by saying what is the potential for current public transportation and we saw that there's a lot of people who have this potential but they're not doing it those are only people who are driving and we wanted to see do they have even a potential of using public transportation by the way public transportation in Israel is not so good very much unlike London for example but even though it's not so good we felt there's a lot of potential for people to take it because as you'll see people's perception of how terrible it is people perceive it could be much worse than it really is okay so we have several data we have drones we have this public transportation fit analysis and now it's time to figure out can we do some experiments and move behavior we felt it as a potential right that was the first thing you know can people even take public transportation what is the potential now we can start doing experiments so the first thing we did was we said what's the high potential the green dots I showed you before and it turns out there's a huge potential for the green dots is these pretend to take people who are currently driving a car to move to transportation we also did we simulated the following question we said imagine that we would approach people who are living next to each other and driving almost every day to the same place and coming back to the same place that we did kind of a matching approach what is the probability that we will find two people who live up to a kilometer away from each other leave to work and back 15 minutes apart from each other and go to work and back at the same time if we could do that from privacy perspective and so on the potential is about 90% of the people so about 90% of the people we could find a match and match like this which is which is quite quite incredible but tells you these are solvable problems we just need to get the data and start working on it okay so there's a high potential for public transportation biking or walking there were 33 percent of the people that we felt with some effort could get there but even if we could only take 16 percent of the cars out of the road that's a lot that's a lot it's a you can't recognize the system that takes ten percent of the cars out so we tried lots of things we try the system where we encourage businesses and individuals to work flexible hours which means to stay home one day and work from home or live a little later come back earlier and lots of advantages there we tried what we call a personal commuting plan which I'll tell you a bit more about and then we tried some financial incentives personal commuting we did it with one company and we basically set not we but we got consultants to sit with each of the employees and create for them an opportunity map of what else they could do and you know we the question was do people even know what is what are their alternatives it turns out people had no idea what their alternatives are we think people know but they didn't and most people got an idea of what they could do instead and and what we showed is that 63% of them have tried alternative commuting plans during the trial during a few months of the of the trial and we also paid them during the trial 38% of those kept on doing it six months after we ended the trial right so we had a couple of months of a trial in which we incentivize people to use other paths 38% of them kept on doing it for six months afterward and seventy six were either satisfied or very satisfied with their other with their other options so so it does mean that there are other options we just need to help people identify them we also try to pay people not to enter there not to enter the city and paying people not to enter the city in rush hour is an effective mechanism and then we did another experiment on framing so we tried to figure out what happens with loss aversion what happened if we prepay people and you can see this in yellow paying in advance works better than paying later lower numbers here are better on this graph and we also compared framing what happens if we give the money in cash what happens if we give it for saving plan for their kids for college and what happens if we just give them discounts on license fees for the car it turns out the best approach was to give them discount on license fees for the car and paying in advance saying if you don't do it you'll have to give the money back and with this approach we could incentivize people in the best way not to use their their cause now working on other things like that including congestion attacks okay so we talked about friction fuel and then that sometimes we just need to put a serious effort to understand what is actually going on before we can even propose any intervention the next thing that we think about the process is to say in how and then how do we scale right a lot of time we start with small experiments but the reality is that if they end up being complex experiments that we can't scale that's not our goal to change to change policy so we try to figure out how do we scale and specifically we are trying to figure out what do we do with with technology to scale our solutions in this in this particular project we were trying to get more kids particularly more young women to study the things that would allow them to be scientists and particularly computer scientists down the road every country more once more science technology Israel is no exception there's a big gender gap we try to both fix the gender gap and increase the number in general and we started with a survey that asked young women and young men why they're not studying computer science the most standard answer we got was it's too difficult and there was a big gap between what girls answered in what boys answered on that on that particularly it makes sense that that might be the difference now and we'll come back to this we then look at the process a kids choose a major in high school then they choose an academic degree then they choose a career the next part of intervention that we tried to catch was the place where people choose an academic degree so you there's an academic degree you go to what you want to study University there's a website you get to choose we try to intervene at that particular point with absolutely no no success most likely because it was too late right it's true that people came to the website to choose but they probably chose before they were not really choosing they were just executing the choice so we said okay let's go earlier let's try and attack it when people choose a major for high school and actually this was a nice story of failure and when when we started there's a lot of things like computer science light courses I'm sure you have them in in every country where you say oh let's just give them a three or six-week long computer science slide class and at the end of it everybody would want to be a computer scientist and and the very nice people from the government said why don't you help us digitize this so right now it's very manpower insane intensive why don't you digitize that course we can give it a scale to everybody we said fine but let's first check that it works so we we took the best class we could find and we did that before after evaluation with a control group people who studied neuroscience instead of computer science and and what do you think happened actually you could see it here and slide what happened was that it had no benefit for the boys and it's make made the girls less likely to want to study computer science and by the way this is the thing that everybody does Google Microsoft everybody does those classes so I just nobody bothered to ever evaluate them but we also had such a strong intuition that has to be wrong that we repeated the experiment really the externally the same results doesn't do anything for boys make it less likely for girls now this was a tough process because we didn't know we even were to start to figure out why it doesn't work but it took us a while and then we figure out we figure out at the end of those three to six weeks of computer science light the girls knew that they could do it but they thought it was unbelievably boring right because what happened in the first three to six weeks of computer science light is you learn how to move a turtle on the screen and and at the end of this the girl said yes whoo I can do it but who wants to do it for a living like you know what what kind of work is this the boys didn't mind too much it was sufficiently you know it was just like a another computer game it like but but I I think they were just not thinking about purpose and meaning and so on of what do we actually try to achieve so anyway so instead we did something else we run around the country and we filmed young people but particularly a young women who are doing computer science and something computer science and technology computer science and design computer science and health computer science and education and what we did was we created a website with the kids got to choose what they want to study in high school but through that website they had to see these professions and the idea was that the barrier here was not a barrier I can't do it the barrier was what do I want to do anyway we we did this a major selection a website we filmed the day in the life of all kinds of people particularly young young women and we increased the number of people who by about 20% day a number of P of particularly boys but even more with girls who chose to study things that could qualify them to be to be computer scientist down the line I mean there's still lots lots of ways and there are many more intervention points that we need to go through but it's a starting point it seems to be it seems to be good I want to mention one more part for our process right so we say figure out the data friction fuel scale sometimes there are very complex trade-offs to make as a social scientist and the trade-offs are because we actually expand the scope of dimensionality of what are we thinking about is our objective in this particular case and we're trying to increase tax compliance and think about tax compliance you can frighten people you can tell them what the government is doing for them you can try and get them to feel this reciprocation there's all kinds of ways to do it and the thing about it is that we need to think about not just how do we get more taxes which is a very proximal simple measure but we also have to think about what are the attitudes of the people that we're dealing with what is their sense of where what is their role in the country so we're trying to you know if you if you're trying to get people to use less cash relatively simple if you're trying to get people to pay taxes you have to think about how do they think about themselves as citizens if we just frighten them and even if we get them to pay more taxes is this the the right objective function so what we're trying to do now is to also think about expanding the scope thinking about more dimensions of our interventions and thinking about how do we trade them off we're moving into more complex area but that's what we're doing and in this particular case I told you we're trying to do things on on tax evasion and we're trying to think about you know well-being trust of the government we're trying to think about things like how people view their role in society and we're doing things like sending people pamphlets that tell them what the government does with their taxes we're doing things that try to increase trust in the in the text a authority and measuring those other dimensions as well and and it actually creates a situation where there's no real right answer at some point you have to trade off goodwill toward the government versus more taxes how do we how do we make those those decisions but it's something that we need to enter to the discussion and I think it's our role because some of the other measures are very simple just more money no let's think about some other dimensions and complex and complex trade-offs and finally in many ways we need to recognize that we need to keep on retesting things you know the world of physics is is rather simple like you know physics has now changed for many many years you learn something in physics it stays for us things change all the time the world before Facebook is a different world than the world after Facebook and if right now text messages work better than sending people letters it doesn't mean that it will stay like this because it could be that it's a matter of attention people spend more attention to text messages less to letters maybe in five years it would be it would be different if we think about what professions kids and particularly young women find meaningful maybe that would change as well so so in our world we need to I think very very much about what are the kind of things that are going to change and we need to realize that this is something we need to to work on and there's a fear I think that we give governments a solution and governments will implement that solution and will not consider changing it down down the line and it's our job to think about under what conditions do we need to do continuous continuous but you know every few years to go back and change and make sure that we're on the right on the right path so this is our kind of general process discovering sometimes we don't need it friction and fuel I think we all need it scale almost all the time trade-offs expanding the scope and then we test retest when we need it I do want to mention that friction is not always bad sometimes we just say but for example this is my email I went to a conference and they asked me to put my email I said I don't really don't want to and they said you have to you have to so these are the first hundred and some characters from The Hitchhiker's Guide to the galaxy good sorting mechanism you know if you think about what we've achieved over the last 300 years or so as as humanity we've achieved tremendous things right it's it's it's amazing look at this wonderful wonderful room we have lights and we have air conditioning and we have microphones and we have seats and on each of those things we collectively have worked tremendously just think about the chair it has arms and legs and it has cushion just like even little things like a bun is slightly sensitive so we make the cushion there exactly right and and you walk in London and what an amazing city what what an amazing structure and we have invested so much in the physical infrastructure of our lives and I think it's because it's so easy for us to see we're not Superman right so we have Superman can fly we can't we say let's invent planes and then Superman can run very fast we can't let's get cars and Superman can sit for a long time we can't let's have a cushion and you know and and everything that our fragile body is not able to do we create technology to do it and we kind of wrap ourselves with technology and we we didn't come with a perspective of saying let's change humanity like let's be called resistance know let's build heaters and let's get better clothes and so on let's make ourselves you know being able to have run faster no not going to work let's get cars and and if you think about it we've spent so much of our time and effort and so on improving creating a an infrastructure for our limited physical ability what about our mind people have made lots of jokes about brexit but you know it's a it's it's hard not to write you you sit you look at this amazing city and you say almost everything that is physical has been done here in an amazing way public transportation pedestrian crossing the design of the light cross and don't cross things are everything like it's an amazing city and then you look at the cognitive capacity to make decisions and and what what are the tools what are the tools for our minds right what are the tools that we're making for mindin and how important those are and and I think we have this thing where in the physical world we see our limitations so clearly it's very hard to avoid it in the mind I think it's much easier to keep the illusion that we're all knowing all able and capable and we're not building the same the same tools but those tools are just as important and I'll give you one very simple example think about credit cards what do credit cards is a tool for payment get us to do there's something called the pain of pain and the pain of pain is the idea that when we spend money we feel differently depending on the payment method that we use so imagine tonight you're going to dinner imagine it's going to be 100 pounds and you paying with cash or with credit card which one is going to feel worse okay why imagine if I owned a restaurant and I figure out the people on average eat hundred bytes and pay a hundred pounds and I came to you and I said because you're such a wonderful person I'll give you a discount it will be half a pound per bite and not only that I'll only charge you for the bite you eat the bites you don't eat you don't need to pay and I'll serve you your dish I'll sit back and every time you take a bite or mark a little view on my notebook and at the end of the meal I'll charge you half a pound for every bite you take only for the bites you take how much fun will that meal be not so much sometimes when I teach about the psychology of money I bring pizza and I charge the students 25 cents per bite what do you think happens huge bites [Laughter] and you might think all the students would learn right they will take one big bite they'll figure out it's not a good way to eat pizza no they don't they sit there with the pizza and they push just a little bit too much at the end of the process it's very cheap but very unpleasant but the temptation is very important now the pain of paying is this thing that says that if we pay and consume at the same time something very different happens to our consumption so what do we do with credit cards are they a good tool or not-so-good to credit cards take away the pain of paying from us are we doing better not so much so we compared what happens with credit cards to prepaid debit imagine that you want to spend let's say a thousand pounds a month on discretionary spending restaurants taxi and so on if it's on the credit card people spend more if it's on a prepaid debit card people spend more in line with their budget but we don't have to stop there what do you think is better to do a thousand pounds a month or 250 pounds a week turns out a week is a better tool why if you get a thousand pounds a month in the beginning say wow I'm rich and people were overspent if it's for week it's better we see their day horizon we see the opportunity cost and then what is better is it better to load the card with money on Monday on Friday better on Monday what happens when we load on Friday the weekend we end up overspending if we load on Monday we anticipate the weekend we saver we wait for it and then on the weekend if we overspend we can more easily go up and down so the point is that there's lots of things like that you know there's lots of things where we can take the analogy of doing things in a physical world for every small nuance and we can think about what are the tools for their mind how do we get people to be slightly healthier how do we get people do men time's likely but how do we get people to think more about the environment how do you improve motivations all of those are are possible we just need to start realizing the cognitive limitation alongside our physical limitations the final point I want to make is something about the field I think that a lot of what we've done not exclusively but a lot of what we've done they are small tweaks and we take systems that people give us a forum SMS something like that and we say what are small things that we could do to improve it and there's lots of great improvement to do it's it's very interesting it's a academically satisfying and it moves the needle however as I'm doing more and more with technology for transportation for helping people making choices for improving the engagement of civil servants all kinds of things like that I'm getting to realize more and more that we need to get into the design of tools we can't just be given tools and say let's do tweaks we need to actually design design the tool and and from that perspective I have a call for action and we at Khaimah really want to design those tools and if you're interested in joining us what I'm envisioning is that people from all kinds of units can come I'm hoping we will meet once a year I hope that once you will think together about what tools would we all collectively want want to build and then we'll build them and I'm five seconds over and thank you very much [Applause] five seconds over that's very impressive indeed you've set the bar high for the rest of the day there I must say thank you so much for that you've covered so much I mean an astonishing amount there and an astonishing amount of new work how many people do you have working in your in your lab or do you never sleep both both so so it Duke we're about 45 people mostly working on applied projects mostly with sponsors and it came our way about 25 and half computer scientists designers have social scientists and it sounds as though in a way you know you're getting more and more ambitious with the scale of things that you're trying to do from small tweaks in wording to too much bigger things like you know trying to get people to change the way they commute or change their working hours as big things are you impatient to make even bigger changes like you were saying there it sort of sounds like that so yes but but I'm also I really gamble with my time so I get a lot of requests from all kinds of places and I often try things often often things fail but but sometimes they succeed and I'm looking for a weak point in the system where somebody is willing to try something different so I'll give you an example in Israel not too long ago there was a budget that was giving people with disability a bigger budget and and I thought this is an opportunity right is it going to be a bigger budget let's figure out what's the right way to give this this big budget and there was there was a study about two explosions that happen one in Belgium one in Holland about ten years ago and and what the study showed was that the Dutch were fine and the Belgians were depressed PTSD not incorporated into into the world and and when they looked into it they were both big explosion with lots of people injured burned and and what they found was that in Holland it was a small community so everybody knew that people were injured and they just went back into the world whereas in Belgium it happened in a train station people basically went to their community they didn't have the social support and and it turns out to be very important that you know if I think about my own experiences being injured you know you you live your life you're quite happy and then you get injured and life quality goes down deeply and then at some point you kind of manage to to get slightly better and then they say now go out to the world it's it's a it's a deep reduction in quality of life when I started going out I had these pressure bandages all over my body I had a mask you could only see my my eyes and ears and it was it was hot and I looked strange it was very tough to to get out to the world it happens to everybody with an injury right all of a sudden you discover all the things you can't do and you get strange looks it's an unpleasant thing but if you don't do it the long term it's going to be much more challenging and if we get people to go out of the world yes they're going to suffer for a while but eventually it will get better so I very much tried to convince the Minister of Finance that the right the right way to give more money is to incentivize people to get out to the world and I failed you know political pressures don't always work for us but but I have now where a plan in the draw and I just need to wait for another election and somebody else so so I'm I'm impatient but but I also think that that good science and reasoning will prevail I I don't know much about the the British civil service I mean I listen to Yes Minister and you know I know I know that I know the basics but but what I was so impressed what I was so impressed with with that series and also David when we made gasps Oh Donald yeah when is is that the civil servants in that show and I think in reality have more patience than the politicians and and I think scientists needs to be like this as well so we need to say okay you know at the end of the day what policy will be accepted is also a question of political mood and who exactly is there but we can we can do our work and be ready for that for that time now I want to put some of the audience questions to you that are coming in on slide oh and if people want to put them in then the it's d26 five is this particular event to see some of these so could we have the slider questions no it's there what's this fat guy doing on the stage yeah we deleted all the rows actually which which I'm hoping we can have a slider questions up I'll ask you another question in the mean time which is that I noticed that you said near the beginning you wish that people would put some a bit more thought into the the wording they use say in texts for appointments it was when you were talking about doctor's appointments and that even for those tech prompts they should put some more thought into it but then wouldn't they rely on their own intuition and get it wrong if they did do that because we know always what I tell me about what happens so there's this way to get it wrong and and but I don't think they could do worse than than what they've done originally so you know I think that in many cases you can't get it in the best way like you know there's lots of intuitions about you know should we use social proof should we use financial incentives but the thing that we saw was that we couldn't get worse then than what they did so so do I think that people who have not read anything about social science could get the right approach just my intuition no but that that level was so functional he had nothing motivating so I think that yeah fair enough so we've got lots of lots of questions I like this one what is the most effective intervention that you've found to work in most of the experiments you've tried so it's a it's an easy question in some sense because forcing people to do things is the easiest I'll give you an example we created an app but use atomic Gucci's like a turtle and we give it to patients and the turtle is happy as long as people exercise take their medications in eat well and the turtle becomes less and less happy as as people don't and we tested this turtle and it has a very small effect it doesn't do much you know people care but not care that much so then we gave our turtle superpowers and we gave them we gave the turtle the ability to delete other apps from the phone so this is angry turtle as the turtle becomes angry as apps disappear from the phone and and the first apps that go are the things that people use most frequently they come back every night and you get to lose them again every day we give this to people who had heart surgery and we say look right now you think to yourself that you'll exercise eat well and take your medication but we know that in three weeks that will stop so let us install this app on your phone you could never delete our app but it will force you to behave better and most people take this on it really helps because it's such a severe heart condition we can actually measure death mortality rate so you know these things are on the scale of where do we stand morally on on paternalism it's a very tough very tough place place to be but very effective now here's an interesting one instead of nudging trying to nudge individuals to do things have you ever tried to nudge politicians or governments to do their job well and to focus on the welfare of everybody so I feel a little bit bad that we're recording this right so this will be online so so one of the things I've learned by by working with with politicians is that there's lots of you know it's not oiling the system in some way right so we know for example that people love their own yes right people have their own ideas we have lots of research on that in one piece of research we gave people 50 words and we say use those 50 words to come up with an idea to solve world hunger and people come with the same idea because we gave them the words there's not really that many options but the moment they go through this exercise they think the idea is amazing it's more likely to work people should volunteer they're willing to give more money to it people are people you know the the process by which we socialize what we're doing and the process by which we attributed credit and I think it's one of those things that you know I'm new to this relatively to to the b8e group but but I find that a lot of what we do is like is like that I'll give you one story's an example the Ministry of Finance asked us to find out how to figure out pensions for people in the military right people in the military used to retire it in early age because military people used to run and it 42 they would retire they still can retire at 42 but now their longevity is much higher and pensions are very expensive so we did a little online survey like we will all do right what would you prefer a hundred more dollars now or 20 more dollars every month and so on we put the study online and we get a few hundred responses from people in there in the military and five minutes later the military shuts us down there's a text message goes to everybody says don't respond to this okay what do we do we buy iPads and we go and just before the weekend two different train stations and restaurants and places where soldiers hang out and we collect data we say you know we're not going to be around it will take them longer to shut us down and indeed it took them longer to shut us down we got a few thousand responses then we get a call from the head of the military saying we need to talk so we have coffee and and a lot a lot of the topic had to do with creating trust he says what are you doing you're testing something about me I said look I'm just here to help let me help you I mean you you won't help I want to help let's let's do work together and this was about three months ago and and I find that I spend a lot of my time on on trust building it's it's very tough and and we've actually created this situation like I would be interested in this discussion at some point we're a non-government entity we're private company and and I find that we are able to do things across government branches that we couldn't do if we were in the government so this branch of the government gives us things and this is sometimes they're not willing for us to share the information across government branches but they all trust us but the process of creating trust and willingness is unbelievably complex and certainly a big part of what we need to do so and how do we how do we do that how do we create reputation and how do we socialize ideas all of those things are incredibly important what kind of pilots can we do to get people to buy to buy and one of the things we find it works really well is go into a government bill office and a government office that kind of questions whether you're going to do something and it's going to work and change the prices in the cafeteria for a week and show them how many more people show up or don't show up and now they'll be convinced that small tweaks really work right you offer free coffee offer some people show up now you have a good starting point and here's another question how do you take into account the ethics in your studies what kind of ethical screening do you do of what you're doing yeah that's that's very tough you know I've been studying ethics for a long time dishonesty and I know that when we have a conflicts of interest we're going to see the world through this conflicts of interest the only thing we do is we have serious discussion about this and we try to do it cost-benefit analysis of let's be clear about how many people this would help how many people not we also created a calculator for ourselves about what level of paternalism do we feel comfortable with so for example in situations where we feel that there's more symmetry of information in the marketplace physicians versus patients in the situations where we think people don't have a chance to learn themselves like if you think about the the turtle story not if you get a second heart attack I mean there's no opportunity much opportunity for learning so we actually try to create a rigorous process of saying what is the level of under what conditions would be willing to do be paternalistic and then on the other side we try to be very clear about the cost of benefit how many people would suffer how many people would benefit to to what degree it's a discussion that we have we have to keep on having there's not going to be a solution and as we move forward it will become more and more difficult to figure out there's some low-hanging fruit there's no question like people out taxes they should pay taxes but but there are many many more complex issues and there's no other way but but having deep discussions about that there's not going to be simple rules of how to deal with that and somebody asks how do we deal with people being diverse and showing different irrational behavior particularly in an increasingly polarized world yeah so that's that's part of the the question of the cost-benefit analysis and you know part of it is simple like saying you know different people react differently to different messages right like in the example of no showing for medical exam you say some people care about society some people care about an individual patient that's easy I think the more the more complex one comes when people have a different ideology about end-of-life or people have a very different ideology about vaccinations what do we do there and that's that's what the ethics the ethics is becoming very complex like to attics to what extent here's the thing that the more we study irrationality less we respect people's declared opinions in some sense right we're basically all in the business of saying people don't know and don't act in their own best interest it's a very difficult moral position to put ourselves in but ignoring this data and saying what people know is also morally very dubious actually even more morally dubious so I think we need to remember our basic assumption that comes from lots of research and we just need to figure out that that we're doing doing our best and one final question before we break you you said you wanted to do more and more ambitious things and bigger things and one of these questions here I think is would fit in with that someone says someone from the Middle East do you think it's possible but you could try to use this type of work to try to reduce violence to try to do something really big I think so so first of all on the personal level I go to every time I get invited to visit the Muslim country I go and not too long ago I've been to Saudi Arabia a few times I was there a couple of months ago and it was kind of an amazing it's an Israeli Jewish guy I gave a one day of public talks one day of talking with people in the government it was kind of a heartwarming to see such reception right to think that I can be in Saudi Arabia and talk about work with the Israeli government tell Jewish jokes after that you know take selfies with women with burgers and and feel that we're all there to understand human nature that our foul ability is similar that some of our challenges are similar there's lots to share so I think that science behavioral economics changing society all of those things are potentially a really important really important glue so that's on one hand on on the other hand I I do think the question is about violence there's lots of very interesting pockets of lack of violence living together and having joint incentives and I do think that we could make progress sadly I think the political will makes it very hard but but I do think we I'm optimistic in general but there's also some specific examples that make me extra hopeful oh good extra hopeful we like that we like hope well thank you very much this has been amazing hearing your talk and fioor answers to your questions as well thank you for your questions dan we'll be signing books out there so do head out for a look at his books they're absolutely fantastic we are breaking for coffee until 10:45 and then you move to parallel sessions again like yesterday except that this time there are two parallel sessions before lunch and lunches at 1:15 today those of you who I don't see in these individual sessions I will see later on today when we all come back together thank you very much for everybody and particularly thank you very much [Music]

Channel: The Behavioural Insights Team

Views: 33,229

Rating: 4.8421054 out of 5

Keywords: behavioural economics, behavioral economics, behavioural science, dan ariely, bx2019, policy, policymaking, government

Id: Opjq1JT_dS8

Length: 67min 29sec (4049 seconds)

Published: Tue Oct 01 2019

Reddit Comments

[u/obviousoctopus]

I am watching and re-watching this talk and is becoming one of my favorites. There's so much useful information and Dan is such a fun speaker.

Wondering what you'll think of it.

The keynote is 45 min. long followed by an interview.

[u/Uranus1917]

Thank you for sharing!

[u/JohnCabot]

"I choose to look..." yeah why doesn't he do his keynote about that? The key secret none of these fake "gurus" will point out to you is awareness. Everything else is bullshit.