Dan Ariely: "The Upside of Irrationality"

so thank you very nice to be here actually just to share a good news so so predictably rationale was in the New York Times bestseller for a while now the paperback is on the New York Times bestseller list but today I got a call that also the upside of irrationality made the list so next week I'll have two books on that okay so let me tell you a couple of stories about irrationality and specifically I call this book the upside of irrationality with the idea that we don't always want to think of irrationality is being is being bad but good I think that two ways to think about kind of the positive side if your rationality one is that if we understand what people do wrong we can actually think about how to fix it that's the first stuff right if we just think people are rational we'll leave them alone but if we think they're doing something wrong we can think about how to fix it and the second thing is that there might be some cases in which we want to embrace your rationality that if we could cancel it and redesign human nature we might not want to do it and in fact you might not - we might want to get people to keep being irrational so I'll give you a story about each of those things so to start with I want to talk about today negative side of irrationality how we can fix it there were two sisters in North Carolina that were called the Delaney sisters and under 100 year birthday the youngest one when she was 100 they had a story with them in the New York Times and they asked him what is your secret for your longevity and they basically said we have two simple answers the first one is that we decided never to get married we didn't want a husband to drive us to an early grave some of you are nodding with understanding this is not the topic of the discussion the second thing they said was that they decided to never go into hospitals because when you go into hospitals you likely to get more diseases and turns out there they were correct and when I was in hospital I got one of those diseases I got I contracted the liver disease from a bad blood transfusion and you know it was bad enough to be in hospital in general it was kind of an added injury to get these liver disease from time to time my liver would flare up it would reject transplants I would have to delay treatments lots of bad things happen but they also didn't know what was the liver problem I was having they couldn't analyze they couldn't figure out what it was and about seven years later I was in grad school I had an inflammation I checked myself into hospital and they not only started treating me but they found out what it was it was appetite to see a particular version of hepatitis C and at that time there was a new experimental drug that were being tried to rapid artistical interferon and they asked me if I want to go on these injections and of course I did because who would want to die from liver cirrhosis right it sounds like an awful death and so they gave me these injections and for me this injection kind of symbolized the human condition the difficulty of our modern life and here was the issue I really didn't want to die from liver cirrhosis but each one of these injection basically guaranteed to me about 15 miserable hours as I imagined you have this injection you have to inject into your thigh and you know that in one hour you'll start experiencing 15 miserable hours headache vomiting shaking fever stuff like that nothing compared to dying from liver cirrhosis but certainly now if you think about this trade-off between something unpleasant now and maybe something good in the future we turns out we often make these mistakes we often focus on the present and kind of forego the future dramatically discount the future so think about it dieting really good for the future not so much fun now exercising not so exciting now good for the future saving not fun now good for the future safe sex not so good now good for the future all of those cases are cases where we have this trade-off and when we have these trade-offs we often fail kind of a standard question we we asked you to imagine I asked you for the following choice I said would you rather have a half a box of chocolate right now or a full box of chocolate in a week half a box of chocolate now a full box of chocolate in a week and imagine that I actually passed the chocolate around so it's not just hypothetical but you could look at the chocolate you could smell it you could feel it and you can get half of the now or wait another week under those conditions how many people he would wait an extra week when an extra half a box of chocolate okay few patients people and I assure you the number would be lower if you actually passed it around now imagine we push both choices in the future and we say what would you rather have a half a box of chocolate in a year or a full box of chocolate in a year in a week how many people now would wait the extra week for an extra half a box of chocolate I'm guessing everybody or because in the future were incredibly patient we have no problem we'll diet will exercise we'll take a medication on time in the future all is well but the problems we don't live in the future we live in the present so I had these injections and I gave it them to myself three times a week for a year and a half a very long miserable period and at the end of it first of all the good news that was there was no trace of the of the disease their treatment work it actually became FDA approved but the other thing that doctors told me was that I was the only patient they ever had they took the medication on time was a huge FDA protocol was the only patient that took the medication on time and the question is of course how could I do it do I have nerves of steel do I have better self-control than other people the lot of people who know me here and would tell you that that's not the case at all so what did I do the answer was die invented the trick for myself and my trick was that I love movies if I time I would love lots and lots of movies I don't have a lot of time so I don't watch movies but every Monday Wednesday and Friday which were injection day the way I would spend it is I would walk in the morning on the way to school I would go to a video store I would rent a few movies I really wanted to watch I would carry them in my backpack the whole day anticipating watching them and then when I got home in the evening I would put the movie in inject myself get the bucket to get the blanket I was already for the for the side effect and I would start watching the videos immediately I didn't wait to start feeling sick I was trying to take something and connect it to this negative thing now think about this way me and all the other patient should have been sufficiently motivated by wanting to have our liver healthy liver important side effects not so much movies less important but the reality is that because the liver was so much in the future it was drastically discounted he was not able to control my behavior now by using these movies did that really start caring about my liver no I substituted I cared about something else that was not as big not as important not as crucial but because it was immediate actually helped me control my behavior so we call this reward substitution with the idea that if we can't care about things for the right reasons maybe we can behave as if we care them for the wrong reasons and and the issue here is that if you understand why people can't care maybe you can come up with workarounds that will get people to behave as if they care so so let's take another problem let's think about global warming for a second from a psychological perspective if you wanted to create a problem people wouldn't care about right you would create global warming that's that's kind of the ultimate the ultimat combination and think about it has all the elements to create human apathy it's long in the future uncertain will happen to other people first we don't see any individual suffering right now and we don't see any trace of written anything we would do personally is a drop in the bucket right all of these forces are the forces that create human apathy and in global warming they all combine together so can you get people to care how can you get people to care about something is so difficult for us to care you maybe a few people maybe can get a few people to wake up in the morning with dramatic energy and feeling the today they need to fight global warming and all of those people are probably in this room but but the reality is that it's going to be incredibly hard incredibly expensive and it's unlikely to be successful so what can you do can you use rewards substitution maybe so here's an example think about the Toyota Prius when you have two Prius came there was an a similar car that was made by Honda with similar parameters with similar energy savings but it didn't look any different the Honda looked just like other car any other car and it wasn't very successful so what are the people who get Priuses what did they get out of it and I I'm proposing the following experiment this is just subjective data but when I Drive around and I see people with Priuses they look to me like they smile more than other people same thing and I think for good reasons right because they look at themselves and they say look at me I'm driving a Prius I'm a good person and not only that but other people can look at me and see what a wonderful person I am and that's reinforcing now are these people really waking up every morning and feeling an urgency about the environment or they getting some other utility out of the Prius which is something that complements their ego and help them do something it is good for the environment for other reasons this is not bad right I notice anything bad about Prius drivers I just want to say that they're doing it for other reasons as well now to look at this actually when you know people who drive Priuses are very different than people who drive you know f-150 trucks for example and so I went to get a group of my friends and my group of friends are basically homogeneous they're all kind of very very similar and and I have some Prius driving friends and some non Prius driving friends and I asked my Prius driving friend and my non Prius driving and what else have they done in their homes what else have they done to reduce energy consumption and what about insulating their attic or change the thermostat or replacing light bulbs and it turns out that among my friends there is no difference between those two populations the people who are doing it are doing it partially because they're good people but all my friends are good people but they're also doing it because it helps their ego now if you think about this is a general solution this rewards substitution it means it has lots of problems that we might be able to solve by tacking other incentives on top of that so let's go back for a second to medical compliance which we started with how do you get people to care about medical compliance so try to kind of think about the combination of multiple studies imagine a medication called human in coumadin is an anti stroke medication it's a relatively good anti stroke medication it reduces the chances of a second stroke from about 24% to 4% now under those conditions you would think that somebody who had a stroke would really take the medication all the time because who wants a second stroke compliance rate is about 60% and it's really bad because coumadin is a blood thinner it was actually invented originally as a rat poison so it's cheap also you don't have high R&D costs and because it's a blood thinner you want to take it regularly but people don't so people don't do it for the right reasons can we think about getting to do it for the wrong reasons so let's think for a second kind of together what other motivation could you tie to this that would get people to behave as if they care about their health and the secret the initial secret is that we're talking about having an internet-enabled pillbox so what we have now is a pillbox that every time you take your pill I know about it so now with this knowledge what else can we do to get people to behave as if they care about their health let's hear some suggestions yeah sorry social savant so you could get some reputation if you take your medication on time you get reputation very good what else chocolates okay some something else right you can you can you can coach the pills with chocolate or you can give them some other chocolate if they take the medication on time what else money what is a simple thing right we can pay them so imagine for example that we paid three people three dollars a day to take their pills on time what do you think would happen will they take it on time now it actually backfires slightly now what do you think will happen if we pay people a thousand dollars a day to take the pill on time we haven't run this experiment but we can we can assume that this will work quite well right sure sorry for in the thousand-dollar condition not so much in the three one right yeah okay so different forms of money so this is actually turning up to be a little tricky because when you give people money now they get something now when you discount future cost it's something about the future and because people discount it's actually less effective so actually that's that turns out to be a bit more tricky what else yeah okay so some some donation donation to you can make in very general ways that people don't care about oh you can make it in very clear way so for example you can show a picture of a kid in Africa that if you take your medication they will get food and if you don't they don't right that could be more more motivating Alma sorry once discount on their health insurance so so it could be something for the future again it's a future reward we think that oh for today as long as you take it yeah and so so there's an interesting question about giving reward that is contingent about doing it all the time so for example imagine I said I'm not going to charge you anything for health insurance as long as you take your pill every day and you miss once I start charging for health insurance that can backfire because if you miss a drug once you might say hey I might as well you know stop doing it and in do it but you can think about some sequential rewards what else nobody mentioned calling your mother your kids you know getting in to harass you but let's focus for a second on money because money is really relatively easy to do so I said already that if you give people $3 it doesn't seem to help and we think that if we give people a thousand dollars it would help so now the question is how can you take three dollars and make it feel like it's more sorry take it away okay great so it turns out is this principle of loss aversion which is that people hate losing more than they enjoy gaining right and everybody who's looked at their portfolio over the last few years know exactly what this means right you open your portfolio you realize you lost 5% it's a really miserable day you see you won 5% yeah it's okay so it turns out that even if we prepay people we bring people to a three-months trial we prepaid in 100 dollars and we say every day you don't take your pill we'll take it back from you really works very nicely right people really hate losing now it turns out that that's not enough it doesn't really get everybody and and in an experiment by Kevin volp in George Long's and they tried two other things which were kind of curious one is that it turns out that people are suckers for Therese an economist called lottery taxation and stupidity and there's actually a beautiful and Dilbert in which a dogbert a sells discounted lottery ticket remember this and he says these lottery tickets are only 0.000000 or one percent chance less than the regular one and they're half price and Dilbert and your butt buys the ticket and then you said hey but this is for last week's lottery so that's exactly the point so so imagine but instead of giving you three dollars for sure I gave you a lottery ticket that was worth ten percent chance of making $30 that's already more interesting right turns out more people take it but turns out again it's not enough so that the curious word that an Isis version of this experiment was also with the introduction of regrets now think about regret for a second regret is a really interesting emotion because it's about not where we are but it's about where we could have been imagine that you missed your flight by two minutes over two hours when would you be more upset ten minutes why you're stuck at O'Hare for the same amount there's no difference in your physical well-being but you can imagine you could have made it in fact they're multiples because if only I did this so only I did this each of fun those things would have got me there on time where isn't it to our condition you have to say I should have done this and this and this and it's very hard to think that all of those things would happen in the previous Olympic they took pictures who of people who want the medals and they analyzed how big their smile was right and what would you expect girl to smile the mouth silver and bronze the gold people did smile the most but the silver and bronze were reversed why because what is the silver person thinking this close I was this this close a Seinfeld had a line that he said the guy who wins the silver is the first loser and and what and what is the bronze person thinking at least I got something right least I'm I mean this I'm not in the other group so it turns out even in this case our happiness is determined by how easy it is for us to imagine alternative reality now let's think about how do we take regret and add it to our lottery experiment imagine all of your taking Coumadin and the people sitting on my right are taking it on time and if we did things without regret I would give you from time to time a lottery ticket and you will win the lottery but if we try to include regret I give a lottery ticket to everybody whether you took your medication or not and from time to time I call you up and say congratulations it's your lucky day or the winner of the coveted lottery bless the stars sadly I see you didn't take your pill today so you're not getting the money this is the essence of regret I could have done something really small that would have made me feel very differently right now what happens 97% of the people take the medication on time after this experience so the point is that if we understand where we fail like in medical compliance and we understand how we can overcome it we can actually build systems that do that now can we get people to really care about their own health maybe not but maybe we could co-opt other things we can get them to care about money a lot the reason we can tell them to cure but regret and there's no reason to stop there and using those things to get people to behave better and taking human is good for everybody it's good for the patient's good for the family it's good to the health care system everybody everybody wins so that's kind of the first the first type of good things about being understanding irrationality the second story I want to tell you is about the story where we really need to think very carefully about whether we want people to be perfectly rational or not so I want to tell you something about what's called the identifiable victim effect and the basic story is you remember baby Jessica who fell to the well and hand miserable couple of days and her parents I'm sure all very miserable it turns out that she got more CNN coverage and Rwandan The Fool put together right then we can ask yourself why why why does he get so much coverage it turns out that that's probably the one topic that the Joseph Stalin and mother Teresa agreed on and Stalin said one death is a tragedy and million is a statistic and mother Teresa said if I look at the masses I will never act if I look at the one I will which is the same principle that perhaps we care about individuals but we don't care much so much about big tragedies when something becomes too big we actually stop caring we don't care proportional to the size of the tragedy but as the tragedy become bigger we seem to somehow mute our caring so imagine an experiment in which I describe to you a little girl called Rukia described you to her in in depth in how sick she is and how much he doesn't have food and how much your particular donation could help her and so on and then I say and how much of your income would you give to this little girl and people you know give a particular amount of money or imagine a second condition in which I don't describe Rokia but I describe the problem of starvation in Malawi in general and I said there two and a half million kids with this condition and described you statistically or the problem it's clearly bigger clearly more important your money could go much further but what do you think happens do people give more money no people give much less they give about half as much so what happens here when we give people more information and we tapped their ability to think rather than ability to feel people care less it actually gets worse because if we take Rokia and we describe her in all her individual glory and say by the way she's not alone there are other people like her in fact that two and a half million kids like her in Malawi what happens now do we get the benefit of emotion plasma instant hate she's not just her it's more we should give more know we give much less again we give as if so what is the point you the point here is that if you think about what it means to be perfectly rational it also means to be perfectly selfish right and in fact when we get people to think rationally become more selfish when we ask people who leave who just finished a class in economics to donate money to charity they donate much less because they just had a class that told them that it's good to be selfish it's optimal you just need to follow your your particular incentives em but it's kind of interesting to think that in this case we might not want to be we might not want to be people yet for people to be perfectly rational actually want them to kill him I want him to give you want them to think about it but but you can say so maybe we want people to be always perfectly irrational maybe we want people to be always emotional because only when people are emotional they're doing the right thing but it's also not correct because there are some problems that are inherently easier to feel for and some problems are harder to feel so for example prevention prevention is very hard to to evoke our emotion because it's about curing something of people who perhaps were not yet born there's no face there's no way for those kind of trauma to provoke our emotion so if you look at the range of problems there are problems that can evoke our emotion naturally very well and we are easily giving money to those charities and there are problems that are hard for them to evoke or emotion and therefore these charities get dramatically underfunded for example malaria I mean we if you look proportionally how much money we gave to Haiti and how much money we're giving to malaria how much money we gave to 9/11 or how much money people gave to the parents of baby Jessica compared to how much money we give to other things you would come up to the conclusion that trusting our emotion to judge which events we need to support which kind of charities we support doesn't do a good job so here's the situation emotion gets us to care but it doesn't get us to care in the right way so we need some kind of combination between those we need some emotion to get people to care and you need some cognition to figure out what we want to care about the final story I want to tell you about this advantage of being rational is what's called the trust game about story about the trust game in revenge and then can I get two volunteers maybe you and Zoey okay stand up and so so don't look at each other you're strangers you don't know each other and here's what we're going to do imagine the following game I give Zoey $20 this is Zoey you can do two things with these $20 you can take it and go home or you can pass these $20 to player B which is here we don't give him a name she doesn't know who it is if you pass your money to player B the money would magically quadruple so by the time player B gets it'll be 80 and now player B can do one of two things play we can take the $80 and go home or you can send $40 back to Zoey now let's think together imagine that all of you a player B and imagine all of you are perfectly rational player B's what would you do if you end up getting the money go home right I mean you don't see I mean it's not rational for you to give away 40 dollars to people you walk on the street you have money you're selfish you go home and knowing that if Zoey predicted that's what player B would do what would she do to start with not pass the money so the standard theory says though we will never pass the money and player B will never pass the money back turns out people on national economic theory that's kind of nice thing for Humanity right we're nice and economic theory often people send the money often people reciprocate but here's where the game becomes more interesting imagine it Zoey sent her $20 if you got 80 and then you decide to go home with all the money you can sit down now you get home none of you you still here you just you can say okay so Zoey sent the $20 player big at 80 and player B decided to go home with all the money and now I come to Zoey and I say Zoey I'm really sorry you lost this money but I'll tell you what if you go into your checking account and you give me some money I will go and I will hunt player B down for you in fact for every dollar you would give me I will find them and I will take $2 away from them you'll give me $2 I'll take four from them you'll give me five I'll take ten you'll give me ten I'll take 20 from them you'll give me 40 I'll take eighty from them and now think about it how many of you would be willing to spend your own money to exert revenge on somebody you've never met and unlikely to meet again yeah now Thanks now now if you think that you're not willing to do it it's because you're not really feeling betrayed right now right but if you think through a situation that you have been betrayed I mean how many you know think about people who got divorced once for example and think about situation that where you felt betrayed and you can ask yourself under those conditions would you be willing to lose a lot of money to make the other party suffer even even more I mean we see it we see it all the time now it's kind of strange to think about revenge because it's very irrational why would though it be willing to spend more for own money to make somebody else suffering in fact if you think about it in the right framework it's incredibly altruistic of her to do it can you imagine something more turistic then punishing somebody you'll never meet again so that in their future interaction with other people they might actually behave nicer right it's kind of strange to think about it this way but that's what it means now why do we have this urge for revenge first of all it turns out it is a very natural urge when Ernst and some of his friends image people's brains while they were executing and plotting revenge they saw an activation in the area related to reward and pleasure now why would it be rewarding and pleasurable because it's actually very good for society revenge is a mechanism actually helps us coordinate it's not it so easy it's good for her it's good for us together as a whole to have an instinct for revenge and to think about it imagine the following imagine you and I lived on a desert island and imagine I had a mango and imagine you really wanted my mango and imagine it for some reason I wanted I was not tending to my mango it was left alone for a little bit of time and you were considering stealing it even now imagine in case one you thought that was perfectly rational so what you would ask yourself you say if I steal the mango what will then do and you would say well it's far away enough it's easy for him to get a new mango I will run far away enough not be worthwhile for them to chase me and under those conditions you might decide to steal my mango but what if you knew I was a revengeful type what if you knew it I will not sleep will not rest it's not the question of cost-benefit analysis it doesn't matter you take my mango I'm going to hunt you down I'm going to spend day and night chase you anywhere I'll find you I'll take your man my mango I'll take your bananas you know I'll do lots of things under those conditions would you at all entertain the possibility even of of taking my mango very unlikely now if you think about it trust and revenge are actually two sides of the same coin Trust is a fantastic thing to have in society that's the reason you can leave sometimes your house open and car keys and you can use your wallet in your drawer and nobody would steal them if everybody around you will continuously selfish selfishly maximizing your own benefit we will have a very different world and revenge while seemingly irrational is actually incredibly useful because it facilitates the ability to trust so here's an example of two things trust in revenge that even though the individuals are irrational in fact when you think about that quite useful and I'm not sure at all that we would want to create an environment in which we don't have both of those I mean I think we could perhaps if you could only have trust in know revenge maybe we would like that but given that they go hand in hand they're quite useful as a mechanism so this is the second type of benefit of irrationality of something with economic theory is wrong it's not that human beings are wrong and we could fix them it's a part where actually the description of human being is what's optimal it's not exactly correct and we need to work on what is this this description okay so these are the two the two things I wanted to to talk about I'll just say one last kind of comment is a summary you know there's lots of irrational tendencies no it's very nice because we have a lot of things to study and our job is guaranteed for many years you know in a new rationality czar invented for example ten years ago none of us would have dreamed about studying texting while driving but we invent new irrationalities we invent new ways for us to fail as as technology progresses now beyond the particular examples of irrationalities I think the big lesson is the lesson of how much do we trust our intuition so so I started when I start writing predictably rationale that the first example I gave is my experience in hospital I said that I was I was in hospital the nurses will think about how to remove my bandages and the question was should they remove them quickly rip the bandages off quickly or remove them slowly and and just think to yourself for a second if you consulting your intuition would you say it'll be less painful to remove bandages quickly short-duration but high pain or slowly long-duration with low pain who people who he would vote for the quick approach who would vote for the slow approach okay so most people the majority of people this is not perfectly representing most people believe in the quick ripping approach and the nurses had an intuition they had the past if you thought would work best and they kept on following this path but that's the danger of intuition every day the nurses were faced with this decision they decide to follow their intuition turns out they were wrong no no it's it's wrong I mean you you better off remove bandages slowly it creates much less pain for the patients but sometimes we have an intuition takes us in a particular path and we need to question it we need to ask ourselves our intuitions correctly and what do we do to try and educate our intuition and this is not just about nurses or not just about individual it's actually a very general question think about the health care reform how many people here have strong opinions about whether having a public option in the healthcare reform bill was a good idea or a bad idea how many people have a strong opinion very good I mean everybody has strong opinions about those things the fact is that those are intuitions you have no data right it's kind of interesting how we're willing to bet about 80 90 percent of GDP on intuitions right wouldn't it make sense to admit that the reality is we just don't know that much and we might as well you know retirees a little stake let's kind of do some experiments there give them some health care system for a few years and and see what really works right and as long as we keep on following your intuition we have a good chance of following ourselves and just making the same mistakes over and over and over okay so that's basically it for me I'm happy to take questions comments concerns I hope you talked about other things dating yeah how how do we get people to care so I'll tell you about one thing we're doing right now which is kind of kind of this approach of ego so we are trying to get people in the Middle East to care about water water is a big problem in Middle East the parties it's a barrier for peace in many in many ways and the problem with water it's a private consumption but like energy you consume at home it's really nice to have a long bath it's really nice to wash the dishes with having the water running it's nice to have a garden and water it it's really inefficient so the question is can we externalise it so we've created this virtual lake in which each individual can have a drop and your drop is proportional to how much water you're not spending so every time you save something your drop becomes big and if you think about it usually when you consume something you know what you couldn't see what you don't know what you haven't consumed so we're trying to visualize what you've saved right so that so this is a virtual representation and when you walk around this you know float around this virtual like you can see other people's drops so you can see how much you have saved you can compare it to your neighbors your your friends and people can join together they could grab drops for classes for schools for neighborhoods and what we're trying to do right now is to integrate it with Facebook with the idea it will update your reputation and so on so you know can we get people to care about what is a very very unlikely can we create regulation the government can we are not able to do it but can we tap something else like ego and and get people to do it for the wrong reasons but do the right thing I think so so I think the same thing we could do with with energy I mean we can we can tap eco we can tap social norms there's been all kinds of a tentative being done on this regard and are quite useful the other thing we're trying to do is we're trying now to to advise the Department of Energy about how to design the energy label think about you go to the hardware store and there's going to be spent 15 minutes deciding which washer and dryer you're going to buy and this decision is going to have electrical consequences for 10 years so can we somehow get you to feel the most guilty while in those 15 minutes right I mean it's one thing to care about you know what are you switching lights and so on that's a long-term decision but if we can focus our attention on how can the label create the most guilt at that moment and just change your mindset momentarily we can influence you for a long time so these are the kind of things that were we're trying dating okay so I'll tell you a quick story about dating so this is part of the research with zone so so dating is actually an interesting market how many people here are single okay so so it turns out that if you think about it in every other market we move form decentralized market to centralized markets we create financial market spot markets supermarkets lots of places where we bring buyers and sellers together in some sense and the in dating market has actually been the opposite right we used to have ENT yen tourism market maker used to go around find out all the details figure out who would fit with who and parents used to tell their kids what to do who to marry that's again kind of a market mechanism but then all of those dispersed with the idea that love is about romance and finding the right person you should do it what you're on all of these mechanisms have gone away and not only that but but the work environment has changed people move a lot most people move to a different city for college and a different City for work and they keep on switching jobs very frequently romance within the job place is not really considered very appropriate so people have in their work hard many hours so it's really tough right if you're single these days it's really really tough so if you think about it online dating could have been tremendously useful really important but the question is are they functioning in the right way are they designed to help us do what we're supposed to be doing so imagine the following thought experiment imagine I ask you to give me a list of hundred people 50 people you like and 50 people you don't like so much I'm not talking about the bottom of the pile I'm just talking about people you don't like that much and you gave me this list of 100 people and I went to them and I asked each of them to fill their profile on match or harmony or whatever and then I came back to you and I gave you this profiles without the picture and without a name I gave you the profile and I asked you to sort them to two piles a pile that you like and the pile that you don't like how successful do you think you'll be in the assortment people are awful right they're awful in this and and the reason is that the way online dating sites describe us is in the same way we describe digital cameras pixel and speed and a essay and type of lens people are not like that if you took your friends your dear friend and asked you what is it about them that make you love them so much you're going to say well it's the combination of their height and their religious preference isn't it this is not yet this is not it people are a little bit more like wine but it turns out when you taste wine or juice whatever I mean you know if you like it or don't like it but the act of breaking it into attribute doesn't help you that much then we actually did an experiment recently we went to a wine store when a group of fine schmucker's this French makers the English expression for people who think they're really connoisseurs anyway they arrived and and we we gave them five wines and we asked please describe each of these wines in details and people say oh it's leafy and it's this tannin and a low acidity and then we took this description we gave it to other people and say try to match it with the wine no ability no ability whatsoever then we gave it back to the people who wrote the descriptions and they couldn't tell now it's because when we taste wine we actually know if we like it or don't like it but these descriptions are useless so so what do you do if you understand that this is the problem and the reason we have online dating sites the way they are is because it's easy for computers to search on you know these are all measurable things you can search on it that's fantastic for computers not for people so what we try to do was to take a step back and to say what do people do when they go for a date do they sit across each other and interview each other's where'd you go to school and what you do and no of course not in fact what we do is we go and we experience something together we go to restaurant and I see how you interact with other people so we go to an art gallery as you know you react to two things and perhaps by this intermediate not the repped relationship but by experiencing something together and get it to reflect on if we actually learn more about each other so we tried it out we created a website called virtual dating in which you got to pick a shape and to pick a color and you went on this virtual space and in this space there were all kinds of stuff there are pictures and images and all kinds of things are going on and as you got close to one of them another feature another avatar could come next to it and you could start texting with each other and the texting was no longer like in online dating by the way I did a discussion online dating are unbelievably boring it's amazing it's amazing how boring they are I actually tell you something about this in a second the discussions were not about nothing anymore they were about something they're about the piece of art - the picture the image and how did you think about it what does make you think of what else do you like and then we got the people who met other people in online dating sites regularly and on landing site and people met people on virtual dating had come together and evaluate each other and see who did they want to go with and our virtual dating site even though it was simple and trivial and not that sophisticated did twice as well as the regular online dating site in terms of getting people to actually like each other and go for a second date now that for me is actually quite optimistic I mean on one hand it says what what an awful job people are doing in online dating sites but it says improvement are actually quite easy the mom you understand what people can and can't process and how do we actually deal with information you try to integrate it huge space for improvement and it's not just in dating it's lots of stuff lots of stuff we describe by way that are easy for computers and not easy for us what is a three hundred thousand dollar deductible or three hundred thousand dollars liability limit on your car insurance what is it good bad too much too little we have no idea companies they have actuarial data they can tell you what it is but the way they describe it to us is something is comfortable for them but completely useless for us I'll tell you something else about boring discussion so we couldn't believe it I mean by the way when we went on the got data from online anything we couldn't believe the discussions and and we thought it can't possibly be that people actually want to have these discussions but there's a notion of equilibrium in economics who basically mean that there's actually lots of equilibrium and the question is what equilibrium people end up choosing and perhaps what happened is that we really want to have an interesting discussion but we're uncomfortable so we can reduce reduce the quality and eventually you know we end up talking about the sports or the weather or other boring stuff that we don't really care about what do you really want to know when you're in online dating why did you break up from the previous partner and the stds I should know about sexual fantasies I mean lots of stuff that you really want to know but very hard to ask about because everybody talks about you know where did you go to school and you know how many brothers and sisters do you have and so we created a game that didn't allow anybody to ask these stupid questions you had to choose one of 20 questions and all the questions were racing now they were moving from little racy to very racy and because you were forced to ask one of them it became socially acceptable now people could have just picked them the low one and kept on with them but no once you gave people this system they were very happy to escalate and ask questions they were really happy with now you know that's that's again it's a question of you let people do what they want you know what what they feel comfortable with and often it deteriorates or something that nobody's happy with but if you build a system that actually help people achieve what they want you can actually get much more much more out of it yeah so so the two points what is you know we all have examples of people who met in online dating but of course you know we also have example people didn't meet an online dating and given how many people actually non like dating is it really miserable outcome ratio it's not as if you look at the trend and you say oh my goodness let me look at the history the moment online dating introduced marriage rate has increased in some in some way or long-term relationship is increased that hasn't happened so it's true some people meet like this here's kind of a really depressing statistics how many hours of searching and writing people do you think you need to do per coffee it's about six hours it's six hours of online dating for one coffee and usually it's just one coffee this is this is like you had to drive three hours with no radio I mean just in silence no cell phone to meet somebody for coffee and the Audis that's it this is a really low exchange rate now the one thing interesting about Friendster is that an online dating people cheat and in fact people cheat in interesting ways and just a little bit and in a way that they could think about this can I can I talk about your husband so so so Shane Shane had the office next to me and and when he so he was online dating before you met Zoey it was big part of my insight into this in this world and and when he turned 40 he really questioned where does he fit in the category he said you know do I move to the age category of 40 to 45 or do I stay in there you know whatever 35 to 39 and Shane said you know I'm a young 40 it's true it's wrong 40 but when people see me they see how young I am not to mention immature and so so you know he was it was comfortable kind of going one category down would've been comfortable going to categories and of course not but people are really happy kind of fudging reality a little bit and what's interesting about how Shane be written as well as other people is that when people do it they convince themselves that the way that they portray the information is actually all correct position you know if I put myself in the 4243 category I'm actually not correct because I don't look like those people I look more like the young people it's more accurate description of mine of myself so it turns that people cheating lots of these little interesting little interesting wearing online dating so it's an interesting question what happened if you put people in these systems and you know I really talk about kind of system in kind of engineering people if you think about my interference story I put myself into this system right then you can ask yourself are the cases in which people would put themself into this situation so tell about one other thing we're trying it turns out that no man in the history of the world has ever walking up and felt the today's a good day for colonoscopy if you can imagine this right so so what do you think men do on the day when they have a colonoscopy schedule you find other things to do right they don't show up often they don't show up so we we told a group of men and we said what is when we schedule for you a colonoscopy we will also ask you to write us a check for $500 and if you show up for your colonoscopy on time you'll get their money back and if you don't their money goes to us about 60% of the people are happy to do it right they're happy to do something that they might lose their money because you might wake up that day and actually be sick or actually get your own traffic jam I couldn't do it for real reasons but their cases and if people are willing to put themselves into this situation because we know we will fail so I think there is a class like that where people actually want to put play mind game with themselves like I did with the interferon we want to put ourself in situations would get us to behave to behave better think about something else have you ever texted while driving none of course not and imagine imagine you had a device that you can install that will prevent you from doing that right would you would you be willing to invest some money in doing it turns out people are willing to understand some things I'm willing to invest money and effort and so on in things that would prevent them from behaving badly there are other cases in which we ask ourselves where we can manipulate people in cases where they are not interested in not choosing it by themselves and we haven't looked into this but I just fact it will be still be effective knowing that I tried to create regret in you will not really help you not feel regret right you can't get this call and say hey you just missed the cost oh yes it was trying to create regret you could still say almost if your rationality is more due to nature or nurture and so so so so I think it's it's it's very bad so I mean the following answer so in general the stuff that I do looks very similar I mean we don't see gender differences we don't see cultural differences we don't see age differences across across many things there's one place in the book when I describe gender differences in in something but it's it's really kind of unique and it's because we do very low-level decision-making every staff I describe its kind of really basic things that become more a nurturer are actually more complex decision so at our level of simplicity there's no difference you would have to do something more complex now I'll give you an example for this so we've been doing lots of studies on cheating when we ten people to steal money from us and the basic paradigm is we give people a sheet of paper we say we'll pay your dollar per question but we allow them to tear the sheet of paper so they can tell us how much they solve and we pay them and they can cheat but we actually know how much they really solved and we can figure out how much they cheat it turns out lots of people are very happy to cheat just a little bit and and the way - the way to understand it is that we try to balance two goals we try to feel good about ourselves to look in the mirror and feel wonderful fantastic people and we also want to benefit from cheating and it turns out that you could think how can you do both well it turns out as long as you cheat just a little bit you could do both you can still think of yourself as good and benefit from cheating just a little bit so so a question we've been asked a lot is are there cultural differences so we try this oh I grew up in Israel I try to check whether the Israel is cheat more than the Americans actually before I tell you this how many people who grew up in different countries okay keep your hands up how many people from the people who grew in different countries believe that there are countries cheat less than Americans Canadian way from Holland almost Canadian yeah so it's kind of interesting by the way that the majority of people I've talked to believe that there are countries people treat more than Americans but anyway so we checked the Israelis and I thought that the Israeli we treat more than Americans they don't that you just like the Americans my Italian collaborator was sure that the Italians would treat modern Americans they down which is just the same my Chinese collaborator was certain the Chinese would cheat more than American she the same my British collaborative thought again in our task everybody treats the same but others have no cultural component the way I come to think about it now is that culture helps us take things in and out of the moral domain is cheating on your spouse cheating or not cheating if it cultures have different decisions about this is cheating on taxes cheating and not cheating different cultures think about it cheating on exams but once you deal with something that everybody agrees isn't cheating people actually quite quite similar there is one exception do not end with this and exception is that we took our cheating tasks and we went to Washington DC and and we went to bars where congressional staffers hang out in and we checked how much those guys stole money from us and we went to New York City and we measured how much bankers stole money from us so who do you think cheats more politicians or bankers who votes way who votes for politicians who votes bankers okay so maybe three to two so I have to tell you that my intuition was that politicians which it much more the reality is that bankers to two to one to the one so so I was surprised however however these were congressional staffers so they were junior politicians you know maybe people maybe there's still a chance and okay so thank you very much

Channel: GBH Forum Network

Views: 31,823

Rating: 4.9331102 out of 5

Keywords: behavioral economics, economic, psychology, dan ariely, the upside of irrationality, harvard, book, talk, wgbh, boston

Id: Ag9f8AX02j8

Length: 51min 47sec (3107 seconds)

Published: Mon Aug 06 2012