Good Life Project TV: Dan Ariely

hi everybody Jonathan fields my guest today is Dan Ariely Dan is best-selling author and James B Duke professor of psychology and behavioral economics at Duke University with appointments at the Fuqua School of Business the Center for cognitive neuroscience the Medical School in the Department of Economics his work has been featured widely in the New York Times Wall Street Journal the Washington Post and many other fancy places all over the place and he's the author of a couple of books that I have been fascinated by he's got an incredible personal story that we're going to explore to a certain extent and then jump into his latest work and talk about honesty and dishonesty and sort of unwind some mythology about it so Dan great to be here with you today thank you you have you've a fascinating personal story that I want to explore with you also in part because it seems like a lot of your professional path has been an outgrowth of things that happen to earlier in life so if we could sort of circle back to the earlier experiences that sort of led to your exploration of how humans explore the world yeah so as you can as you can tell I was badly burned when I was in my late teenage years and I got burned in 70% of my body and from here down and from here up and I spent about three years in hospital and hospital is a place that provides lots of opportunities for observing irrational behaviors and there were quite a few that were of particular interest to me so in the early days in the burned apartment my main concern in life was how they're going to take my bandages off so the worst thing that happens to every burn patient is what's called the bath treatment every day they would come with a little forklift and lift me up and take me to this room and kind of sink me into a bath with iodine water and let me soak a little bit in there and then try to take the bandages off now how old I was 18 and if you think about it imagine that you know everything is burned which means that there's no skin so the bandages basically adhere the flesh and and the kind of any bleeding that happens just kind of adheres it and so they the water helps a little bit but then they have to take the bandages off and it can be looped you know three or four times around around everything and tearing it off is incredibly painful and not only is it painful you can hear the screams of the other patients a before and after the screaming after is not as bad the screaming you hear before is much more terrifying it and and that started me thinking about you know what what was the right way to take bandages off so I really wanted to take the bandages off myself and there's lots of research on control but I couldn't my hands were just not as good at that point I couldn't move anything but I asked the nurses to take it off slowly to rip it off more Muslim and they told me that this was the wrong the wrong approach and my first research project and I left the hospital and I started studying in the university was what's the best way to take bandages off what's the best way to think about how you distribute pain over time another thing I became very interested in our placebos for pain so we had the budget of how much morphine we could get every day we had a certain amount of morphine and we could decide which patient could decide when they want morphine and when not and how to allocate it among and sometimes at night I would hear other patients scream and they would go and give them morphine and I not only controlled my sense of how much morphine I was getting I also kind of took try to take stock what other people were getting even at hospital it's like you're the research brain is kicking in trying to say what's the process what's what's going on and and sometimes they would give somebody at night some morphine and I would call the nurse and I said I know you just gave him too much can't I get some extra and many times they said that they gave them sailing they gave them placebo right and you know it's one thing to hear about placebos it's a completely different thing to know that somebody in the next room is suffering the same pain that you have and then they're getting an injection with nothing all right salt water and they go to sleep and and that got me incredibly interested in in that aspect and later on I've done all kind of research about placebos and how they work and it turns out they really work when you get an injection your brain secretes in opioids very much like morphine that actually change our our pain perception right and so there were there were plenty of things to observe and I think you know like like lots of things in life sometimes when you go to the extreme and you observe something it's just more clear and then you can try to generalize so my my research is mostly not about people who are experiencing extreme pain or but but it is about thinking about what's a pattern of pain or pleasure that creates the most happiness so the least misery and and how do placebos work and how do expectation change the experience and once you get into a situation that has kind of these very high intensities it's easier to observe and then try to study them in other areas of life and you know it's it's incredibly sad but also interesting that hospital gave me so many experiences to draw on that are keep keep on fueling my research life yeah and I mean I imagine that would also change your perspective on just having gone through your own personal level and understanding the psychology behind it not just from an experimenter looking in and running experience but having been the subject on the deepest most visceral level so I think both of those are right so one is that you know if you thought about how happy you are the scale from one to 10 right we all have what we think is one and what we think is 10 my one is just much worse than most people thankfully all right I don't wish this on anybody and and I think because it is burned and because I keep on seeing them on myself and because I still have some pain not nothing like I used to have but I still have some pain it helps me remember that one so because I remember how bad life can be I can take small happiness and think of it as higher happiness and I also don't get really upset with little bad things that happen which is interesting too because as recently having conversation people that in the world of health you know one of the biggest challenges is we all we all know that you know preventative maintenance is one of the biggest things that you can do to be happy or healthy or enjoy life more but it's nearly impossible for anyone to do it people will respond afterwards but what's even more fascinating to me is that you know somebody has a cardiac incident they'll very often they'll go through a full cardiac rehab but then six months out a year out of compliance with that behavior evaporates what's kind of fascinating about what you just said is you have this visual reminder and so I because I always wonder you know what happens how can we recreate the experience or a regular reminder and people after the initial pain it is and it has gone so that the compliance level stays high yes I think I think there's something that are going to be better candidates for that stuff that you have reminders of and there are some things that get people force people to a particular routine and when there's a routine that is forced on you there's no problem like to think about pump inhibitors people who get these medications for stomach acidity no compliance problem right I mean the problem with compliance is for things we don't feel on a daily level that we don't feel the negative the positive side and we do feel the negative sign and compliance goes down dramatically actually for for me the biggest issue with compliance when I was in hospital I got a bad blood transfusion with their liver disease and it kind of was really terrible to get a layering on top of everything that's on top of everything else I month two in the hospital I get I get this liver disease and you know the first thing that happened is the transplants are rejected then the disease subside then there's another operation it flows up again it was really a mess and about 10 years after I was originally injured that was out of hospital I was in grad school I had another inflammation or a flare-up I went to the hospital and told me I had hepatitis C by the time they could identify the virus and they offered me to join this FDA protocol to try and see whether a medication called interferon that was originally proof for her as leukemia was going to work for this and each of those injection was pure misery for about 12 13 hours Hey I each each time I injected myself I was you know vomiting headache sick for about 1213 hours and this for me was the kind of a the the most intense self control problem right in principle if I would take these medications for a year and a half three times a week I might not die from liver cirrhosis but for sure I would have this incredibly miserable night and and again I think it's at that time that it was just a trial so they didn't actually know they didn't know it was so there's a risk in there that's right now and even if they know it doesn't help or ballistic but this this again I think was kind of an extreme case right it's it's a bit more intense than exercising or eating well it was an incredibly interesting case to try and think about how do i how do I control it what do people do what do you do when you have to do this miserable thing for a long for a long time in my in my particular case I basically use the principle we call reward substitution and remote substitution is the idea that we sometimes and we are not designed to care about the long term goals right the liver in 30 years global warming whatever but maybe we can create a short-term goal but we would work toward and through that behaviors if we care about the long-term goal so in my particular case I did a deal with myself that says that every time I take the injection i watch movies right so I basically kind of had this substitution I didn't take myself the injection not to dive in 30 years later I took the injection to watch movies and that kept me going on and I think it's actually true for many of those soft control problems when you talk about anything you say it's really difficult to be motivated about the long term but maybe what we can do is reengineering so we have things that are short term rewards and they can be much smaller and more effective because they're immediate so what's interesting here is a reason I was having a conversation with Charles Duhigg who had this big exploration of of habit and we were talking about you know what he serve described is I guess it's sort of the classic stimulus would glad to have it you know there's the trigger or the stimulus the behavior and the reward yeah so what you're talking about to a certain extent is also manipulating that that's right if there's something we call choice architecture and choice architecture is the idea that we feel that we make decisions we feel we're in control we feel we're driving but the reality is that the environment decides for us a lot of what we're going to which we don't like to read oh I know it's very hard to admit so the nicest example for this comes from a research paper that examines percentage of people who donate their organs in different countries and basically if you look at Europe their countries that basically everybody donates in countries of about 20% donate what's the US by the way remember what's the u.s. we're not I'm betting it's down yeah well it's not very high but I am NOT a number if it's in the single digits or 10 or 20s but it's it's it's not high but in Europe you have this come visit basically virtually everybody gives in country 20% give and when you look at the differences between them it's not culture it's not friendliness it's not religion it's how the form looks like and the basic story is that if the form is what's called an opt-in form that says check the box below if you want to participate people don't check and don't join if it says check the box below if you don't want to participate people do the same thing they don't check but now they join and and this difference in the form basically creates this tremendous difference in participation now if you think about it what it means is that the person who designed the form has more to do with whether you would donate your organ than your own preferences right and the thing is it's really hard to observe I'd imagine that I send you to the DMV tomorrow and you got an opt-in form or you got an opt-out form and imagine you behave just like expected opt-in you would not opt out you would and then it would come out and I say Jonathan why did you decide what you decided there is no way that you're going to say that form I did it because of the default in the form you'll come up with stories fantastic stories interesting stories very natural it was my duty I'm a good kind human being it's dangerous I mean you'll come up with lots of to justify rationalizing whatever you would do but that's this is an incredible principle that's the environment in which were being placed actually has a lot to do with how we we decide and then on top of that it's were unaware of that so think for example and refrigerators it's an environment somebody designed them do you have sometimes rotten in fruits and vegetables and the bottom drawer and I've heard of other other people of course not today now if you think about it it's a really bad placement right we take the food that we should probably spend right and we must put it away so we put it away in an opaque right right where it should be front and center so that it comes to mind first right it's a really small element there's a beautiful research that shows that if you by the water fountain if you have the Styrofoam cup first and the you know the ceramic cups before that people take this terraform you switch them people like this one I mean you're reaching another six inches turns out to be a big deal because we're not thinking very carefully we not say oh let me think about it sterile so we do what's ever simplest doing something else and because of that the environment really matters a great deal and the nice thing is that we can actually be active in it so sometimes it's other people designing our environment like refrigerators but sometimes we can think about their own environment and how we restructure it to get ourselves to have a better outcome which is amazing also because we don't like to think that a designer at a company you know 50 years ago is determining the behavior that we have today yes it's just you know it's a foreign notion to us but if you my bet is that and I'm sure you've spent a lot of time doing this if I started looking at you know every interaction throughout you know the course of a day and then a week for me that's so much of my choices or lack of choices are were made sort of unconsciously by some designer decades ago that's right I think that one of the saddest example everybody knows this is the keyboard right so the keyboard was designed the way it's now to slow typing down it was designed at the time when they were mechanical right say hit me they'd want the kids to get you didn't want to get a kids do too it was designed slow people down right now we don't need that anymore from quite a few years right there's no reason to slow us down and there are better keyboards that don't slow us down incredibly hard to switch into them I mean we somebody designed it for a very different purpose and we kind of stuck with it right and we don't realize that yes I mean it really is incredible how much of our life operates on that level and like you said we don't want to own that because we want to feel like we're autonomous beings that make choices and and with you know your last book you know the last two books really about you know rationality and rationality we want to feel like we're rational beings who are in control of our futures and the truth is you know a huge part of it it just does not happen that way yeah and you know I also think that some of it is justifiable right some of it is were busy people we have our own things I mean we don't each one to become experts in banking in mortgages and phones and I mean in all every decision is becoming so much more complex right now you want to figure out what's the right phone to get I mean there's so many different attributes you can't you can't possibly become an expert in everything but the truth is that as life becomes more complex our ability to make good decisions is lower and because of that we rely to a higher degree on heuristics on the environment on other things short cuts and therefore we're even more susceptible than we used to be there's a very cell analysis that looked at why people die and what is the percentage of human mortality that is caused by bad decision-making and they looked at what happened about a hundred years ago and what percentage of human mortality was caused by that decision-making into a ten ten percent and they look at it these days and they thought it was more than 40 percent why how come well what happened is that over the last hundred years we designed lots of new technologies many of them good some of them can kill us obesity diabetes texting and driving smoking right so as we design those things we're creating tremendous pressure on our decision-making I mean think about the doughnut right in principle a good invention you take sugar in fact you put it in a small container right if you could add some vital and distributed while in Africa maybe it will be great but not only do we have Donuts we have lots of them so now we take something that is a technological innovation right in in some ways and we make it such an incredibly tempting and you know not only is it incredibly tempting now it would only get more tempting in the future right and we have whole scientists built around a million in on the Dow expand right how do we make it in the nth degree more irresistible because there the commercial world around us almost all of it wants us to spend time and money now right the thing about it who wants you to delay gratification maybe financial saving and preventive health but both of I mean the both of them one of them doesn't exist one of them is small and and the other issue is that they are not as apparent in our lives the things that are apparent in our lives our credit cards and stores and all kinds of other things in facebook that wants our time and attention right now yeah and and it's yeah when we look at what happened in the economy in the last four years also it's just this focus on everything it's just we've seen you man I guess the marketing world the business world knows that we're sort of soft wired to focus all of our energies on here and now even though but what's fascinating to me is that when you know the financial world for example a huge amount of time and energy spent into hey let's talk about planning let's talk about Johnny let's talk about planning and a lot of money that goes into setting up things in the future but you know it's it almost is in conflict with you know a far greater part of that world which operates on a very very like sometimes neo in the trading world and yes what second basis yeah so I mean the financial world has lots of worlds right and they are very different than they don't show the same logic and so on but financial planning I think is actually an incredibly important field that is right now completely in the wrong direction so you know I think it used to be the case that a financial planner could charge you some money for optimizing your portfolio and balancing you know stocks and bonds and so on and it was okay at that time to charge you maybe 1% of assets under management for that I think those days are gone I think it's hard to imagine that today balancing a portfolio is worth that amount of money and so I think most of the financial planners are really getting paid way too much for doing way too little because it's it's easy to do these days now you can argue a little bit better but you know generally what I think is incredibly hard for people to do is to reason about how to spend money so what financial planners do is they take the money that you give them and they optimize that that's small potatoes I think the real issue is to help people figure out how to trade off money between now and later and money is all about trade-offs every time you buy something you just bought my next book every time you buy something you're not going to be able to do something else what are these trade-offs that you're making how do we help you reason about them think about something like a house we did this study when we got hundreds of people who are looking for houses to come and do searches in our lab and you know what they do is they get the maximum out that they can borrow they put it in and they look at houses in these prices and a little bit above the reality is that what housing is not an investment it's an investment - but it's also where you live and what you need to ask yourself is if I get a two-bedroom versus three-bedroom how much money am i saving and what could I do with that money would it provide for me a better retirement could I go for extra three weeks a year vacation if I get a parking spot not what what are the trade-offs that we're making but these trade-offs are incredibly complex and we can't possibly expect that anybody would be an expert in making all these trips how many houses do you buy in your lifetime so I think what financial advisors need to do is to need to become experts in the psychology of money they need to be experts in thinking about how you trade-off things and you know rather than optimizing a portfolio and getting a quarter of a percent more maybe they could get you to spend money in a more efficient way or to spend ten percent less and I guess there is a whole sort of there are some people that that focus more on doing but I think it's but in its increment it's incredibly rare so a few weeks ago I met a very successful financial plan a financial advisor and we said together at dinner and I asked him how much does he think he could benefit his clients by spending another two hours a week optimizing their portfolio versus spending two hours a week talking to them about how much they're spending compared to how much they're saving and he said there's no question that he could give tremendously more benefit in the second scenario when we talk to him but he said he's just not interested Wow one said he's not in that business right is not I mean and what he tells me what he does is not really interested in the welfare right he basically found a really good way to make money is to take their money in because that way by results I mean I think part of it also is that there's so much of the optimization these days is automated that if there's not a lot of work yeah a lot of the research is handed down and and it's like tweaking where's that that's real work no choice I mean that you really have talked to everybody you have to understand their preferences you have to understand what's important to them and it also feels more like clinical psychology I think when you go to a therapist then somebody who's numerically quantified right and they can can think carefully about numbers and know something that you don't know I think it would be it's almost like it's two different people yeah there's a there's a funny story that's when when Black & Decker bought the small appliances division from GE all of a sudden they had Black & Decker logos on popcorn makers and dustbusters and all kinds of things like that and all kinds of all of a sudden handyman felt embarrassed coming with a Black & Decker drill because you know you came to somebody's house and they had the vacuum cleaner that was the same brand it didn't feel good and what they did was they created a new brand called the world that was this yellow and that's where the volcano that was the world which is sort of like the professional it's actually the same one that's the same drill it's just covered in yellow and it - but they they basically could not overcome the embarrassment factor of people feeling that it's the same brand as their as the coffee maker right they just didn't feel right and I think financial advisors have a similar problem is that they hey they have the halo of finance behind them and kind of dealing with what makes you happy and whether you might might get them to the rate of psychologist rather than the rate of financial advice right now it's really interesting observation it's intercession also brings up a word for me and which ties into you know all of your different levels of work which is legacy and how we make decisions about you know what won't because we're talking about sacrifice here and and you know like what we're willing to give up to get this and on one level you can see okay I'm willing to give up this to get this later in my life yeah but what's even more interesting to me is I'm willing to give up this to leave a legacy that I won't be here to you know directly benefit from and and I think in some sense it's incredibly important but when we go on our day to day it's incredibly out of mind so we love our kids and we invest in them and it is our legacy and I you know I teach for a living and I think about my students is kind of taking the ideas and lessons and hopefully I taught them something useful and there's a continuation but I think most of the things we do have this theme or many things we do have this theme but it's not as if this is actually the motivator and it's too far in the future I mean it's a little like global warming right it's way to find the future it's really hard to care about it if I talk to students and they were just sitting there with completely blank faces with no feedback and no question and no immediate reward and not that when we find it right I mean maybe I could have three times more students but they couldn't do it so we do need the immediate gratification to do things that we care about in there in a long-term but it's incredibly hard actually you know you look at the financial crisis one of the big big lessons is that a quarter is not the right unit of measurement to do for financial reasoning I mean the fact is you know now we for quite a few years we're getting this report in the stocks daily right in in the news as if this is news right this is random fluctuation I mean why some people I know people that just have you know the screen running all day like oh and just the tickers going on yeah and you know if you're in that business maybe but it's it's I don't know what ninety-five percent no is five percent signal maybe this should not this should not be news a quarterly earning I mean why why have we picked quarters is this the right time frame to focus on right I mean ideally we would not do it this this frequently we have kind of a phrase saying you are what you measure is at the moment you start measuring something people start focusing on that and if you measure daily earnings people will focus on that you make a quarterly the focus net you may measure five-year earning people would focus on whatever you start measuring you have the potential of making that the focus of attention frequent flier miles but have you ever flown some crazy route to get a bit more right right ideally you want to maximize happiness not frequent flyer miles and happiness is hard to measure frequent flyer miles are easy and you see it in the statement so sometimes we optimize the wrong thing just because it's easily measurable and we get kind of a yardstick and a feedback and I guess that's what you were saying you know in the last couple of years I guess one of the big push backs on that whole thing has been that there's been so much focused on optimizing for the quarter this that you know which is very often is not the best long-term interest of the clients of the company of really of anybody other than the person who's trying to optimize for a commission yeah and you know and I I also think there's lots of negative toxins CEOs and I'm contributing to that too so I'm but I think this is one case where people are not giving SEOs enough credit so there's a discussion of changing the rewards from the CEO from being from a quarter to five year or ten years but this basically says that they're only trying to maximize their own profit and they're not really thinking about the company yeah I don't believe that to be true I think it's true but I think that if I were CEO and if every day my stock was doing badly somebody would call me up upset it could be a neighbor it could be parents of my kids right it could be a reporter every day somebody would call me and every day the stocks went out somebody would call me and be happy with me right debt I think is much more rewarding and important and going to drive behavior than if you change the rewards from a quarter to five years changing the stock options from a quarter to five years basically mean that the CEOs don't care about any other voices and they're just trying to optimize their money so yeah I completely agree I think they try to please everybody and if you walk into a company and everybody's face is sad because they know that their value of their finance is just going down because your stock went down by by 3% you're going to try and cheer everybody up so let's kind of move into I want to explore your your most recent work you have a new book out now beautiful cover called the honest truth about dishonesty and it really is an evolution of what we've just been talking about and your prior work what tell me a little bit about what got you started on this exploration so so it's really all for me started with Enron lots of things in my life start with some observation of the real world in this case it was a neuron and the question was what's the better description of a neuron three bad apples who planned and executed a fiasco or is it better described with lots of people with wishful blindness and you know I couldn't go back and study Enron so I've been doing experiments with lots and lots and lots of people and what I find is that there are a few bad apples but they're incredibly few and there's lots of slightly bad apples but there are many of them and just kind of to give an example we we ran about 30,000 people in the experiments and I described here and there about 12 of them they achieved a lot and about 18,000 achieve the level and I lost about 150 dollars to the people cheated a lot and I lost about 35,000 dollars to the people cheated a little and I think that kind of flex the picture in society that from time to time the are cheetahs they're out there but what is really incredible is that many of us have the capacity to slightly change our view of reality and still feel good about ourselves so you know everybody understand this in sports if you're a fan of a particular team you know that every call your free calls against your team you think the referee is blind evil vicious something else and the same thing happens when you get paid right conflicts of interest in sport is because you want to see things from the perspective of this team the same thing happens if you got paid so imagine your banker and you get paid five million dollars a year if you can see a particular derivative as being a good product ask yourself whether you would not be able to truly see it as a good product I don't mean to lie to your customers say to your customers you should get it but you know that you're cheating right but you'll find a way you'll find a way and what we also find is that as things move away from money it's easier to tell ourself a story about this so there's a little joke and the joke is that the little Johnny comes home from school with the note from the teacher that says that little Johnny stole a pencil from the kid who's sitting next to him and Johnny's father is furious and Johnny I'm embarrassed and humiliated you never never never take a kid a pencil for the kid who sitting next to you you're grounded for three weeks and just wait until your mother comes and besides Johnny if you need a pencil you know very well you could just say something you can just ask and I will bring you dozens of pencils from work in the reason this is slightly amusing is that I think we all understand that taking a pencil from work is something we view very differently then taking ten cents from petty cash box even if we took that money and bought a pencil and we find these in experiments we find that when people cheat for something else it token that later on becomes money cheating goes up dramatically and this actually worries me a lot about the financial markets right if we if we can't cheat for cash but we can cheat more for tokens what about stocks stock options derivatives I mean as things become more and more distance from money and as you don't see the person that you're cheating it becomes easy you to cheat more and still feel good about myself and I mean what you just also said is as you don't see the person I I wonder also I'm it's fascinating to me and I wonder how much the interactions becoming digital and screen-based affects this also whereas if you were standing in front of somebody would you have a completely different reality choice you know our general approach is that we think in the economic framework of cost-benefit analysis and we say that the person will just if they can't be caught they will be just evil I don't think so I think people are incredibly good much better an economic theory would predict look I mean we're here now I will probably have time by the end of the day to steal all kinds of things if I wanted to from this thing odds are that I'm not going to do it not because I have a probability of being caught but because I don't want to do it myself right I have an internal mechanism that I care about and my own view of my own morality and sailfin and that's actually what keeps us at bay what's interesting is that mechanism that keeps us at bay is sensitive to things like how much are other people doing what can we rationalize it's a big social context who are we who are we taking from do we see the person there's a classical problem in philosophy called the trolley problem the trolley problem says you see a train coming and if it's going to continue straight it's going to kill five people but you are by a lever and if you pull the lever it will go on a different track and it would kill one person five versus one what would you do most people say I'll pull the lever kill the one this is the second version of this problem you're standing on the bridge and there's a guy next to you with a big backpack and the Train is going is going to kill five people and there's no there's nothing else you can do but you can push that guy and if you push that guy he would fall on the tracks the train will run him over and then it will stop and the reason he has a backpack is you can't jump yourself you need to be somebody with a lot of weight okay and would you do it and now most people say no especially by the way if the guy looks you in the eyes and you have to push him where backward but it's incredible and what's interesting is that in the first component we think five versus one where it's just numbers it's just numbers in the second case it's there's a person you look them in their eyes you understand that there's a livelihood there and you have a really hard time taking that away and I think it's again it's it's amazing what little distance does you don't need a lot right but little distance makes a big difference yeah it really is incredible I which is that I wonder how much you know as much as technology you know expands our world flattens our world it expands my ability to have relationships around the world at the same time I wonder how much humanity is taking from us yeah and well I think I think this goes back to our discussion about how do we design the world right then we have we can do whatever we want so think about the development of the digital wallet we will have a digital wallet and now we can decide how to do it we can decide if to represent opportunity cost or not represent opportunities for donation and charity or not the stock market we can also I mean every trader can in principle see once a day the picture like in Facebook of the people that trading for man right we could force them to be friends with it I am and what if before they had to confirm a trade that person's family picture come upon it's all it's all a question of design I mean there's lots of things we could do but if we understand the distance facilitates all kinds of mind behaviors with technology we can either say let's increase the distance or we can say let's decrease yeah it's an interesting point I use I'd look at as technology automatically increases distance but maybe it doesn't just maybe you can actually reverse that fast name one other thing that you talked about in this book that I thought was kind of interesting and we've talked about in your environment ditch and not just cheating but behavior in general but the Society of levers sort of like increasing and decreasing and neutral and talk to me just a little bit about this idea and how it plays into the idea of sort of honesty and so the basically kind of two starting points for the dishonesty that we find that most people can which is rationalization and a slippery slope and lots of things change rationalization and some of them kind of make sense and we experiment with each of them so for example with other people around you behave in this way right easier to rationalize when something is multiple steps in room for money easy to rationalize and by the way which people do you think find it easier to rationalize and other people turns out it's creative people why because here's what we try to do we try to be think of ourselves as honest and cheat a little bit and and you can say oh you can't do both you can either be honest or you can cheat well if you can rationalize the extent of your rationalization are you to do both if you create if you can tell by the stories right now you can cheat even more and tell better stories about it the same thing so it's amazing how many different mechanisms help us rationalize and from that perspective the book is not just about cheating it's really about these non-rational mechanism that help us to behave differently than what we would want and not see that and I'll say one last thing is which is that in policy these days there is the idea of disclosures and disclosure is being promoted sunshine policies disclosure and the idea is that if you just have to disclose something everything will be right and I think this closure kind of is incorrect and belittle people right if you are my banker it's about disclosure it means that the only reason you're cheating is it because you evil that what you want to do is cheat but if somebody is looking at you all the time you will not do it but the only thing that stops you is that somebody is following you but if you think that most of the cheating happened because of rationalization it's not if somebody is watching you're not you will be able to explain it to yourself then this closure is going to be ineffective because you're not doing it because of fear of being caught you're doing it because you're able to both do it and think of yourself as a wonderful honest kind human being at the same time which I am it's interesting that there's so much focus on disclosure I guess we'll know sort of longer term if it's really mattering well the sad thing is we will not really know because we're not comparing it to it so so what what we need to do is we need to be more experimental actually incredible to me right we're implementing all these disclosure policies without implementing any way to measure their efficacies what we need to do is ask some banks to the disclosures maybe to do something else and measure data being yet it not be tough experiment to say that at least in this country yeah and then thank you so much it's been my pleasure having the conversation I wish you best of luck with the book again fantastic new book go out and get it we go again goes a lot deeper into the this conversation a whole lot more about it's why we do what we do and why we do what we do and how we explain it and and rationalize and fudge things to feel okay with having kids in the world thank you so much I appreciate it

Channel: Jonathan Fields

Views: 27,080

Rating: 4.9550562 out of 5

Keywords: jonathan fields, dan ariely, good life project, predictably irrational, honesty, web show

Id: bGL_CWHP78Y

Length: 40min 33sec (2433 seconds)

Published: Tue Jun 19 2012