Placebos and Behaviour Change – Rory Sutherland

[Music] um this is a talk I suppose about placebos but it's not a talk about placebos in many ways because my contention is that everything is a bit of a placebo by which I mean that drugs work or possibly don't work at a pharmacological level at the level of chemistry but they also work at the level of psychology and some enough after I wrote the book alchemy I've been bombarded by emails the most recent one only yesterday by someone who worked in a in pharmaceutical research which said quite commonly if you produced a very successful drug they were testing I think a beta blocker at the time the beta blocker had highly significant effects on 80% of people however the placebo had highly significant effects on 40% of people now the interesting thing about medicine is everybody in pharmacology wants to distill out the bit that works through chemistry and get rid of or discard the bit that worked through psychology that is at least everybody in the West in Japan interestingly they take a slightly different view they argue that the placebo effect is also something that contributes the efficacy of drugs and treatments and therefore it's something you should welcome and encourage and try and magnify in the UK we're uncomfortable with it because we don't know how it works and it's something we try and actually effectively remove from the model now I would argue this is an enormous mistake because if something can work without us knowing why does that mean we shouldn't use it just to be obviously clear about this I mean no one knew how aspirin worked until about 15 years ago okay secondly if we were to be banned from using all the products of progress which were discovered by luck rather than by the scientific method okay we actually wouldn't be able to give ourselves penicillin a very large amount of scientific progress is actually made through luck and happenstance and random accident and so they're very interesting and very strange things going on for example painkillers are more effective if they're read okay sleeping pills are more effective if they're blue although according to one survey that isn't true in Italy okay now this is how strange against and one theory which I is purely a theory okay is that because they're national sports team is blue and usually two Italians the Azzurri they're called blue is actually a color of excitement rather than the cover of a color of somnolence um there's a big difference to the placebo effect if you give people three small pills rather than one big one that's another interesting fact but let's take this a bit further wine tastes better if you pour it from a heavier bottle wine tastes better who tell people it's expensive painkillers are more effective if they're branded and painkillers are more effective if you tell people they're expensive so I'm the only person in Britain who complains that you can't get expensive aspirin any more because my argument was I haven't got a 49p headache I got a two pounds fifty headache now interestingly nurofen in Australia got into trouble because they sold a whole range of variants of nurofen including European for period pain and it was nurofen for colds and flu which were chemically and pharmacologically identical to standard nurofen but they charged a premium for them and the Australian Consumer Rights Council or whatever it was took them to court and demanded they stop the practice if you're a chemist that's a good thing I'm not sure it's a good thing if you believe in the placebo effect because making someone pay more for a drug that says for period pain whether you like it or not will make that more effective at treating period pain than if you take the generic nurofen at the ordinary price but i said they didn't go far enough they should have had nurofen for people whose neighbors like reggae and i've lost my car keys again nurofen for removing stress but it raises really important questions here because if what how we perceive something and how we react to something not just emotionally by the way but also physiologically is affected not only by what the thing is but by the context in which we consume it you've got two choices you want either say actually this is kind of okay that we ought to encourage this because let's face it what's the job of a painkiller it's to reduce pain okay now if you can reduce pain with words rather than with chemicals who's to say that's an invalid thing to do now I understand that's an incredibly self-serving justification and defensive marketing to some extent but undoubtedly by the way you can make a longer taste better by doing good advertising for it okay lilt would not taste so good had you not been reminded that it was totally tropical okay but I'm not sure that the grapefruit strictly speaking is tropical but they didn't actually you know they didn't actually stick too much to absolute accuracy in the depiction of Lil to the Caribbean drink for that matter they don't actually drink on Bongo in the Congo as far as I know but it does actually alter the nature of the thing the enjoyment of the thing and therefore we come to a really interesting thing which is we can create value arguably in the mind just as much as we can in the factory now at the very end of the talk I'll talk about two strands in economics the mainstream strand of economics does not accept the psychological creation of perceived value because it's based on the idea that we all have perfect information and perfect trust and that we know exactly what we want to buy and how much we're prepared to pay for it and we know exactly how much utility we can expect from that purchase and therefore there's patently no need for any marketing because we are already purchasing optimally using our perfect knowledge and perfect trust in this imaginary kind of minecraft model of the world which economists have created and by the way that's why typically your finance director hate spending money on advertising because in his model of the world advertising is an inefficiency the only way you improve a product is you either make the product and objectively better or you reduce the price of the product during a funny ad campaign that tells people that the drink is tropical or gets them to associate the drink with Caribbean islands which undoubtedly increases enjoyment of lilt in reality to a finance guy that's cheating okay now just to be fair so he sees advertising is a necessary evil at best it's a cost to be minimized not a source of value generation there's a different School of Economics called the Austrian school Hayek von Mises people like that who took a completely different view they took the view that what something was worth was simply what the given individual might be prepared to pay for it and therefore you could create value not only by actually reducing the price that we're changing the product you could create value by telling a story about that product it's only a very simple story about how working in advertising sometimes very very simple Don Draper tricks really work so my dad is he's 88 now he loves factual television give him a drama can't stand the bloody stuff okay but give him something like Nazi mega structures or shots of the Serengeti and he's happy for hours okay now I spent ages trying to persuade him to get some sort of multi-channel TV which given that he lives on Welsh borders basically means sky okay all the more imperative by the way if you live in the Welsh borders that you get multi-channel TV because of course what if you only hold terrestrial TV one of the four is actually in Welsh which my dad doesn't speak he grew up in Riga but no one including it really spoke Welsh in the time of his childhood and it got to the point where I actually offered to pay to get him the sky' family pack and he said no no it's too much money in the time 417 pounds a month I said well I'll get it for you no no it's far too much money I said well it isn't seventeen pounds about this is it it's sixty P a day what difference does that make 60p a day is kind of 18 pounds a month I said yeah but you spent two pounds down newspapers so if you spend two pounds a day on two broadsheet newspapers spending 60p a day to get 200 extra channels of television doesn't seem that crazy does it what no I see what you mean and about a week date hey when did God sky with his own money I didn't even have to pay okay and he's now become this weird advocate going around all the other retirees of the of the why Valley going you really should have seen that Nazi mega structures on PBS + 1 HD or whatever it was okay and he obviously loves it and the same thing presented in two different ways can be good or bad entirely dependent on context and that's because everything is part placebo my grandfather by the way in trigger funnily enough was effectively at in at the very beginning of the National Health Service Corps diga is where knob Evan got the idea for the NHS from and my grandfather was a GP working for the trigger working families miners medical cooperative fund I think I've got that acronym right which was where everybody paid us as a set amount every week in return for free health care which is where I haven't got the idea from for the NHS and my grandfather admitted that to be honest before antibiotics came along as a GP you were about 30% doctor 70% shaman or placebo as much of your value is created by reassurance jollying people along getting to wrap up warm giving them confidence as much of your job as psychological as it was pharmacological and my view is that's kind of fine and in fact I mean the most reviled bit of political communication in the last 20 years was the Eddystone if anybody remembers it which was Ed Miliband's idea to put a load of pledges on a stone tablet now the end stone contained the line an NHS with the time to care now I must admit I saw that line and thought that was spot-on because your action - for example a hospital visit is not actually your emotional reaction is probably as much to do with the feeling you're looked after as it is to do with the actual chemicals you're exposed to now Nick Humphrey who's a psychologist at Cambridge has a theory around this which is that I'll share it with you and it remains a theory and I ought to be you know we all ought to be cautious about it but it seems plausible okay so we all evolved in a world of much greater scarcity than one we find ourselves in okay for most of our evolutionary history we were always at risk of freezing to death starving to death being eaten by things getting ill you know there are a huge number of risks which beset us and Humphreys idea is that we have a kind of inner finance director in our body that is responsible for the delegation of resources and so overly dedicating resources to healing in other words over investing in the immune system is actually dangerous in the evolutionary environment because if you're over invested in the immune system you could freeze to death in the night so Humphreys idea is depending on the circumstances our immune system will either work at full tilt all work in kind of first gear depending on how this internal mechanism whether it thinks it's safe to invest in immune immunity or whether it isn't now one very interesting obvious and true fact that would be true if this theory were true would be that people will get more ill in the winter than they do in the summer which seems to be the case and by the way despite lots of conflicting theories no one's quite sure why that would be if this theory isn't true and the reason for this is if the summer is a time of great abundance where you're not short of food and generally don't get all that cold in the night and therefore if you're in warm bright sunny surroundings it would make sense if this internal financial finance director or this internal accountant said let's spend pretty big on the immune system now because we can afford the risk we can afford to take the risk whereas on a really cold rainy day where your shivery and it's dark the natural tendency would be conserve resources as far as you possibly can and there is some evidence by the way that if you take I think it's hamsters not guinea pigs and you basically delude them as to what the season is that you can actually see that patterns of illness in a fake summer a much much lower among hamsters than in a fake winter and so that's the theory now is that theory is true actually if you are subjected stimuli like taking pills which you generally associate with getting better okay white coats taking pills people bringing you chicken soup ok all those things may be symbolic acts which you're internally are used to trigger an elevated immune response ok so actually how you treat people matters as much as how you treat people in some context again it's a theory but if you think about how much of what we do in our bodies is actually either part instinctive or completely instinctive heartbeat pretty much entirely in' you know we can't we can hack it but we can't control it ok breathing you can do both most of the time you do it without thinking you can consciously breathe you know if a GP is holding your testicles and asks you to you know you can do that weird breathing thing but most of the time we're not going don't forget to breathe Rory because otherwise you'll suffocate ok blinking another thing that's a halfway house pupil dilation entirely automated you can't actually consciously will your pupils to get bigger or smaller you can't go into a dark room or into a bright room so you can hack the effect obliquely but you can't control it directly okay you apparently you can dilate your pupils by looking at pornography as well I have no idea why that is an evolutionary response but who knows it makes you more attractive well that makes sense having larger eyes I don't know it might be one of those strange things Germans have a phrase bet algún don't they which is bedroom eyes which may be something to do with that lucky they didn't call it poor noggin really isn't it but that this is interesting because those things about our physiology and those things about our psychology which are not directly controllable I can't will my heart rate up or say pupils contract now okay I suppose sexual arousal is another one which is kind of a halfway house there okay I always like them to the automatic gearbox you can override them but most of the time what you do is you hack them does anybody here drive an automatic because everybody who doesn't drive an automatic oh no I couldn't possibly drive a lot about it because you don't have any control right the truth of the matter is when you drive the same automatic for any length of time you actually learn to control what gear it's in rather well because what you actually do is you go actually I don't want the thing to turn down you know to change down the top of this hill so you just release the pressure off the accelerator a bit and it doesn't do it so actually you learn to control it but you don't control it with a gear lever you do it obliquely and it's one of those things you kind of control through oblique means not direct means and I think um I think this is really interesting because we've spent so many years the last decades absolutely fetishizing those things that are the product of pure science and we've equally devalued and discarded these things which are the product of magic now I'll tell you a very quick story okay here's a placebo way to reduce NHS waiting times @na okay just just retell this I'm not making this up my cousin was nanny consultant for many years in Lancashire and here's the very true and interesting fact now do you want to reduce waiting times or do you want to in it reduce patient annoyance now that by the way is an important question and by the way the answer to it is probably both you know there were a massive inefficiency if you made NHS waiting rooms unbelievably entertaining right like the IMAX NHS waiting room so the people willingly spent days in ok with free coffee you would have a problem with efficiency and overcrowding so at some level you want the experience to be fairly quick but at the other level you want to minimize the time don't you in fact it's more important to have non uh knowledge of people than in there the difference between 45 minutes and 30 here's the weird truth okay if you get someone seen by a triage nurse the triage nurse says you need to see the consultant but I'm afraid there's gonna be a wait of two and a half hours if you then show them through into a different waiting room they're totally happy okay if you send them back to the original waiting room they're totally pissed off now funnily enough some quite rich companies do this I went to see KPMG and after you've arrived at their ground floor reception which is sort of marbled with dispatch motorcycle dispatch people coming in and you know and a lot of sort of you know not very comfortable furniture once they actually established that you're there for a bona fide e meeting okay they show you through to a mezzanine floor which has an espresso machine and a lot of sofas and copies of magazines and I noticed exactly the same thing as my cousin noticed in the NHS waiting room which is strangely when you're shown through into a new area and you feel you've made progress okay they were actually they kept me waiting for half an hour if I mean kept waiting for half an hour and reception on the ground floor I would have started to get a bit pissed off to be honest I was quite right enjoying marine there was good Wi-Fi they could have left me for another hour I wouldn't care and what that is okay is there's the bit of the brain that perceives the world objectively that cares about SI units like time you know and delet delay and duration but a large part of the monkey brain is kind of social and it's emotional and it reacts not to facts but to meaning okay and the interesting thing I suppose is that if you're shown through into another waiting room you feel you've been upgraded and if you're sent back to the original waiting room your monkey brain feels you've been rebuffed okay and the emotional outcome of those two different things is really really different so your mood is more driven by your inner monkey that it is by your inner timekeeper I think I think that's just I think that's just really interesting because you know a large part of the way we perceive the world this is a church designed by an architect somewhere in Florida we can't help but see it as a chicken can we okay it's now known as the chicken church this is known as pareidolia evolution as wired our brains disproportionately be alert to everything which has two eyes no nose okay that's why you see faces in clouds and that's because things with two eyes and a nose are disproportionately important they might be something we can eat or they might be something that's about to attack us but but also having that two eyes and a nose module probably helps us process facial expressions which any social setting I you know understanding whether the guys laughing or not laughing in that scene in Goodfellas you know wait what do you mean I'm a funny guy okay the ability to read that kind of thing accurately probably had a major determinant effect on them on survival and we're also I was in Ireland yesterday and I made the point that although there are no snakes in Ireland because some Patrick got rid of them all apparently you know Irish people are still frightened of snakes and the reason is that you're calibrated if you think about the calibration of an emotional response it's much better like a smoke detector okay you don't want a chilled smoke detector you want your smoke detector to be slightly paranoid but here's the downside of a paranoid weren't detector as it goes off when you get will you make toast and that's annoying but it doesn't kill you whereas a stone smoke detector which went a bit of a smoky thing is probably making tasting them whatever right okay okay the upside is it doesn't go off when you're making toast the downside is is you die in your sleep and so evolution also calibrates a lot of our perception playing on the side of safety and it calibrates our perception in the same way and it's more important that put very bluntly okay simple fact about evolution and in a few weeks time Robert Rivers is coming to speak at Ogilvy if anybody's interested I'll try and find the date at the end he's written a book on deceit and self-deception which is why he believes that our ability to deceive ourselves is actually fundamental to our survival as a social species because we need to delude ourselves in order to delude other people okay because someone who went around telling the truth all the time would be you know kind of awkward okay and so the point is that if evolution can get a two percent gain in Fitness at the price of a 10 percent loss in accuracy and objectivity it'll take that trade every time and similarly here's a beautiful case which where the reaction is what you might call part rational and then the the emotional kicks over now it's good to refer to the inner chip but these are actually monkeys to begin with and it's a fascinating experiment which shows that in the absence of any social context monkeys will behave quite a lot in the way that economists would predict would be rational okay which is if it's worth doing this thing I'll keep on doing it okay the second you introduce a second monkey a different mental module kind of kicks in actually what we really need to do in politics is to have a really interesting deep debate about what fairness really means to humans because it's actually quite complicated so I'll give you a weird example okay if you take this idea generally people on the right resist redistribution of wealth now the assumption is and by the way if you ask them they say it's my money you're taking it away and you're giving it to someone else I've earned this money blah blah blah blah blah but here's a really weird thing if you take the guaranteed basic income which is everybody's paid a certain amount of money by the state okay and that you you're basically paid enough to live on and then what you earn on top of that is up to you now what you earn on top of that is taxed at a higher rate okay to pay for the basic income what's weird about that is quite a lot of right-wing people quite like that idea Richard Nixon was in favor of it Milton Friedman was in favor of my grandfather the doctor and Rodrigo who is actually pretty rock wing fellow was also in favor of it now what's going on there I think that's very interesting because what right-wing people are muttering abut what they're saying is irrelevant okay what people say people don't actually the monkey brain comes with it basically controls your behavior through emotions it doesn't come with reasons attached okay and so what we do is we post rationalize appropriate reasons to explain our emotional predisposition but that those push rationalizations of why we don't like tax systems by the way okay are probably totally inaccurate in terms of the real emotional response because the guarantee basic income is quite redistributed actually it also poses the risk which is a risk by the way which people basically ten people will pull their basic income move to a big house somewhere really obscure where property price is really cheap and live in a commune doing nothing all day which will be a problem I think with the tabloid newspapers to be honest but what is interesting is why right-wing people probably don't mind it is because it preserves incentive structures just gonna mean which is that if a guy works 10 hours harder than the guy next door he's ten hours of work richer than the guy next door is and so it preserves a kind of desert idea which some forms of redistribution don't do I don't know the answer the expressions all I know is that it's worth doing lots and lots of thought experiments because the when people are describing emotions which arise in their monkey brain okay all they're really doing is coming up with a plausible sounding post rationalization they're not really describing what is the origin of that emotional response and anybody here know John Haight who wrote a book called the righteous mind he uses his analogy of the human brain as a rider on an elephant and the rider is the conscious bit the bit that does all the talking and the bit that does all the conscious thinking and the elephant is essentially the unconscious bit which makes most of the decisions and is effectively more powerful than the rider it's much stronger but the interesting added dimension is that the rider deluded Lee believes he's in control of the elephant and there's another analogy here as as which is the conscious brain thinks it's the oval office when in reality it's more like the press office okay that the conscious brain thinks it's making the decisions in reality it's doing what a press office does which is hastily constructing a plausible sounding explanation for a decision that was taken somewhere else for reasons it doesn't fully understand okay if anybody's weren't in a press office I think that's a fairly accurate description of what you end up doing you know we put our prices up oh how do I explain that oh let's say that war materials have become more expensive you know the mean and actually you know they have maps that's not the reason for the price rise but you can't say greed can you and so this is the problem okay that in politics and to a large extent in business left-brain what you might call rider thinking or elephant thinking dominates decision-making and weirdly when we design a chair we design it for the evolved shape of the human body now when we design a steering wheel okay when we design a door handle we design it for the evolved shape of the human hand we put it at a height where most people can reach it unless you're one of those people who have young children where the lock on the loo door is like six feet up in the air you know but basically we tend to put those things that are height where everybody can reach it and we design it around that the body shape that evolution has given us but when we design a tax program we don't design it around the brains that evil has given us we design it we get it designed by economic man you know who makes a whole series of assumptions about what people are motivated by now as that thing shows fairness is a very very deep motivation and we care not only about wealth economists probably only think we only care about utility and that the utility that other people are getting shouldn't concern us at all we should simply maximize our own now a fairly shallow observation of humankind shows that we care about relative things a great deal they used to be that joke in the 1930s which is a rich man is anybody who earns more than his wife sister's husband you're all doing that all the blokes are doing the calculation there aren't you very very rapidly but actually you know status is to a huge extent of course a relative currency okay it's not an absolute one and by the way that's I would find that quite sad because if you take fairly basic bits of consumer electronics if you've gone to lose the fourteenth with a 55 inch LED TV he would have given you half of France for that with me right and yet because everybody else has won we don't regard those things as magically as we probably should you know we've put you know we probably should spend more time sitting down going actually you know just from the context of my own grandmother this stuff is unbelievably cool and we rather sadly I think derive less pleasure from amazing things once they become actually more widely available which is kind of sad but this is a point made by Richard Thaler as a general rule the United States government is run by lawyers who occasionally take advice from economists others interested in helping the lawyers out need not apply and again the placebo element of government okay doesn't get a look-in you know what is psychologically appealing one of the things I said by the way which I think would work is someone rang me from one of the political campaigns and said what do you think about tax cuts I said they're rubbish I said what do you mean well that miserable after about two years nobody notices them anymore you just become acclimatize to the rate of after-tax income what are we much more interesting is to keep the tax system the same and rebate people every year a they notice B they get a lump sum C you now have a perfect point in the year in which to encourage philanthropic activity okay so you know it would be very hard to get me to write a 500 pound cheque to the NHS okay if you wrote to me and said you would do a rebate of of 1,000 pounds most people give at least 30 percent of it to the NHS how much would you like to give now to an economist those two things are identical okay they both involve the loss of 500 pounds to the human brain to the monkey brain they're actually very very different indeed in other words allowing someone to withhold a windfall causes much less pain than actually asking us to pay some money if you don't believe this probably anything you buy on a contactless credit card feels fourteen percent cheaper okay I think you've noticed haven't you as well it does feel you know that taxi experience is just a degree less painful now you no longer actually have to reach into your wallet and hand over a note and I think the trouble is that everybody in positions of decision-making a power to started to use this what I call the into the economist map and by the way it's not a totally terrible map but all maps by necessity contain distortions and the problem happens when everybody starts using the same map and they all use the same map for years and years and years eventually the distortions become more and more pronounced and they create greater and greater biases in behavior just really quick ones from the Tube map okay the central line is overused because it's red and horizontal so you look at the map and you go I want to get from east to west ooh look there's a straight line that's red that's doing that John okay the Victoria Line which is a very very good line but was added last to the map that's underused because in order to fit it onto the pre-existing map they had to make it look curved and there aren't many people looking at you map going how can I go round London in a roundabouts fashion okay it also leads to other delusional subset of people who live in Fulham think they live centrally okay because they're on the tube in my view it's so far west which have its own time zone but people who live on the tube think they live centrally so I'm not making this up some friends of mine or friends of friends of mine moved from Fulham to Herne Hill because they wanted an extra bedroom you're a really good tip for anybody here want property tips if you want to buy or rent property get a copy of the Tube map and ask yourself what isn't on it because everybody else is using the Tube map to decide where to live because they think it's a map of London okay it doesn't show Thameslink it doesn't show any of the south london rail network as a result of which North Londoners have no idea how people in South London get to work do they yeah I think North London's think the people's have the basically put their possessions in a red and white spotted handkerchief and tie them to a stick and sort of start walking in about 3 o'clock in the morning ok but the people who moved from Fulham to her and Hills you get an extra bedroom basically it had Hill in the name and it wasn't on the tube they were expecting deliverance pretty much okay okay you know they were basically expecting it squeal piggy you know as far as they were concerned and then to their complete bafflement on their first day at work they discover their commute took half as long as it had done from Fulham okay so there are a whole load of things which the map doesn't show but we the most common tourist journey undertaken on the tube is Leicester Square the Covent Garden now there are single tube stops up in the northwest that are probably four and a half miles in central London you have to massively expand distance because otherwise the station is when we said densely packed now and be able to read the map because isn't a map it's a schematic diagram the guy who designed it Harry Beck was an electrical engineer and he based the whole design on wiring diagrams and as a way of working out how the lines in to connect it does a pretty good job most of the time if you are going from a tube station to a tube station it does a reasonable job not always most people who go from Paddington to say someone on the central line tend to go round to Notting Hill Gate and which actually involves going quite a long way West but the map doesn't show a familiar dependence or central line walk to Lancaster Gate okay because it's downhill there's a good kebab shop on the way and there's there's a lift at Lancaster Gate but again the map you had that we would have no idea from that map that Lancaster Gate was an easy walk from Paddington and so what's happened is The Economist's map and what I might called the medics map the placebo free man has become territorial I have sort of turned my phone off this is really weird um this is become that maps become overused and the psychology maps become underused okay now I'm not suggesting that's just think there's no room for science around the place you know next time you fly on a you know on an aircraft you want some engineers to have done some mathematical work around the aeronautics okay next time I fly on a plane I don't want to think the people you know who are tightening the wheel nut so while the creative people writing let's try it a clockwise this time just for the lawls right okay but the fact that scientists get to this problems first define the problem in scientific terms which means using SI units time weight the distance you know what we know electrical conductivity and they define the problem in those terms and then solve the problem for those terms crates biases in problem solving because the psychologists are never allowed anywhere close and this is known as the McNamara fallacy actually which is that we tend to obsess about whatever can be easily measured while we're measuring an interest waiting times rather than NHS waiting irritation okay because it's easy to measure time but it's not easy to measure irritation now when I when I said about the IMAX NHS a an a yeah you know I'm only half joking by the way you know I'm only half joking I apparently became famous because of a joke and I told a TED talk which is rather than spending six billion making the Eurostar to Paris about fifty minutes faster what else could you have done that would have made the journey better but which an engineer would never have thought of and the first suggestion was just put Wi-Fi on the trains which they only did last year and my argument was first of all when you're using Wi-Fi you're not really conscious of time anyway okay my daughter has just introduced me to Red Dead Redemption and the PlayStation 4 and I've just discovered basically how to lose all track of time you know he suddenly realize you're in a pool of your own urine and it's 5 o'clock in the morning ok right but also it makes the journey productive rather than useless now if you want to compete with Airlines actually airplanes are really faster than trains but the reason people go on a train is because there's less around you get on the train you sit there for three hours you get off the train okay you don't have to have a taxi or a tube at either end you don't have to go through about seven security procedures and so Wi-Fi would actually be much more than knocking fifty minutes off the journey would be the killer competitive advantage over flying and then I made a joke I said if you wanted to you could Bank five billion of the six spend a billion pounds hiring all of the world's top male and female supermodels getting to walk up and down the train handing out free shotty Oprah truce to all the passengers you to save five billion pounds and people would ask for the trains to be slowed down and so I mean there are perfectly serious questions to be asked about NHS waiting times which is why do they do what cheese counters do you know they give you a number don't they airline check-in nobody's thought of this have they why do they make you stand in a row when they could say here's number 47 there's a cost of coffee over there right we've got text messaging it would know obviously you need to text people ten minutes before they're needed to make sure there's anybody got an emergency passport ever from from that place in Victoria it's weirdly non isn't it I don't know if you have the same reaction but basically they make you take a lot of numbers so you're sitting down and rather than standing up and you keep moving from one room to another and eventually they tell you to bugger off and come back in three hours time to collect your passport rather than making you hang around like a dog so we're the I went there and was basically you know practicing breathing exercises because experience of heavy duty bureaucracy is something we're inclined to cause me to go off on one you know and I was terrified he's gonna turn into a bit like that film falling down you know okay right and actually I went through the whole thing with my family and I didn't even get mildly irritated once and I forget someone's looked at the emergency passport system in Victoria and they've designed it around psychology not around McNamara metrics McNamara was the guy who fought the Vietnam War on the body count because he thought you needed a measure and therefore how if you didn't have anything you could measure now the body camp was a terrible terrible metric it might not have been a terrible metric for fighting a conventional war for fighting a guerrilla war it's an absolute catastrophe because arguably everybody you kill unjustly creates three volunteers so actually minimizing the body count might be a far better approach than actually trying to maximize it in many situations and so this is where I think we get everything wrong abarim on the SI units the units of measurement that people tend to use only one SI unit given the game away only when I signed it pays any attention to human perception at all and that's the that's the lumen because the lumen only measures light that's emitted by a light creating device or bulb that's in the visible spectrum and it's weighted towards that part of the visual spectrum that helps you to do intricate things like thread a needle or read a book okay because otherwise you could produce a light which had fantastic efficiency in terms of lumens per dollar hour but where everybody was bumping into the furniture because it was all produced in the ultraviolet spectrum so the lumen is actually perception dependent as a measure nothing else is there was a big argument about temperature because should the temperature of the atmosphere you know there's American forecasts that say you know it's 85 degrees Fahrenheit feels like 81 okay they had a big argument about this they said when you give the temperature for weather purposes shouldn't it be corrected for a the level of breeze and B the level of humidity because actually 85 degrees Fahrenheit whatever that is in the new-money okay 85 degrees depending on the humidity and the level of breeze and a bunch of other things can be a really Pleasant day or absolutely intolerable right I mean London if you remember when London went above 100 degrees I'm a fat guy I didn't even go into world okay right because I'm fat it's humid it's a hundred degrees I'm not going anywhere right strangely I can wander around Scottsdale Arizona and 100 degrees happy as Larry because it's very very low humidity and so there was an argument that said actually the essentially the scientific measure doesn't capture the emotional response and feels like is a really interesting question because actually you know if you think about it temperature is not a good guide the other thing by the way about weather apart for anything else with temperature it's also based on expectation right so in Britain I think this is true if it's a sunny day it's a nice day isn't it doesn't know what the temperature is you know that if there isn't a cloud in the sky it's a lovely day okay right that's the rules because I arrived in Johannesburg in their winter and it was a glorious day absolutely blue is everything ok came on the hotels picked up by some people's Road there with your hands blowing they said I'm sorry I had to arrive during some weather and I burst out laughing people are idiots right and they explained that actually for six months of the year Johannesburg never gets a cloud so all through their winter blue sky is basically that standard issue you know that that's you know that's not an optional extra that you get that standard you know okay and so the fact that it was very cold by which I mean it was about three degrees centigrade men's it was bad weather I generally couldn't understand what the hell they were talking about I thought they would be totally deranged but I mean actually to factor in what's a nice day you need about five or six other things other than temperature okay and like was since humans behave according to their feelings not according to objective measures right we don't look at our thermometer see that it reveals a high figure and immediately walk around in our bathing trunks do it right okay we react according to how we feel that's right does anyone else have the hysterical thing where you go somewhere like Portugal in the winter and you're wandering around in a t-shirt and the locals are all in like Canada goose puffer jackets right in after that's in the winter people wear fur coats I mean it's ridiculous you know okay but it's a fancy only chance you get to wear a fur coat I guess there's some sort of logic to it but actually how we behave depends on how we feel which is a mixture of context or whole variety of variables therefore trying to change behavior but only looking at the objective measures is a total mistake I always remember that lovely thing we remember that lovely top tip in vis which said save money on foreign holidays by simply putting sandpaper on over your carpet turning up the central heating and walking around the house in your underpants okay I've always wondered whether that kind of work so that but here we go okay now here you talk about you see what I mean about hack your metabolism this is some weird American product but just do it like wellness okay but I mean again can't get metabolism is actually what we're trying to do most of the time to some extent you know placebos hack the metabolism having someone in a white coat now this is a really mysterious thought anybody here in the health in the NHS or welcome to health okay now don't ever repeat that I said this okay ninety percent of people who go to the doctor and not going for medical treatment they're going for reassurance of people who have young children it's probably 100 percent and the motivation for going to the doctor is entirely if it really was meningitis I couldn't forgive myself okay now my suggestion that you could replace GPS with actors okay then have any medical training at all they're just going to be really reassuring right okay now it don't quote me on that okay but it would work okay anyway this is a total hack by which I mean the screen you're looking at right now right your TV okay produces a billion colors it doesn't it produces three okay that 55 inch flat screen by the way does anybody got into this business you can do Trainspotting over YouTube on your telly if you've got YouTube on your Smart TV there's a thing called live rail hub in the US where they've set up webcams at railway stations and you can just sit there all day and every now and then you go oh look a train okay sorry the reason I tell you this is because when you're working then you want a bit of background noise but not too much to distract you it's fantastic okay right what is going on here how can this telly produce a billion colors right the answer is it hacks your perception it hacks your epistemology um the the human eye has three types of cone they are differently sensitive to three parts of the light spectrum red green blue okay by producing those three colors in different strengths right our brain infers where on the spectrum that color lies and produces the color in our head right so color mixing is entirely a cycle phenomenon it's not a physical phenomenon if you mix red and green pixels right you don't get yellow pixels you get red and green pick sorry if you mix red and green photons you don't get yellow photons they're red and green photons they stay red and green okay the brain can't distinguish between equal amounts of stimuli to the red green detectors and yellow so it produces yellow magenta doesn't even exist at all in physics right so magenta is cobbled together by your brain because when you fire equal amounts of of basically red and blue but no green right the brain goes this is a total man because halfway between red and blue should be green but I can detect green and I'm not detecting any so it invents a color in your head that doesn't exist to make up for the basic the deficient system is the other thing about your telly is it species-specific ok when you bought your samsung telly it didn't say on the box optimize for higher primates ok and the reason it didn't say that it's because dogs don't buy TVs right but actually your dog thinks your TV is ok because it can only detect two colors and one of the colors is nothing like the Calla we can detect if you've got a pet pigeon it really thinks it's crap is you've made any hundred dollars of this washed out piece of right that's just pigeons to detect five colors and one of them is kind of ultraviolet ok so to a pigeon a gorilla on the other hand would go yeah pretty good picture right the reason I think this is important design is there people there things were attuned to and they're things we're not and I think economics spends a lot of time producing things effectively producing light in the ultraviolet spectrum in other words it produces things that economists think are great but we don't notice or don't care about and I noticed this one of the things I really protect a Silicon Valley it's not just a Conor of Silicon Valley's guilty of this ok if you talk to McKinsey or you talk to economists or you talk to people in the engineering background they think because he cannot has told them this that efficiency is a effective okay so if you could make something more efficient you make something better and I've always argue this isn't true at all because what you generally do is you define the function of something very narrowly you make the thing more efficient at delivering that thing you've already defined okay and you assume you've made it better and I call this the Amin illusion which is you an automatic door what mackynzie would do or what Silicon Valley would do is they'd go to a hotel and they go there's a doorman there that cost 30,000 times a year okay now we can his function is to open the door and we can replace him with an automatic door mechanism which will only cost you a fraction of the cost of the doorman so that will represent a cost saving but of course in reality the doorman isn't really there to open the door at all and yes he opens the door but actually he provides recognition for frequent guests he hails taxis he helps with luggage he does a whole bunch of functions he maintains the status of the hotel you can't really charge 300 quid a night if you haven't got a doorman you know okay he also actually has he also provides a measure of security you know hotels with doormen don't get vagrants sleeping in the doorway you know that kind of stuff okay and so well it's very easy to do is to define something very narrowly optimize that thing you've defined throw away everything else as if it doesn't count because it isn't captured by your metric and what happens you get rid of your doorman and six months later you're at rates fallen through the roof you know nobody wants to stay in your hotel anymore your most regular guests really miss Tony okay and you've actually made the hotel worse and actually a lot of Technology does this I'll admit this okay when the Kindle came out and when the tablet came out I thought okay that's it print media is basically dead who's gonna buy a book wouldn't even have a kid how many people when they first had a Kindle have the same reaction and that's because when a technologies new the things the technology can do that the old one couldn't do are very salient to us we go this is unbelievable I can buy a book I can get it delivered instantaneously ok and and it's totally immediate and basically every time I go on holiday or I have to go on a plane I don't have to have that Oh which book should I pack dilemma cuz I just take the whole lot okay and you're going in this Kindles amazing it does everything I could possibly on who is ever gonna buy a book but over time what you realize is that books mostly armed about that at all probably 50% of publishing his gift-giving and you can't really give an electronic book okay you can give a Kindle but you can't give an individual book about 50% of publishing is actually around Christmas to be honest it's really weird things about publishing by the way its majority female to a huge extent even really really weird things cuz I was discovering talking about publisher that um true life crime is majority female and its readership cuz I'm a bit of a true life crime addict and I always thought sitting there reading about you know the decomposing headless torso discovered in a stream you know rigor mortis had just set in blah blah blah I assume that kind of serial killer stuff was kind of bloke eat pastime completely the opposite apparently bit weird isn't it a bit scary really when you think about it but anyway but this this doesn't do what a book does okay just as an automatic dog doesn't do what this guy does and actually this doesn't do what a magazine does just to your examples the number of printed books now is higher than ever the use of electronic books is has basically plateaued okay it's reached a kind of maximum at a percentage of all books and I write for The Spectator the spectators paper subscription is higher than it's ever been now don't get me wrong okay daily newspapers on paper have been kind of stuffed weekly publications doing fine The Economist The Spectator they're all doing the week they're all doing really really well and partly the death of the newspaper actually makes necessary I think you know the weekly news periodical to some extent but we got to be really really careful about this because what we do is we define a problem we get an engineer to define the problem he defines what a book is in very Shmuel terms which is information provision solves for that and then you forget everything else just as an email doesn't replace the wedding invitation okay but you could information II would just go the parents of you know this sir and so so and so request the pleasure of your company at the wedding of their daughter you can send that by email doesn't do the job why because actually wedding invitation is going to be expensive because everything about a wedding is going to be insanely expensive because if you don't spend an amount of money that hurts okay it's just you're not really serious okay that's what an engagement ring is it's upfront expenses proof of long-term intention right now interesting what's interesting about this is costly signaling theory now a book called called the elephant in the brain by killing the similar and Robin Hanson suggests that about in a developed economy where people are no longer really focused on survival about 80 percent of our energy actually goes into signaling things that actually 80 percent of our kind of activity is self advertisement heavily disguised not least to ourselves okay and what you're doing when you have you know when you buy someone a present when you when you have wedding invitation it's got to be costing there doesn't have to be expensive if you've got no money but you're a talented musician and you record a really good song as your wedding invitation somehow managing to get the address of the church and the postcode to rhyme right and you send it you post it to YouTube and you email a link to that to all your guests that's a really good wedding invitation because it's involved something that's costly which is talent but if communication doesn't have either expense or talent or humor or rhyme or music or humor or bravery embedded in it it's a cheap communication because you haven't invested significantly in what you're saying or the other means of delivery just as if you got back to your desk of Monday morning and there was something there sent to you by FedEx you'd open it first wouldn't you because someone spent nine quid to send you that therefore they're not dick around okay and so there are things which only make sense if you understand singling and there are a lot of things which we don't trust unless someone does a costly signal first okay so you can have the best product in the world but if you don't invest a bit of money advertising it or making a lot of noise around it nobody wants it and I always made this point okay if you think about it spending money on advertising for a manufacturer is equivalent to betting money on your own horse if you are if you've got a friend who owns a racehorse and you ask them is your horse gonna win on Saturday everybody says yes because everybody says that right okay if they say come with me and they take you to the bookmaker and they put 5000 pounds on the horse to win that's serious information now because there's a cost to them being wrong an advertising where you have to spend the money upfront you only make sense if you genuinely believe your product is going to be widely and repeatedly popular that's true of a flower which is basically a weed with an advertising budget again the cost of the petals says to the bees you wouldn't do this unless you actually had some good nectar because it wouldn't pay you to spend all this effort on petals if I came and visited you found there was no nectar there and never came back it only pays if I'm prepared to go back to the hive and say wow lot of nectar over there and so because it doesn't pay to do a lot of advertising if you've got a bad product in fact the argument is that actually good good advertising kills a bad product even faster okay the what you might call the obverse of that is that good advertising is reasonably reliable indicator that you have faith in your own product now just to prove this point I always wanted to do this experiment where someone got a really really good product and advertised it atrociously just to prove my point now obviously no one's going to agree to do that but luckily I found two melbourne comedians who did something very similar they got the hottest property in the entertainment industry and they sold him in the crappiest way possible so they took [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Applause] [Music] [Music] [Music] [Music] [Music] pay to us and out of two hours 23 minutes including some presentations we finally found [Music] [Music] [Music] [Music] I'm thinking now the incredible thing about that is that if you they're charging to Australian dollars which is about 120-130 okay if you'd put an ad in the Melbourne age a week beforehand half-page ad okay you could have charged $200 and you could have had people queuing around the blog the interesting thing also is that when he finally persuades those people to go in he uses two or three trips tricks from behavioural science which is it's gonna get pretty busy later on he's only there till midday okay you both can come if you want okay they're all things which interestingly could be used to make things emotional easier there's a woman similarly you both can come what you want as long as you just got the Nobel Prize for economics it's only the second woman to be given a Nobel Prize for economics after the brilliant Elinor Ostrom and one of her findings was if you want people to vaccinate their children if you have two nurses and you allow two mums to go along with two kids that they feel much less nervous about it than if you make them go one at a time you can use something you find in a joke David Ogilvy said the best ideas come as jokes you can use something you find in a joke that works in that setting and you can deploy it in something really really serious like childhood vaccination in the developing world I find that really really interesting and this is the kind of thing which an economist would say was irrelevant the the whether you wanted your child vaccinated was to do with the cost of the journey okay but you know less the value of the vaccination but actually the emotional cost of the health thing isn't factored in to the economic model at all and the emotional cost is I'm doing something a bit scary and I'm going off on my own and I don't like doing something to my kid which everybody else isn't doing to theirs okay all of those monkey things are completely factored and what happens actually I have to say this if anybody's keen on being an entrepreneur one of the bits of recommendation is is there something about your imagined idea which is actually a bit stupid silly comical or weird because in many cases okay all the rational solutions have been tried problem with rationality is gets everybody to the same place if on the other hand you can stumble on something which is a brilliant piece of psychology which an economist wouldn't understand you might have a space to yourself and just I'll give you an example okay let's imagine you want to compete with coca-cola now for about 50 60 70 years coke has been the most popular cold non-alcoholic drink in the world apart from water and you get that in a room wouldn't you say we want to compete with coke well actually straightforward you need to drink the taste nicer than coke you've got to have a drink that cost less than coke and it should come in a really big cans so people get great value for money and every go yep that makes sense let's go and do that fantastic now the only problem of that course of action is that the most successful attempt to compete with coke in 50 years is that comes in a tiny can cost a fortune and it tastes disgusting okay now when I said it tastes disgusting they researched it they went to a company which only researches carbonated drinks and the company said this is the worst drink we've ever researched normally I'm you know normally research respondents say it's a bit cloying it's a bit too sweet for me maybe it's more for kids here they said things like I wouldn't drink this piss if you paid me to now interestingly I think the reason it works is because it's not a drink at all it's a placebo okay small dosage small cam says this is really powerful we can't give you a full-size can or you go do lollies okay high price remember weird taste drugs have got to taste weird right nobody wants to be given in the course of oncology treatment and say do you want strawberry or blackcurrant right we believe that drug drugs are effective in proportion now I never trusted nurofen milk because they were too tasty basically okay health food it's got a case to it weird hasn't that right wheatgrass will this tastes like so it must be doing me good right you can lick the underside of your Flymo and have much the same effect I suspect now Sebastian for those old people in the room is anybody remembers that as tonic wine the last chemical they introduced in Sebastian was actually a chemical that was just there not to taste very nice because if you're marketing it as a tonic wine it had to taste a bit weird for people to believe it had medicinal properties there's a weird thing going on with alcohol which is if anybody can solve this problem Dyanne trio is mystified by the fact that given how much we enjoy Bailey's we drink surprisingly little of it yes okay it's a bit embarrassing to admit isn't it but is there anybody who doesn't like Bailey's seriously kids but but but actually most people love it right okay okay there is not a single occasion that wouldn't be approved by having a glass of Bailey's but either we're embarrassed by the fact that it's so tasty or but then that's a monkey reason it's not a rational reason equally there are totally weird successes out there which totally defy logic okay I would argue in fact okay here's another billion-dollar brand okay Dyson now I'll admit they say I've worked in advertising for 30 years if Dyson had come to me and said I'm thinking of producing a premium vacuum cleaner around about the four hundred and fifty quid mark right I go don't give up the day job mate because if ever there was a distress purchase it was the vacuum cleaner wasn't it you only bought one because your old one broke or became rubbish or because you moved out of rented accommodation you had to buy your own and you grudgingly went and spent sort of as little as you could to buy an acceptable looking brand maybe there was a little bit of novelty there like a self-retracting power cable which you found AB you know which appealed to your monkey brain a little bit okay but basically it was a distress purchase and anybody who could spend five hundred could have a vacuum cleaned it probably has a cleaner in which case they don't give a anyway right okay genuinely I would not have predicted the success of this at all and yet my dad who's basically a bit of a tightwad has two of them okay I can't me now as for 400 quid for a hair dryer yep that sounds about right I mean those things were walking off the shelves weren't they now I don't quite know I have a theory about this but it's only a theory which is broadly speaking put on you don't get an endorphin rush from mid market retail okay you get a bit of a thrill from an extravagance and you get a thrill from a bargain in other words you get a bit of a hit from TK Maxx and you get a bit of hit from Fortnum and Mason's but you don't get a hit from the middle do-right and the only time I ever came across that in my own life it's purely a theory that actually you the argument is I'm gonna spend some money so I'm gonna spend some money I might as well get some fun out of it I went shopping for my wife for bedding okay and after about half an hour so can we make a deal here say can we spend one of two amounts of money nothing or a lot that doesn't make any sense okay look I'm kind of happy with our existing bedding it doesn't like bother me or anything and therefore if we spent 200 quid basically getting bedding that's just like our existing bedding but a bit new I've spent 200 critters I could have spent on a drone or something right and I haven't got much excitement okay if we spend nothing I can go and buy a drone on the other hand if we spent 500 quid I can get nerdily excited by thread count Egyptian cotton Hogg values mattress toppers and by the way Oxford pillowcases Citroen is which are pillow cases which have like a three inch rim of fabric around the outside which for no explicable reason a much nicer than the other kind everyone else agree if you've got a pillow case which just has that unnecessary fabric around the outside obviously you can't see because your wife's put for decorative cushions on top of it okay but for some reason and so you can then invest in the mattress topper and the sort of all-season duvet and the other and now you've got a bit of excitement home new now that's about only explanation I can make sense of I mean uber brilliant okay think of the NHS waiting room yet actually the really big idea behind uber was the map that we don't mind waiting that much for a cab if we can watch it coming the thing hate our chimp brain okay hates uncertainty much more than that hates duration so the best advice I think the most important thing I've ever said in 30 years of marketing life I said to British Airways if you've got a flight that's delayed okay just put an estimate of the delay up it'll make people okay right if you had delayed 120 minutes you make a phone call saying that I'm gonna be seriously late here okay you probably go and find yourself a lounge or a restaurant or a place to work bit of Wi-Fi okay Geneva Airport I got my hair cut right because a barber there right but you can find a way to kill two hours and I'm on the airport in the same way okay when you can look at the map and go oh look he's stuck at those traffic lights I'll have another pint a 12-minute wait isn't that bad when you don't know when the guy's gonna turn up you go insane okay he had the idea watching the James Bond film Goldfinger by the way the founder of uber in which bond has that little map in the dashboard of his dv6 with a dot which lets them track Goldfinger's car nice and that's what should happen when you order a taxi and there are other things too there's no there's no paper changes hand so when you get out of the car it's a completely seamless operation because it's contactless it feels cheaper than it really is because you never actually handover any money and there's a bit of ego does anybody else do this where you time your arrival onto the pavement to coincide with the car drawing up because it makes you feel like Keyser söze at the end of the usual suspects right okay now if you think about it in monkey terms okay walking out of a building a car draws up you get in okay that feels like a high-status action doesn't mean we're standing around in the rain going is that my car over there right or in one case mistaking boxing promoter Frank Warren before your taxi driver which is what mistake have made ones survive that one fortunately um okay but standing around in the rain going I don't know where my car is feels like a diminished demeaning activity okay yesterday we went to do some work with Dublin Airport on the psychology of queuing variance timorously college and killing duration isn't the big factor Disney knows what they're doing okay if you have little science going five minutes to go four minutes to go three minutes to go along the queue queueing is less painful because you've got a little mark of progress okay um a queue in which you keep moving is much less stressful in a relative to a queue in which you've grown to a halt if the end of the queue is out of sight people get really really panicked okay and finally if you really want to piss people off in a queue you have another queue alongside their queue which is moving faster than theirs that's that's the absolute death knell for a queue right and so the psychology of time we know this from linguistics okay it was the longest five minutes of my life or time flies when you're having fun time does not map neatly on to experience or emotion and therefore it doesn't map neatly on to behavior so solving problems by trying to minimize the time of something if you want anybody in marketing here if you want another really weird one and I don't understand this entirely um those those things where you deal with a company like Vodafone through live chat okay objectively it takes twice as long as handling the problem over the phone the reason they can't afford to do it okay I'm really gonna ruin something for you here is that most of them actually handling three people at the same time when they're doing live chat okay I don't know what their personal lives are like they presumably have like three wives or three husbands I just sort of float for her I don't know what effect that has on your brain spending your entire working day dealing with three people in parallel okay the weird thing is customers sodding love it okay it's actually objectively slow if you're measuring live chat simply on its objective things you go this is a terrible way to handle customer complaints oddly and for reasons I don't fully understand people the levels of satisfaction and the levels of kind of warmth and bonding towards the brand are absolutely massive go figure I mean this is what I'm saying okay we can't confine ourselves to doing things that make sense I mean what the right okay seriously okay it costs the same as a bottle of spirits but it's got no booze in it the family's got no booze it means you don't have to pay any duty which means their margin is utterly insane okay now I'm gonna be very quick here very few tips one of which is actually with placebos they're probably more powerful on certain individuals there are others okay that's just the interesting way of looking at it if you look at the average effect of placebos they're probably less exciting than they are for certain people under certain conditions looking at how you can maximize procedure effects for different people is therefore a really exciting area of scientific research I think and there's something about economics you know I said this is the science of knowing what economists are wrong about there's something about economics which causes everybody to look at things as if by average now let me just tell you a few things where I think that the economically rational and psychologically done some of you may have a thing called a nice sir and it's a tax-free sort of wrapper in which you used to be able to put 3,000 pounds a year okay and that was any gains from that were protected from capital gains tax it was a way of encouraging people to save and to encourage people to save more they increased the threshold from 3,000 pounds so it's now about 20 and everything about it you your wife or husband or partner can have another 20 and you can even have a nicer for your kids which is another six this is all three I don't notice it maybe it sings okay now let's just park for a second the fact that why on earth people who can save fifty two thousand pounds a year out of their after-tax salary really need help from the government okay because those people are probably going to be saving as it is okay so let's part that fairly obvious objection which i think is ridiculous by the way okay it also makes it much less motivating to people who can only save two or three thousand pounds a year because when you can only save three thousand pounds you have people who could save fifteen hundred quid thought I better put fifty on to quit it now because otherwise I'll have missed out on my three thousand allowance okay once you make it twenty normal people just go well there's no particular urgency I didn't put twenty in next year I put three and next year not six in next year so the brilliant psychology and the ISO which says if you don't put it now you know speak now or forever hold your peace which was an actual stimulus to get people to save was destroyed when they put the limit up here's an interesting one Weimar rising house prices always a good news story now this is getting into interesting and weird territory and I can apologize it's gonna get a bit nerdy for a bit but talking to some physicists I'm always intrigued to know what economists are wrong about because economists make a lot of decisions based on economic assumptions and therefore like the Tube map if you find out there's something the Tube maps wrong about you can find yourself a cheap flat right you know I mean I'm by the way I mean has anybody ever if the other thing to do when you're looking for a flat has anybody ever looked at an isochronic map so you put your place of work down as the center and then you have a slider which is the acceptable length of your commute five minutes 10 minutes 15 minutes 20 minutes in time and it shows on the map those places which were at that time it's very weird because they're placed in southwest London which are absolute dead zones in terms of getting to where my office is equally there are places well inside the m25 in southwest London which are much much longer to get to the office than places like Harpenden which happen to be on the Thames link line okay it's that weird strangely Ashford in Kent because of high speed one shows up long before some places inside the m25 show up but that's why I mean about don't you know when we look at a map we kind of assume that distance is proportion at the time and the nothing of the kind is true find out what the maps wrong about and you've got a competitive advantage so therefore I'm always fascinated there what economists are wrong about and one interesting thing about marketers is we are the only people in a business who say what's this like to an individual experiencing it over time okay so what would make me do this the first time what would make me do this the second time what would make me do this the third time because there are some products and behaviors anybody here use Accardo or sayings pretend grocery delivery okay the first three times you do it eery easier to crawl to a supermarket on your knees of a broken glass than to order online what's interesting about online shopping is the fifth time you do it it's a piece of piss right because it's got all your favorites you know everything you want you can basically do a whole kind of weekly shop I used to do this actually do you remember when planes used to make you turn your mobile phone off I used to do the on plane equivalent of supermarkets we'd okay well I'd have to do a whole weekly shop from Accardo before the steward s told us to turn our phones off and it was kind of a stupid competition to be honest beloved there we go but the point was that over time things are different okay economists don't and what this physicist is saying Olli Peters is that economics doesn't understand time because it deals with a snapshot average and the snapshot average does not relate to the individual time series experience okay now let me give you an example of this electric cars so I want to buy an electric car and test driving one actually next Friday and to be honest it's not like I care about polar bears they just don't really cool very half a joke by the way which is the way to sell people the way to sell people on any kind of environmental behavior is to make it a bit selfishly enjoyable and a lot beneficial to the public okay we'll do things if you can focus on a selfish benefit right then we'll do things that have a huge collective benefit but there's got to be a tiny bit of selfish benefit okay we don't do things with a wholly altruistic now let me just explain that okay Unilever and P&G probably did more for public health until the advent of things like antibiotics than medicine did because they encouraged people to basically practice cleanliness and hygiene and they produced a lot of products which had germ killing characteristics okay but interesting me if you look at how they sold soap in 1920 they didn't sell it on diaper soap and helped prevent a cholera outbreak that was the big social benefit right but they sold it on an entirely selfish premise which is if you don't buy pair so you're gonna die single it alone now I'm only half exaggerating by the way always the bridesmaid never the bride is a phrase that comes from a Listerine adverse event okay it was very very Darwinian the cell it basically said if you're clean you will enjoy a social advantage the mass benefit was much more important which was the collective benefit but they didn't sell it on that now what you do I would argue and I think the environmental movement to do this is what I call sending the soap you put a little bit of something in which makes it selfishly enjoyable struggling the pill if you want to use medical terminology and then the far greater benefit is collective but asking people to engage in purely self sacrificial behavior is absolutely fine for about 20% of the population but it doesn't get any bigger than that and I think there's a reason for that by the way which is a thing called counter signaling right if you're a Hollywood a-lister and you turn up to the Oscars in a Prius right nobody thinks you're doing that out of necessity they know you could afford a stretch limo and therefore the decision to turn up in a Prius is a very effective signal to the fact that you're you know that you care about the environment ok if you weren't for Pizza Hut and you turn up at work on a bicycle doesn't mean you care about the environment it means you can't afford a car ok so there's a high-status group of highly educated people usually in very cool jobs usually who have a huge amount of social status occurring them to other things for whom self-sacrificing behavior works ok the problem with that approach is it doesn't scale because what what look if you're the mayor of London cycling to work sends a really powerful signal ok and it feels damn cool doing it right if you're actually you know in a lower status occupation doesn't send the same signal at all and so once you understand that dynamic I think one of the things you realize is that if you want the behavior to become widespread you need I don't think that's difficult because what's the benefit ok we can decide whenever we get people to pay attention - that becomes important if we get people to pay attention to the bit that's actually a selfish advantage they'll think that's important and that's what they'll do okay I know it's a bit weird but I mean now here's an electric car example okay so I want to give an electric car and so I go along to the electric car chaps and they say great time to actually choose an electric car because the government gives you a sort of 5,000 pounds subsidy of a purchase price and it's very tax efficient leasing deal so go brilliant I'll get one of those but again actually I don't need an electric car until I've got one of those seven kilowatt charging posts at home because I don't want to buy a car and then spend the next five years with an electric cable coming out of my bathroom window okay so I ring up the people and say can you install one of those seven kilowatt charging things please and they said it's a great time to get one of those installed because there's a 300 pound subsidy from the government where they pay for half the cost of installation so again hit me with one and they said no you got to prove you an electric car first and what that means is no wonder the Department of Transport has red caps 22 basically okay now I went to them and said look actually to be honest you don't need to subsidize the car that much if you can encourage anybody with a suburban driveway to get a seven kilowatt charger in their driveway and you can get them to pay a few hundred quid albeit heavily subsidised to install that thing which is desirable anyway because it means their mates with electric cars can come and visit ok but if you paid 300 quid to have a seven kilowatt charger on your driveway your next car is going to be an electric car isn't it because you feel a bit of a buying a diesel right so if you understand path dependency you can actually encourage people to move to electric cars much more quickly and much less expensively than if you're an economist and so this is the point about the path dependency of NHS waiting if you send them back into the original waiting room they're upset if you move them into a new waiting room they're happy here's my most contentious one so first of all I'm skeptical about high-speed too let me explain why okay high-speed one is a really good idea if you want to spend money on transport it should be one of two things it should be quite useful to a huge number of people or unbelievably useful life changing to a smaller number of people right now when you calculate time savings for a model the transport economists use all you measure is aggregate time saved now high-speed one if you live in anybody here live in Canterbury Ramsgate Margate anyone like that okay if you live out in East Kent right high speed one has changed your life because it now means you can commute to London but just Canterbury used to be 90 minutes and you could only go into Charing Cross now it goes into some tankers and it's about 58 right total game changer because you're saving half an hour four hundred times a year assuming you traveled into London 200 times a year that's saving you 200 hours a year that's like eight days that's a total bump more of waking time that's a fortnight okay total GameChanger and the problem in high-speed too is that nobody travels between Manchester and London that frequently so instead of now saving one person 200 hours a year is a big deal saving 200 people one hour a year is just a mild convenience now the model doesn't distinguish between the two but I think they're totally different and I travel to Manchester more than probably all but 4% of people in the UK I probably go five or six times a year okay saving me an hour each way even if you can do that on the journey to Manchester well okay it's a bit of a convenient it's bit of a novelty but okay it's not changing anybody's life is it I've never woken up in the morning on I would go to Manchester today but it takes now too long right it's not really going to change my behavior and my argument I said yes I said very simply I said why are you spending 60 million you want to reduce journey time to Manchester and you want to increase the capacity of the network okay and you've got a budget now of 60 70 80 90 billion pounds I could do the same job for you not to the same extent but I can increase capacity of the network and I can reduce journey time and I can do that in six months with a budget of about a million pounds and they said have I said it's really easy every time I go to Manchester you booked an advance ticket don't you because if you don't it costs a million quid right and because you booked an advance ticket you have to leave a huge margin of error getting to Euston because if you miss your train because you get stuck on the tube your ticket becomes worthless and you have to buy a full fare ticket for a million quid now by the way I've said this repeatedly to rail companies are in a monkey thinks that's a Kong I think if you have to buy a full fare ticket because you miss your train they should deduct the thing you've paid for the the advance ticket I think that's just what monkey thinks is fair okay because making people pay twice you're penalizing them twice and I don't think you should do that I think monkey just sees that as exploitation but it not every time I go to Manchester I arrived at Euston about 45 minutes before my designated train leaves in five minutes and twenty five minutes from our arrival two trains leave for Manchester twenty and forty minutes before my own train which are half empty if you want to reduce my journey time to Manchester hour forty minutes just give me an app that says I'm it used to now and the train company says Paris five quid and you can go in cj8 in the train leaving in five minutes okay one you reduced journey time to Manchester - you've reduced the shitty bit of the journey which is hanging around at Euston like a not the nice bit of the journey which is sitting on the Train looking out of the window which is fun okay so you reduced my journey in its worst aspect but you've also increased capacity why because it's good practice in yield management to always allow someone to travel on an earlier vehicle right if there's free capacity on an earlier departure to maximise the capacity of network you should always allow people to jump forward right if you don't noticed if you've seen the Americans evacuating the American embassy compound in Saigon by helicopter okay they got as many people on each helicopter as they could didn't they they didn't say no sorry mate you're booked on the 12:30 right right that would have really pissed people off they didn't leave with a half empty helicopter going no I'm terribly sorry you've got the wrong kind of ticket okay so you could achieve both those ends I'm not saying you could achieve them to the same extent but while you're spending 60 billion solving the problem of the engineering before you even tried spending two million to part solve the problem in psychology it genuinely doesn't make any sense so anyway I'll skip very quickly to the end why we're rising house prices always a good news story because economists look at the world in aggregate and they say on average household wealth is increasing so therefore everybody's kind of happier no it doesn't work like that but it's for 90 percent of your adult working life you want house prices to stay fairly flat why because your next move is either your first home or a bigger home than the last home so if house prices stay fairly flat the difference between your present accommodation and your next accommodation remains relatively small if house prices go up the next house you want to move to the gap becomes bigger and bigger right so house prices rising house prices are a massive pain to ninety percent of adults and an insane lottery win to that tiny proportion of adults at the end of their life where they're planning to downsize or like you know move to Spain or something so something that's bad news for 80 percent of people and very good news for 20 Center people is not good news but to economists they thought it was nobody says hey great news if you've got a full tank of petrol petrol prices are going up do they right she go again yeah I bought it yesterday losers right nobody does that with petrol but with housing they did okay and so this is because there's a fundamental mistake in that we tend to look at everything through an aggregate average in a single time period not through the eyes of an individual over time and technically there's a lot of maths about this which is about ergodicity okay this is a bet where heads your wealth goes up by 50% tails your wealth goes down by 40% now on average across for people that's a good bet okay or cross a hundred people it's a good bet but is on average wealth gives up by five percent every time this is what happens okay so most of you go that's really good bet so every time I toss a coin heads means I get 50 percent richer and tails only means I get 40 percent poorer Wow I'm gonna get rich now first coin toss to people end up with 152 people end up with sixty so half of the richer half of the poorer but on average the net wealth is now 420 pounds on average they're now five percent richer because they got 105 quid each on average toss the coin again you get one person who's hugely rich you get two people who are poor than they were when they started and the third person is seriously skipped in fact this guy now has to throw three heads in a row just to get his initial stake back so what's a good bet from an aggregate perspective is a bad bet for an individual perspective and it looks as though economics doesn't understand this distinction whereas evolution does which is why we're disproportionately cautious in decision making so the way we look at risk is not the same as how most economists look at risk the way we look at expected utility is not the way that economists do and in many cases what economists call biased or irrational behavior was actually just because evolution did a better job of calibrating the maths did so I won't give you all the ogre disti thing except to say that under an honor Dalek time series and the multiplicative dynamics low variance is a good thing two times two times two times two times two times two is a bigger number than three times 1 times 3 times 1 times 3 that was one right very simple bit about one of them 64 the other was 27 in additive dynamics doesn't make any difference does it well 2 plus 2 plus 2 3 you know is exactly the same as 3 plus 1 sorry 2 plus 2 plus 2 plus 2 is exactly the same as 3 for 3 from multiplicative dynamics low variance is good I'd argue as humans we don't know it but our monkey brain is calibrated towards low variance which is why mcDonalds is the most successful restaurant in the world it's not cuz it's very very good it's because it's very very good at not being terrible ok now if you think about it ok it's not Nitin no one would take someone to the dogs on a date that's what Nando's is for cause ok it's not the place to show but if you just basically don't want to get ale and you don't get ripped off and you want to be sure your kids will eat the food and you want to be sure the toilets will be ok and you want to be sure that the food's reasonably fresh and warm it never fails ok it's unbelievably good at not being there now I've had the shit's from Michelin star restaurants you know probably one time in 6 ok never never got a leading McDonald's tall never the slightest ill effect ok do you know what she's saying baljeet's for two weeks before he competes in the Olympics chicken McNuggets that's it right why does he do that he says right I'm basically the best runner in the world ok the only reason I'm not gonna win is because I make a mistake there are two mistakes I can make not enough protein and getting ill food poisoning is food poisoning is the real cure you try and get too clever with your diet as an athlete and you end up getting ill that's how you lose ok so he's saying both basically pitches up and has a load of chicken McNuggets because you ain't gonna get him and I would argue that habit okay going with the crowd social copying with and habit which habit if you think about it is social copying sort of in the dimension of time rather than events to one place all of these things we do are basically instinctive behaviors because they minimize variance of outcome and I'll argue that brands are the same thing you pay 200 quid extra for a Samsung TV over a TV made by someone you've never heard of not because you think it's better but because you think it's bound to be somewhere between okay and pretty good whereas the TV you've never heard of could be somewhere between brilliant value for money and a crock of and we instinctively go for outcomes which have relatively no variance because that's the rational way to maximize your time series quality of life so I'll end very quickly on this except just to say that when you don't admit psychology and problem solving you use economics and you use physics and engineering and the terrible thing about those Sciences they don't allow for magic okay thermodynamics there's no magic in economy in economics no such thing as a free lunch in psychology there's magic all over the place in psychology you can make something crap amazing by telling a story about it okay when they this is a thing called Carnot theory which is the model of product design there going to be a bit careful about this about time okay coño theory says that products are perceived in three dimensions there's basically what you might call threshold attributes that's something where if it doesn't do that basic job you won't buy it again a milk carton that leaks fails to meet the basic threshold for milk okay but nobody ever comes home and goes brilliant milk the carton doesn't leak that's what you expect okay then there are performance attributes that would be something like sound quality in a cassette deck okay the reason I'm saying cassette deck not digital music player will become clear in a moment then there's something which is weird there's a linear relationship between sound quality battery life other things like that and happiness okay then there's something which is called an excitement attribute which is often surprisingly irrelevant to the main function of the thing you're supposed to be producing so to give an example and excitement attributed those of you who are old enough will remember buying cassette deck in the 1980s and then logically what you should have done is you said what's the battery life like the build quality sound reproduction is that good you know you know what you know is this you know is this reasonably loud does it distorted higher volumes did you do any of that now you press dejected me and if the eject mechanism hissed and word with the pneumatic damping mechanism you thought what a brilliant cassette deck I have to have that and if it just went clack you went that's a piece of I'm not gonna give that house rub and you can do that all over the place you know the first thing an accountant will kill is the excitement attribute because it looks to him irrational and irrelevant when they reopened some Pancras station how many people remember this ok Freud communications in every single press release mentioned the fact that some Pancras station had the longest champagne bar in Europe right how do you remember this ok it's not even predict I mean nobody cares right nobody ever goes on TV Angela champagne by this evening do you know any long ones or I used to get I used to go to that champagne bar but it just is long enough it's a superlative ok it's a totally crap toast right but it's a carnival bit exciting about of you wood breaks you go I'm gonna go and have a look at that and it tells you that this is a station that's actually a destination in its own right and it's a meeting place not just a utilitarian transit hub and as a result you might want to go there even if you don't have a train to catch and that's a brilliantly irrelevant wacko thing now they spent more money on London Bridge station everybody how many people know London Bridge station they completely forgot to add that one bit of magical bollocks than name ok they spent a billion pounds on the new London Bridge ok and the simple fact is if I mean if I mean in charge that London Bridge station really really easy all I'd say is ok we're gonna have two shops that aren't there to make money they're there to be really cool ok so what we're going to do is when you get rid of one Oliver bonus because there enough of them okay I think oncologists should study on it Oliver bonus for the speed at which something can spread unnecessarily to be honest it makes it makes no sense to me right by the way did you know when I suggested the idea for high speed 2 about you could board your train 40 minutes earlier an engineer actually said to me they said yeah but if you allow people to board their trains faster we lose retail sales I said holosync you mean you mean to tell me you're spending 70 billion pounds to prop up Oliver bonus because I think there are cheaper ways of doing that right now what I would have done is I said okay we're going to have Europe's largest florists and as you come down the escalators in London Bridge there's getting me a massive carpet of flowers and it's gonna be fantastic and we'll let them have the thing rent-free as long as they're open for really long hours and it just becomes down so everybody they what do you think of the new London Bridge station the flowers are really starting cool right yeah just do something really really weird okay and actually it's really difficult to do because the finance director will kill that the first thing he'll kill is you and your sodding florist right but consumers that's what they noticed that's what they care about the longest it's not even that long is it really when you think about I was expecting something where you could see the curvature of the earth you know it's like 15 bloody seeds anyway tell a story you can make things good I mean there's coming into land easyJet flight Gatwick right and the engines wind down and all of us we're about a mile from the terminal building and all of us have the same thought which is all it's gonna be a bus and you always have the same thought on the plane right now the pilot was an absolute genius because he said I've got some bad news and some good news he went till we'd lack you don't to hear that at 30,000 feet we landed okay right I've got some bad news good the bad news I won't be able to get you an air bridge because there's a plane blocking the gate but the good news is the bus will take you all the way to passport control so you won't have far to walk with your bags oh that's always true isn't it I'm sure I'm quite glad there's a bus so he made us think of the bus as a conveyance not as an inconvenience next on a plane you can do the same thing if you just say I'm quite glad there's a bus actually because you can end up with a huge walk to your passport control and baggage reclaim and the bus drops you right next door you've just synthesized happiness and everybody in earshot okay that's what advertising does top line that's an ad for bloody hurts right you flip human attention so it's about our attitude to our customers not about size it's now an ad for Avis get someone to pay attention to a different dimension of comparison and you can make something good that's what q-not had to do right jet engines came along they were competing for the blue ribbon how fast can you get a liner across the Atlantic overnight that became totally irrelevant because you could do it by plane in a day what do they do they got people focused on why the journey was actually enjoyable change people's focus of attention and you can make a weakness of strength the Eurostar is slower than flying which it still is probably end to end okay certainly trains are slow on the aircraft but actually if you get people to focus on the quality of time I plum gas in seats in central London get on with whatever you want to do eating drinking Wi-Fi remove us from seat in Paris job done uninterrupted free time get people to function on the quality of time not the duration the Eurostar wins okay so you don't need to improve the objective qualities of something you can improve the subjective qualities of something and then get people to look at that instead and so here's an interesting just a tiny little end end piece that I'm kind of running out of time Hannah Doerr overrun I think you can solve training overcrowding in two ways okay one overcrowding on trains does not distinguish between ten people who have to stand 100 percent of the time and a hundred people who have to stand ten percent of the time because it's an average now I'll add you psychologically there's a totally different every time I get on the tube I have to stand ten percent of the time doesn't make me angry I just find it in the happens draw right okay if you bought an annual season ticket and you end up standing every day you rightly feel robbed and seriously pissed off therefore if you want to reduce train overcrowding you should focus your of your efforts not indiscriminately on a monolithic problem you should focus on the people worth worst-affected I said if you just run from let's say Tunbridge Wells to I mean I don't know where the bad overcrowding when the bad overcrowding is because I travel in late you know that jokingly said Americans didn't like this talk you know Swiss Tony right okay the character comedic count no dare if you don't because I made this part of Twitter that traveling on public transport is like making love to a beautiful woman you just have to do it at a different time to everybody else okay now just to be clear about this but is like making love to a beautiful woman is a Swiss Tony quote from America from a British comedic show of the 1990s okay a whole lot of Americans on Twitter who had no idea we're reporting me to Ogilvy for gratuitous sexism I'm terribly sorry okay so just explain the context on that one so I didn't lose my job okay but my problem was if you ran special trains at peak times to a day exclusively for people with annual season tickets okay right so that anybody with an annual season ticket was more likely to get a seat than anybody without in the annual season ticket okay ninety percent of the psychological problem can be solved at five percent of the cost of solving the problem for everybody secondly ask yourself a psychological problem why don't people aren't standing on trains because I don't know the answer to that question by the way a lot of people choose to stand at a pub don't they right now one thing is if you've got somewhere you can lean standing is a lot less irksome isn't it if you've just got a Ledge right standing is kind of alright because you can regain your balance if you've got to hold on to a post it means you lose the use of one hand so you can't read a book you can't look at your phone you can't look at a tablet you can't do anything right so that's my first point what if you designed to train so that people would choose to stand up because there was a trade-off between sitting and standing you remember I said that we perceive things relatively okay um at the moment if you get a seat on a train you've won the lottery and you've got a plug you got a tape put your laptop down you can put your coffee down you get a few out of the window you got a place to put your bag and you go to seat right if you don't get a seat and it's red you get all right you're standing in the middle you lose the years in one hand you're worried about someone nicking your bag or treading on it you can't use your phone there's no way to charge your phone everything's shite right what if you redesign the trains for the seats are in the middle so all you get is a seat and maybe a cup holder and then you have leaning bum rests all along the outside of the Train which have a Ledge for your laptop to USB charges of you over the window a hook for your bag I think half the people on train will choose to stand for shorter journeys oh they'll go I've been standing at my office all day I've been sitting on my desk in my office all day wouldn't hurt me to stand for 25 minutes I'm not talking about 3-hour jets and look talking about London to Edinburgh right I'm talking about commuter journeys if you designed it so there was a 50-50 trade-off between sit or stand okay you can actually get people to stand as a choice and then once they can tell a story that it's a choice not a compromise they're less angry about it because they tell themselves a story that is what they wanted to do all along Aesop's wanted that well the earlier psychologists if you think about ESOP the Fox and the grapes it's called adaptive preference formation that quite often if we're forced to adopt a rather than B will look for reasons why we always wanted a or a lot provided we can find some if you give someone a case where they've got to have B and there isn't a single story they can tell as to why B is better that's when people get really upset so we perceive things relatively we perceive color relatively if you color the join on the Left you'll see that actually the bottom is exactly the same shade of grey as the top your brains making it white to compensate for what it imagines is some sort of shadow as I said evolution would rather have Fitness than it would accuracy it's weirder than that you right now I said that wine tastes better when you pour it from a heavier bottle try this baby [Music] we'll be more body by sense our brains reward job being sensible [Music] [Music] has to change in everything you money never get involved [Music] because what you're seeing everything is effectively interrelated okay we think we can separate what we hear from what we see now okay wine tastes better when you have a bottle your car is a much better car when you've had it validated isn't that okay I'll clean okay take your car filled car wash it's not just a cleaner car it drives better it's smoother it's quieter the rides better everything about your car becomes better it's a placebo car right so my argument is you can try and dismiss this or you can use it I mean interesting questions about how you make things emotionally congruent that's all it is we design seats for our evolved asses we should design loyalty programs or customer service for our volunteer a more complicated than that not least because there are tons of things which aren't economic at all the fact that I didn't fix my dish by washbasin by the way anybody had got a japanese-style toilet best thing you can ever buy seriously and I'll explain why in a second okay but but if you're Japanese or Muslim you're excused because you have proper approach to actual anal hygiene but the toilet gaijin in the West you have filthy ideas of using dry paper completely failed to spot this obvious technology nothing to do with economics to do with culture okay 71 percent of toilets in Japan clean your ass okay right in the UK I think 1% of Toto's sales are in Western Europe now that you've done nothing to the economic stock because Western Europe's poorer it's just a cultural thing okay why didn't I fix my wash basin if I could have man paid 200 pounds what swipe the card over it had it replaced instantaneously I would have done it the day it happened okay it's the coordination problem of getting a plumber on a day when you're off it's the pain of all that coordination right and so there are loads of things which can't beat up video conferencing we should use it much more for in mental reasons but also for selfish reasons as well because it's really easy right okay if I have a 7:00 a.m. meeting at work or an ATM waiting at work it drives me bloody and saying because I've got to get up then at 6:00 in the morning or 5:00 in the morning the trains are crowded everything's right tip for blokes I don't know what the female equivalent is if you've got an 8:00 a.m. videoconference from home put a cardigan on over your pajamas you'll get away with it okay right so you get straight out of bed video code everything about video conversing zoom blue jeans the software's now brilliant we should be using it 10 times more than we are I don't know why it's not economic because it's free for God's sake right it's practically free it saves you a fortune I have a hunch that the great mistake the videoconferencing made is the comparative frame it shows it sold itself as the poor man's air travel not the rich man's phone call okay so it was kind of like what your Junius that was like having a pager when your company didn't trust you with the mobile phone you know I mean we won't send some of the frankfurt because he'll probably empty the minibar and watch a porn film in the hotel so we'll trust him to go down to a basement room where he can stare at Jurgen on a bad screen in a windowless room for half an hour okay it was like the crap version of British Airways not the posh version of British Telecom and I think because they sold it that way it's always been seen as an inferior substitute to something else this is a brilliant product called the meeting owl it's about 800 900 quid it's one of the greatest things you can buy it's got a 360 degree camera on top so you plunk it in the middle of the table an AI camera work focuses on whoever's talking if anybody who has meetings attended by remote people it's a complete game-changer okay and then along the top there's a picture like Leonardo's Last Supper of everybody in the room so everybody know that joke Jesus goes into a restaurant says table for twenty six please and the maitre d goes but they're only 13 of you and she says I know we're all going to sit down on one side I'll end very quickly this if you change the comparison the context the story the area of focus you change the perception of the product and you change the value of the product this is why I love rings what Mises said there's no sensible distinction to be made in the restaurant between the value created by the man who cooks the food and the value created by the man who streets the floor he explicitly means marketing and advertising that when you that in order to sell great food it's not enough to prepare great food you actually have to create the context in which it's possible to enjoy it if you change the context in which people do things you change what they do if you want diversity in employment if you hire people in groups you get it automatically hire one person at a time people go for conformity if you had ten people at a time people go for complementarity you'll get cognitive ethnic gender diverse feel that all forms of diversity automatically as a product of the choice process if you hire people in groups if you get people hard one at a time you get the opposite okay and finally this is the great problem ok that rational people dominate defining the problem and they dominate essentially the evaluation of the problem and it doesn't matter that creative people when you have creative idea I have to present things to rational people that's only fair the problem is it never happens the other way around you never get a bunch of accountants going all this seems to make sense but before we present it let's go and show it some wacky people to see if they've got an alternative idea nobody planning hs2 for a large engineering firm would be asking the question can we solve this problem psychologically that's what we do that's us that's who we do it for and that's the book in which it explains how to do it thank you very much David [Applause] you [Music]

Channel: The Weekend University

Views: 15,517

Rating: 4.9376945 out of 5

Keywords: the weekend university, psychology lectures, psychology talks, psychology lecture, Placebos and Behaviour Change, Rory Sutherland, Using placebos to change behaviour, Psychology of placebos

Id: B2Bafx7xyRw

Length: 117min 58sec (7078 seconds)

Published: Sun May 31 2020