Full transcript: Dan Ariely on London Real
4:42 Brian Rose: This is London Real, I am Brian Rose. My guest today is Dan Ariely, the world-renowned behavioral economist and three-time New York Times bestselling author. You assert that humans are not as rational as we think we are, yet this irrational behavior is also highly predictable. You’re a professor of psychology and behavioral economics at Duke University, and your TED Talks have been viewed over 10 million times. Your latest book, Small Change, Money Mishaps and How to Avoid Them, delves into the truly analogical world of personal finance.
5:12 Stan, welcome to London Real.
5:14 Dan Ariely: Love to be here, lovely to be here.
5:16 Brian Rose: Great to have you here. When you come to London, I’m curious, do you see little pockets of irrational thinking? You must see that when you go to different countries and watch different cultures and say, They’re doing this that way.
5:30 Dan Ariely: So it’s really interesting to think about cultural differences, and it really depends on the level in which you observe our irrationalities, and I’ll tell you what I mean. When it comes to basic behaviors, think about visual illusions, we’re the same world over, right? But as the behavior gets more complex and more embedded in a particular context, then it becomes more differentiated by culture. And here’s an experiment. We’ve done lots of research on dishonesty.
6:03 We tempt people to steal money from us. And the way we do it one way is we take a die, a six-sided die, and we say to people, “‘Toss the die, we’ll see what it comes up on, “‘we’ll pay whatever it comes up on. “‘It comes on six, you get $6, $5, and so on and so forth.” But you can get paid based on the top side or the bottom, top or bottom. You decide, but don’t tell us. So keep it in mind.
6:27 So I give you a die, and I say, Brian, think top or bottom, don’t tell me you have it, yes? Now roll the die, and let’s say it came with five on the bottom and two on the top. And now I say, what did you pick? If you picked bottom, you say bottom, and you get five dollars. If you picked top, you have a dilemma.
6:43 You say the truth, top, and get two dollars, or do you change your mind and say bottom? And the point is that it’s in your mind, but there’s no evidence for it. You can say something different. And we get people to do it 20 times. So every time they write on a piece of paper, the die came on five and two, I chose bottom, I deserve five, the die came on six and one, I chose top and so on.
7:03 And when people do it 20 times, you find that people are extra lucky, people cheat. Lots of people cheat a little bit. Now this game, we took and we played it in lots of countries. So I grew up in Israel, we played in Israel. What do you think the Israeli cheats, more or less than the Americans?
7:21 Brian Rose: I don’t know if it’s the same.
7:23 Dan Ariely: It’s just the same, just the same. Francesca Gino, my Italian collaborator, said, come to Italy, we’ll show you what the Italians can do, but the Italians cheat just the same. We tried Turkey, Germany, Portugal, the UK. We tried Kenya, South Africa, Colombia, Japan, China, Sweden.
7:43 Anyway, people cheat just the same.
7:45 Brian Rose: Same, because in some of our minds, some of these countries are more honest than the others.
7:50 Dan Ariely: And they are, and they are. So Kenya is leading the world in corruption, right? And if you’ve been to other countries, you see that corruption or dishonesty is very different.
7:59 So how do we explain this? Our experiment is general and abstract, and it’s not part of the culture. And because of that, we’re kind of the same over, like the whole world, we’re just the same. Now, it doesn’t mean that culture doesn’t matter. Culture comes and apply overriding behavior in a specific silo.
8:19 So in South Africa, it’s okay to bribe a policeman, right? It doesn’t mean that people cheat their friends in poker, more. In the US, it’s okay to download illegal content online. In the UK, I’m not sure exactly what it is, but cultures don’t change the backbone of humanity. They just change how we apply our rules, our psychology in a specific domain, and sometimes there’s an overarching principle.
8:48 So when you think about cultural differences, at the core level, which is often what interests me more, we’re really all the same, but when it gets to be applied in different areas, it get to be applied differently. That’s kind of the way to think about it. And when it’s applied, it’s applied in silos. So it doesn’t mean that Brits are overall more honest, or less, it just means that when it comes to a particular area, like being polite, they don’t tell you what they really think.
9:21 They care more about politeness than honesty, for example.
9:24 Brian Rose: I used to have an Italian client in the city and he would make fun of all the queues in England. He said in Italy, it’s what ever been for himself. And here, there’s always the queue. I guess that’s kind of a form of not cheating.
9:38 But it’s a cultural thing.
9:40 Dan Ariely: That’s right, exactly.
9:42 Brian Rose: So you say, in queues, we don’t have this. But if you look at the scandals in banking, for example, you wouldn’t say the British are just more proper and rule-abiding than other countries. No.
9:55 Dan Ariely: No, but cues the specific rules about how to behave.
9:59 Brian Rose: Right. And on the same flip side, I think my same client used to say that cheating on your taxes in Italy was almost a sport. And yet, that is less of a norm here. Yeah.
10:13 All right, so there’s cultural pieces, but empirically as humans, we all kind of cheat the same. So when we cheat on a task that is abstract in general, we’re the same. But if you live in the UK, you’re taught not to cheat on taxes and to stand on the queue. So you have the same instinct underlying it, but when it comes to a specific context, society defines this context for you and tell you what’s acceptable or not.
10:42 Brian Rose: Okay, you have a Netflix series, a movie about dishonesty.
10:46 Brian Rose: Before we get into the personal finance, what else did you learn about humans cheating dishonesty?
10:53 Dan Ariely: A lot. So one of the things we learned was that it’s really easy to corrupt people. So imagine the same experiment. You come to the lab and we describe to you this experiment and we say, look, Brian, we have two versions of this game today.
11:10 One version, the exchange rate between dots and money is such that at most you can make today is $4. The second version is such that at most you can make today is $40. So they’re the same either $4 max or $40 max, why don’t you flip a coin and we’ll see which one you get. You flip a coin and no matter what you flip, we say, ah, sorry, you got the $4 version. And now the literature system looks around and he says, listen, my boss is not here today.
11:40 I’ll tell you what, you got three dollars to show up for the experiment, to pay for the bus fare. If you’ll give me those three dollars, I’ll pretend you got the other coin flip. So the research assistant is basically asking for a bribe.
11:55 Brian Rose: Now, wait. You love this stuff, don’t you?
11:58 Dan Ariely: I do love this stuff, but well, it gets a little sad. Here’s the first question. What percentage of people bribed him? What do you think? These are undergrads in Duke, but you know, it doesn’t matter.
12:11 And this is to get 40 bucks instead of four bucks. So real money for these undergrads.
12:17 Brian Rose: Okay, what percentage bribed in, one third?
12:19 Dan Ariely: 90%. 90?
12:20 90%. And what happened after they bribed in? Remember, they moved from $4 to $40. Did they cheat more or less the same?
12:27 Brian Rose: You would think they would cheat more for $40.
12:30 Dan Ariely: They do cheat more for $40. And they started stealing. Now, what do I mean by stealing? I told you they have this piece of paper and they say the die came on five and one. I chose the bottom, it’s five, it came on six and one it is, and then they sum up how many points they have in total, the 20 trials, and then they have a little equation to translate into money, and they calculate it, and then let’s say they write $23 and circle it, so we owe them $23.
12:58 At that point, we could pay them $23, but instead we give them an envelope with $50, and we say, why don’t you pay yourself the amount of money you deserve, the amount of money you don’t deserve, leaving the envelope, and as you leave the room, There’s a big box with envelopes, just drop it there. So now you have two types of opportunities to be dishonest. One is to pretend, oh, I really meant top, I really meant bottom. But the other one is to write $23, take 25, 28, even 50.
13:23 Usually we find that people cheat but don’t steal. They… Right, cheat but don’t steal. They remember wrongly what they chose sometimes, but once they write $23, they take $23, they don’t take 25. Even criminals had to do that.
13:41 This corruption experiment I just described to you is the first time we also saw stealing. People not only remembered wrongly what they picked after they saw the results, but they also wrote $23 and took $25 or $30 or $40. And here is the sad thought is that think about what happens when you come to an environment that the person leading it is corrupt. How quickly do we change? And in this particular example, people change dramatically after one experience.
14:16 Because the person in charge said, hey, I’m gonna let you steal. The person in charge says, I’m interested in a bribe here. It’s a corrupt environment.
14:24 Brian Rose: Oh, so it let them, so then they thought everything was open.
14:28 Dan Ariely: That’s right, that’s right.
14:29 Now, imagine.
14:30 Brian Rose: Making some parallels here to the banking world, perhaps.
14:34 Dan Ariely: Well, there’s a banking, there’s politics. Okay. I mean, imagine that you live in a country where the president is corrupt.
14:42 How to imagine, but you know, just imagine. Or a political leader, or imagine that you work in a company, that you feel that the head of it is corrupt. How quickly does it change our moral fiber? And I’m not saying that the people who came to our experiment would start cheating in basketball and other things that do with your friends, but in that particular environment, very quickly we learn terrible lessons about what is acceptable and not.
15:14 Brian Rose: Hmm, really interesting, okay.
15:16 Dan Ariely: There’s much more to say about this honesty, but the thing is about this honesty, it’s not just about this honesty. There’s a story in the Bible that God comes to Sarah and he says, Sarah, you’re going to have a son. And Sarah laughs and she says, how can I have a son when my husband is so old? God says, don’t worry, you’ll have a son. Then God goes to Abraham and says, Abraham, you’re going to have a son.
15:44 And Abraham says, do you tell Sarah? And God says, yes. And Abraham says, and what did Sarah said? And God said, Sarah said, how could you have a son when she is so old? And the religious scholars wondered, how could God lie?
15:59 Sarah clearly said, how can I have a son when my husband is old? and they decide it was okay to lie for peace at home. Now, if you think about this, it means that we as humans have lots of values. Honesty is one of them, but it’s not the only one. What happens when values collide?
16:18 What happens when it’s how do you feel about this tie versus honesty, right?
16:23 Brian Rose: It’s a nice tie, by the way.
16:25 Dan Ariely: Thank you. But you know, what happens when I care about the well-being of my company versus honesty? when I care about my own salary.
16:33 And the reality is that when we study honesty, it’s not just about honesty, it’s about how we trade different human values with each other. And we have to trade them all the time. And what we find in general is that we don’t always trade them in our long-term best interests. Often we succumb to temptation, and our trade-off is more influenced by what we can rationalize then what is actually good for us.
16:59 Brian Rose: Can you give a good example of short term versus long term thinking and something that’s obvious when you look at it as a professor, as a scientist, whereas when someone’s in the trenches, for them it seems to be the right decision.
17:14 Dan Ariely: Well, you know, the easiest ones are of course overeating and the saving, not exercising. You know, you look like a very fit person, so you probably don’t indulge too much, But, how much do you sleep? You ask people these questions. In the last month, have you overeat and under-exercise, not saved enough, didn’t sleep enough, not always wash your hands when you left the bathroom? I mean, you go ahead and- You’ll find something.
17:43 And there’s lots of things that we do that is irrational. And, you know, in standard economics, there’s this term revealed preferences. We say, what do people want? Let’s just see how they behave. and the way they behave means what they want.
17:58 But if you look at how people behave, it’s inconsistent with what we really want. So the reality is that, and this maybe has been one of the biggest findings in social science last 40 years, over and over, that the environment matters, the environment matters. You take a person and you put them in one environment, they behave one way, you take the same person, you put them in a different environment, they behave very differently. If I walk you up every morning to a buffet of donuts and muffins and croissants and the smell filling your home, you’ll be a different person at the end of the year, right?
18:38 Now I’m not saying you’ll fail every day, but you’ll be a different person. So the environment matters and the thing about it is that it’s kind of both good and bad. On the good side, it means that we actually have power. that there’s a power of human free will, but the power is not in resisting the cookie, it’s not to expose ourselves to it from the beginning. Our power is to design our environment in a different way.
19:08 If I came and tempted you all the time, life wouldn’t be good, but if you redesign your environment, you could live much better. So look at your offices here. You design them with a very specific idea in mind. Once you design them in mind, other things follow, right? If you design them very differently, other things would follow.
19:27 So human freedom really resides in designing our environment. So that’s the good side. The bad side is that we often let other entities design our environment. Think about supermarket. Supermarket is not something that you and I design for our own purposes.
19:45 Somebody else design it for their purposes.
19:47 Brian Rose: Right, it’s like a fun house someone else built.
19:49 Dan Ariely: It’s a fun house, somebody else built.
19:51 Brian Rose: In order to get your money.
19:53 Dan Ariely: That’s right, that’s right.
19:54 And they put different things at eye level and they put different things at the end of the aisle and they put different things when you check out and somebody has a very different goal. And their goal, by the way, is not your long-term well-being.
20:09 So on one hand, we have power by designing our environment. On the other hand, often somebody else has this power and therefore they can manipulate us.
20:17 Brian Rose: Right, and we believe we have a choice when most often times it’s an illusion of choice. You’ve made that pretty clear with some of your research on organ donation.
20:25 Dan Ariely: That’s right.
20:26 Dan Ariely: And so this is a great example, organ donation.
20:29 Brian Rose: So you show that countries where people have what’s called an opt-in, that you’re not assumed to be an organ donor and you have to sign something to become an organ donor people don’t sign. And countries where people are opt-out, which means that they’re assumed to be organ donors and they have to sign something not to be, people become oral in donors. So there’s a big gap. Opt-in, opt-out, meta is a great deal.
20:55 Dan Ariely: But imagine you have a group of people and they go to the department of motor vehicle and half of them get the opt-in form and half of them get the opt-out form and they come out. And the people that got the opt-in form don’t donate and the people that the opt-out form donate. And you ask them, why did you choose what you chose? Why did you choose the opt-in people not to donate and the opt-out people to donate. Nobody says the form told me to do so.
21:18 Nobody says it was opt-in, opt-out. Nobody says I didn’t know what to do so I did nothing. They all come up with amazing stories. And the stories are not about the environment, the stories are about them making a decision. So if you got the opt-in form, you would say something like, I’m really worried about where medical science, technology is going, all these young physicians, too eager, somebody will disconnect me if something happens.
21:43 If you got the opt-out form, you will say something like, my parents raised me to be a wonderful, caring human being. I’m just following in their leadership. So we create a story based on the decision as opposed to the other way around. That’s right. And we use our amazing brain power, not to make a decision, but to explain ourselves to accept afterward why this decision is actually the right one.
22:05 And our stories are so good that they even convince us. And because of that, we just don’t see reality because we’re just so good in coming up with stories all the time.
22:17 Brian Rose: And how can we be more vigilant when it comes to our own decisions?
22:22 Dan Ariely: Try to look at all these things on face value.
22:25 Brian Rose: These success secrets are only available on the London Real Academy.
22:30 Become a member and get access to live shows, exclusive courses, my webinars, bonus content, meetups, live events, an amazing community, and much, much more. Now back to the rest of the show. All right, and I want to get into this book because when it comes to humans and money, it brings in all sorts of other irrational behavior because it’s a very complicated relationship we have with our finances. Tell me a bit about you. What’s a nice kid from Tel Aviv doing, studying all this crazy stuff?
23:10 Dan Ariely: So, as you know, I was badly burned. The reason I have half a beard is not that I’m trying to.
23:17 Brian Rose: I like the half of your book, yeah, I do.
23:21 Dan Ariely: So this side is because I stopped shaving and this side is because I have scars, so.
23:27 Brian Rose: How old were you when you were born?
23:30 Dan Ariely: Almost 18.
23:31 Brian Rose: 18, okay.
23:32 Dan Ariely: And I was burned in about 70% of my body. And I was in hospital for almost three years. And a lot, so I learned a lot of new things in hospital, But also, a lot of things bothered me.
23:48 Brian Rose: And… Was it a frustrating daily process being in there?
23:55 Dan Ariely: You know, frustrating I think is,
23:59 I think to frustrate, you need cognitive capacity. It was painful. And so it’s actually much worse. There’s an expression being a pain person. And being a pain person means that you’re fully consumed by your pain.
24:15 And that was me. So there was no, you know, frustration is kind of, it’s a privilege to experience frustration, right? It’s not like sense of humor. If you’re really in pain, there’s really nothing else.
24:29 Brian Rose: Right, and this is 30 years ago, but I’m guessing that there’s not a lot drugs would do anyways because it was 70% of your body.
24:37 Dan Ariely: So drugs have improved in the last 30 years, but when I was injured, drugs were not as good today, today they put people with kind of injury that I had in a induced coma, because there’s just no reason to suffer. But at the time, they didn’t have the technology to do that because when you get burned, extensive burns, the whole body fails. There’s a failure of the liver, of the kidneys, of the lungs, of the heart. It’s a stress to the whole body, it’s not just the skin, right, you’re basically with no blood supply, the whole body is in shock for a long time, lots of people die not from the skin but die from collapse, internal collapse of the systems, so it really is a terrible environment and being in hospital Anyway, so I was in hospital for a long time and there were some specific things I learned and some general things I learned.
25:53 Some of the specific things had to do with how the nurses removed my bandages and learned helplessness and pain medications. At the time, they couldn’t really give us a lot of pain medications. we would have this allowance of how many times a day we could get morphine shots.
26:16 Brian Rose: Morphine trips, okay.
26:17 Dan Ariely: So we had six a day.
26:19 And sometimes at night I would hear one of the other persons screaming from pain and the nurse would go to the room and give them an injection and they would fall asleep quietly. And you know, everybody tracked their own medication but I would also track other people’s medication, part of my obsessive nature. And I knew that that person got an extra injection over the astronauts, like they got an extra, I want an extra one too. And sometimes she told me it was just saline water, just a placebo.
26:51 And you know, we’ve all heard about placebo and so on, but to experience it and to know how much pain I have and to know that that person in this other room has the same level of pain and to realize that they’re getting a medication with nothing and they go to sleep, that was incredible. So I learned some general lessons about pain, placebos, removing bandages, learned helplessness. But then the other thing that happens is that I was kind of plucked out of life and was on the bed and started observing life from a very different perspective.
27:30 I wasn’t part of anything that people were doing. I wasn’t eating, I wasn’t getting up, I wasn’t dating, you know, there was nothing about the human experience that I was a part of for a very long time. And even when I got out of the hospital, I still looked very different and didn’t really integrate that well into society and kept some of this stranger perspective, some of the outside perspective, and it’s sometimes a little difficult to live like this, but as a social scientist, it’s very useful.
28:10 Brian Rose: It’s perfect for the social scientist, right? Did that burn and kind of decide your future career? Because now you do exactly that, observe people.
28:20 Dan Ariely: Yeah, absolutely, so, and in many ways, it’s really amazing to think about where we end up, and kind of like our stories that we tell ourselves, We say we chose it. But the reality is that it came from all kind of choices we didn’t make.
28:37 And there’s one that I know I didn’t make. So my first year in university I studied math and physics. And I chose math and physics because I couldn’t use my hands. And in high school I could do math and physics in my head so I didn’t have to write anything. I couldn’t do it at university, it was too much.
28:55 So I had somebody who would write equations for me and I would, you can’t do homework this way. So I asked my mother to sign me up for philosophy. It’s okay, that’s something you certainly don’t use to use your hands, I can just flip pages and read. And she went to sign me up for philosophy and they told me I couldn’t take only philosophy, I had to take something else, double major, they wouldn’t let you major only in philosophy. And she asked what do most people take and they said psychology.
29:23 So she signed me up for psychology and philosophy And when she came back and told me I was pissed off because the only thing I knew about psychology were the Freudian psychologists in the burn department that were sometimes making my life more difficult. But then it turns out that it became the passion of my life is to use psychology as a research tool to understand human behavior. So I know at least some of the elements of luck. And the answer is yes. What motivates me now is that I hate human waste.
30:03 So if you think about how we waste our time, how we waste our money, how we waste our health, energy, hate, and I look at all of those things and we’re so far away from achieving our potential. And those are the places where I try to think about how can we structure things differently to fulfill our potential in a better way?
30:26 Brian Rose: Basic behaviors, are we gonna look at them differently and just make more intelligent, long-term decisions?
30:34 Dan Ariely: Yeah, I mean, intelligent, just better.
30:37 Brian Rose: Just better, not intelligent, all right. It doesn’t have to be intelligent, it has to be better. Okay, and it’s interesting because most people that go into philosophy and psychology don’t have a mathematical background, so the fact that you did, It seems to me, from watching your TED talks and seeing your research, puts you way out ahead, or at least a different perspective than a lot of your colleagues. Because you quantify things, don’t you?
31:01 Dan Ariely: Yes, very much.
31:02 Dan Ariely: And I’m also kind of looking things very much like an engineer. Kind of I basically think about here’s human behavior, here’s the ideal one, what are the forces that we can add to push things in the right direction. And I love experiments. I love puzzles and riddles, and looking at how, what’s missing and how can we push behavior to be better.
31:27 Brian Rose: Okay, tell me about how we can push behavior differently, say when it comes to government’s banking world.
31:35 We both spent some time at MIT. I was there from 1890 to 1993. You were there from 1998 to 1908. I really do love that institution. There’s some very special people there and it’s kind of a special place and I know you had some interesting times there, to say the least, but when I went to Wall Street in 93, I walked into a banking environment where it was, how much money can we rip out of our clients?
31:59 This is the truth. And I always used to joke to my friends. I’d said, it’s like I was brought up in an abusive home where I would watch my dad beat my mother and of course then I would beat my girlfriend. And it was a horrible analogy, but I walked in and they said, this is what we do here. These are our clients, but we try to rip as much money as possible.
32:18 And from the day one, that’s how I behaved. Now, maybe it’s different now, maybe it’s not. But when you see behavior patterns just like this, right? And I had lots of students at MIT that kind of were choosing between medical school and banking, right? And they were the same people.
32:39 And whatever system they chose would dictate the kind of person that they would become. And you’d see them a few years later. And it’s a, it would be either good people or cuts. Or not so good people. And, you know, this is, it’s really terrible, but I’ll tell you something that has really, So how can we change that, I guess, a lot more than that.
33:01 Dan Ariely: So let’s put on hold for a second a question about culture in banking. But let me give you an example from, this is, this became one of my favorite studies. And here’s a study. We try to get very poor people in a slum called Kibera to save a bit of money. These are very, very poor people.
33:21 They live in about $10 a week.
33:23 Brian Rose: Okay. What country is this?
33:25 Dan Ariely: In Kenya. In Kenya.
33:26 Brian Rose: Okay. Kibera, yeah.
33:27 Dan Ariely: And then, and the reason to get them to save money is not for retirement. They will never reach retirement. That’s not an option in this slum.
33:36 They would die much younger. What happened is somebody who lives hand to mouth, have no extra income, what happened when something bad happens? Maybe they get sick, their goats stop producing milk, whatever it is, they’re in a deficit and they can’t scale their expenses down, not much. So what do they do? They borrow, they can borrow 10% a week if they’re in Kibera, or they have to sell stuff.
34:03 So what happened is that poor people live on the edge And when something bad happens, they just deteriorate. So we want them to have a little rainy day fund. So imagine what would happen if I said, you pick your regular wallet in your right pocket, and you’re saving your wallet in your left pocket. You would spend it. You walk around Kibera, there’s fruit, there’s water, there’s kerosene, you know.
34:29 These people, they walk to get kerosene for the lamp at night with a Ziploc bag, and they fill it with a tiny amount, right, for two cents. I mean, it’s amazing.
34:41 Brian Rose: A kerosene. Yes. Really?
34:43 Dan Ariely: Yeah. Okay. They walk 15, 20 minutes to the kerosene store, somebody fills it, a tiny amount. I mean, you know, if they had a couple of more cents, they would get more water, I mean, they would get things. Right.
34:54 Brian Rose: The concept of saving is almost, it’s inconceivable to them. That’s right. Because there’s so many more immediate needs right there. That’s right. Okay.
35:01 Dan Ariely: So the first principle is that we needed to create savings where it’s easy to put money in on the spur of the moment, but hard to get it out. If it’s easy to get it out, they’ll get it out. So we teamed up with Impeza. A piggy bank. Yes.
35:15 So we teamed up with Impeza. Impeza is the Kenyan payment company online. They can use dumb phones and not feature phones and basic every phone. And we teamed up with Investment Bank. And people could text money into their Impeza accounts to save.
35:31 And every night, the money moved automatically to the savings account. So you could put it in very easily. It would move to the bank, and then it would be difficult to get out. You couldn’t get it through Impeza. You had to take a bus, go to the city, fill a form, wait an hour, take a bus back.
35:48 And this was on purpose because you wanted it to be some friction. You wanted that if there was a real emergency, people could have access to this money, but you didn’t want everything to become a real emergency.
35:59 Brian Rose: And then… How did that work? Okay, so wait, that’s the beginning.
36:02 Dan Ariely: Yeah. So we gave this system and I think what is the base. Some people just got the base system. Some people, they got the base system plus a weekly reminder that said, try and save 100 chillings about the dollar this week. Some people got the same message, but it was pretended as if it came from their kids.
36:20 Hi mom, hi dad, this is a little Joseph, whatever the name of the kid was. Try and save 100 chillings for our family. group got a 10% match, save up to 100 chillings, we’ll give you 10%. And that group got a 20% match. Two other groups also got 10% and 20%, but they got it together with loss aversion.
36:40 So if you remember loss aversion is the idea that we hate losing more than we enjoy gaining. If you lose 1,000 pounds today and you gain 1,000 pounds tomorrow, they will not balance each other out. The losses will be psychologically more painful. You would need to gain 2,000 to make up for the pain. The ratio is about two to one.
37:01 Brian Rose: Is it two to one for that? Okay, cool. It goes for social media comments as well, right? You read social media comments?
37:06 Dan Ariely: I try not to.
37:07 Brian Rose: Yeah, yeah. There you go, right? I mean, you know, how many? There’s no upside. Yes.
37:11 Dan Ariely: Because it’s probably more like five to one for the social media. So, yeah, how many negatives will make a positive? That’s right. So, you have 10%, 20%. Now, loss aversion means that people would see the money they did not match.
37:23 So, imagine somebody’s in a 10% condition and they put 40 shillings in give them four more. They’ve given up on six. But they don’t see the six that they gave up, they only see the four that they got. So we said, what if we put the match in the beginning of the week? Here’s 10 shillings. Potentially, it’s yours. And if people put 40 in, we say, oh, you put 40, we leave four in and we take six back. It’s the same thing as putting four, but it shows people the money leaving their account. So it has this loss version element. And then the last condition we had was we created a coin about this size and we had 24 numbers written on the edge of the coin. And we asked people to put the coin somewhere in their hut and every week take a knife and scratch the number for that week. Week one, two, three, four. Scratch it this way if you didn’t save and this way if you saved. And it was somewhere public in the house. Now think about all of those methods. Nothing, text, text from kids, 10%, 20%, beginning of the week, end of the week, and the coin.
38:28 How did they work? The control condition, just giving a system, people a system that made it difficult for them to take money out, already helped. People started saving, which means that the very, very poor want help with impulse control. They want the system that would help them put money away without being able to take it back. the reminder helped a lot.
38:54 10% at the end of the week helped some more. 20% at the end of the week, just like 10%. No difference, yeah. No difference. No difference.
39:03 10% in the beginning of the week, loss aversion, helped some more. 20% at the beginning of the week, just like 10%. Again, no difference. And kids, the message from the kids, were just like 10% and 20% in the beginning of the week. And that’s one of the first amazing things about this research is to realize how powerful kids are, what a powerful motivation they are.
39:25 But the real surprise was the coin. Because the coin, more than double savings compared to everything else. And I have to say, I didn’t predict that. I was curious about the coin, but I didn’t think it would be that effective. Now, why was the coin so effective?
39:38 What was it about it? And I’ll tell you how I started thinking about the coin. So I was in so-
39:44 Brian Rose: Gamification somehow, this coin.
39:47 Dan Ariely: So, yes, but unification is such a general term. Let me do it more specifically.
39:52 So I was in Soweto in South Africa, and I sit there in a place where they sell funeral insurance. Have you been to South Africa?
40:02 Brian Rose: No, I have. I’ve been to South Africa, yes, but not Soweto.
40:06 Dan Ariely: So funerals in South Africa are very, very expensive.
40:10 People spend up to a year to two years of income on funerals.
40:13 Brian Rose: I’m guessing in the UK, it’s probably weddings, right, the people?
40:17 Dan Ariely: Probably, yeah. So this is a cultural thing for South Africa.
40:20 Brian Rose: It’s a cultural thing, right?
40:22 Dan Ariely: Weddings not as big. It’s how you honor people. That’s right. Weddings not so big. And by the way, we can argue which one is more rational.
40:29 Yes. Because funeral, at least you know for sure it’ll have only one. And anyway, but, so I sit in this place that sells funeral insurance, And this father comes in and he buys funeral insurance for a week, right? Which means that it only applies, it would only cover him if he dies in the next seven days. This is a very poor man, he buys small amount of soap and small amount of insurance and so on.
40:58 And he gets a certificate in a very ceremonious way gives it to his son. And as he does this, I think to myself, why the ceremony, why is he doing? Now, think about the following. Imagine a breadwinner who takes money from their income today and puts it into saving or insurance. What is the family going to see tonight?
41:23 They’re going to see less. Yes. If you’re at the level of poverty, there’s going to be less kerosene, less water, less food, whatever it is. Something is going to be less tonight. If you’re not that poor, it will be something less this week or this month.
41:35 And even if you’re kind of middle income and you put money away, Also, there’ll be less. I mean, at some point, it will be less. And what it made me realize is that some of our most important economic activities are invisible. Now, think about a thousand years ago. A thousand years ago, how did we save?
41:57 Basically in goats, livestock. And what’s the nice thing about saving in goats is that you can come home at night and you could see how many goats your neighbor has. You can compete on who has more goats. We could compete on who has more savings. So imagine we have two activities, spending and saving and insurance.
42:16 And over time, we invent money and digital money and we take this saving and insurance and make it invisible. And we take the spending activity and we make gardens and cars and trips abroad and we make it more and more visible. How much attention can people pay to those activities? So, the certificate that is further used and then the coin was basically this idea of showing the family there’s another economic activity. It’s not food, but it’s also not perfectly invisible.
42:51 There’s something else happening and we can track it as a family and we should unite around it and understand that it’s not less, it’s just different. But of course, the reason I love this research is it got me thinking and you can say, oh, Isn’t it obvious that saving and insurance became invisible? It wasn’t obvious to me. But now I’m thinking, okay, so if one of the main reasons that we can’t care a lot about insurance and savings is because they’re invisible, how do we make them more visible?
43:24 What as a society can we do to make them more visible and therefore get people to care more about them?
43:30 Brian Rose: Right. And so that coin being marked each day showed the family that we were saving for the future. And it was a tangible sign that that we were doing the right action That’s right almost kind of like an award or a medal look I get to wear the gold medal I saved for the family today and everyone would value that at the dinner table That’s right, and so hence they did it more Yeah, it’s fascinating and so back in the day you’d have the goats or the cows and so as opposed to the Conspicuous consumption that’s right. It was the conspicuous savings. Yes, not conspicuous, but yes, but it was savings, right?
44:02 Dan Ariely: Well, it was conspicuous if he had all the goats
44:05 Brian Rose: I guess so alright, so you’re fascinated at looking at these at these kind of ideas to see how we can motivate certain behavior that’ll end up Serving us as humanity. Yeah more than anything. Okay, I do want to jump into this book But I want to also want to ask you one more thing because you studied human relationships as well And I know you studied a lot of aspects to it But what are some of the things you learned about how we are predictably irrational when it comes to our own relationships?
44:34 Dan Ariely: Oh, there are so many, okay, here’s a couple. This is based on a beautiful paper by Ebert, and they basically took a group of undergrads and they taught them how to take pictures. And at the end of the semester, they said, okay, you took all your pictures and pick Pick one that you want to be enlarged. Pick one you want to be enlarged. And then they divide them into two groups.
45:08 In one group is they say, pick the one you want to be enlarged, we’ll send it to a lab somewhere else, it will come back in two weeks in a poster size and you can’t change your mind. That’s it, that’s the one you’ll get. The other half they say, pick a picture, we’ll send it to a lab, it will come back in two weeks, you can change your mind every day including the day after it shows up. That’s it, they picked, they sent, the picture came back, and the people couldn’t change their mind, got their pictures, the people who changed their mind, nobody wanted to change their mind, but then they measured how much did they love their pictures?
45:50 Which group do you think loved their picture more?
45:53 Brian Rose: The ones that could have changed their mind.
45:56 Dan Ariely: They loved it less.
45:57 Brian Rose: Oh, okay. Why? Why?
45:58 Dan Ariely: Because if you know you have to deal with something as reality, you basically start using all your psychological mechanisms, say, this is it, I love this picture, let me now convince myself why I love it. If you’re questioning yourself all the time, love doesn’t get the chance to flourish. And I think that that’s what’s happening a lot in the era of dating multiple people and jumping from day to date and from Tinder to Tinder. So imagine you’re in bed with your most recent Tinder date and you could be looking at your phone for the next Tinder date but let’s imagine you’re not.
46:46 So you just started a relationship but 30% of your mind is occupied by saying am I sufficiently happy? What else is out there? There are three other profiles I saw that I’m still waiting for responses from. In that world, in which we’re all the time thinking, is this the picture I really love the most? Is this the person I love the most?
47:11 Do I want to change my mind? We don’t really have the mental capacity to invest in that relationship. So if you say relationship is just about a match, then there’s no problem. The idea, the reality is that relationship is about a match and about commitment. And every time that you keep on looking outside, the match is the match, but your commitment is very different, it doesn’t actually allow us to develop for relationship.
47:45 So, you know, we have, you know, arranged marriages, and I’m not recommending that we go that path, But there’s something very important about arranged marriages that is to say, people understand they’re together for a long time, right? And the moment you understand you’re together for a long time, your perspective changes, your investment in the relationship changes. And the quality of the relationship changes dramatically when you’re investing assuming that you’ll be there for a long time, even if you don’t end to, then if you assume you’ll just be there for a short time.
48:21 So I worry about this tinder world in which we, and I’m just using tinder as a name, in which we don’t have the dedication. We don’t think we’ll necessarily be together for a long time. Our assumption is a short term investment and therefore we don’t necessarily give a relationship there full potential.
48:40 Brian Rose: Hey Don, it’s funny, you’re talking about relationships there and I was thinking about startups and like I know you advise and you’re the behavior officer of certain tech startups But I wonder if you ever see that with founders that are thinking, okay, I’m gonna sell this company to Google I know you’ve sold one of your companies to Google or the people that are thinking I’m gonna keep the rest the rest of my life like Zuckerberg says with Facebook I mean, is that a similar type relationship where you’re like, well, maybe I can and get out of this and go do the next big thing or whether I’m here for a long time.
49:18 Dan Ariely: Yeah, I think it is, but with startups, even the short-term startups are quite a few years. Right, right. So yes, I would prefer people that work in a company that say, my plan is to get this company to grow all the way. And it’s a very different perspective how you start with it. So, just imagine the quality of code for a company that thinks in advance that they’re going to sell, versus a company that thinks they’re going to develop something and stay with it forever.
49:56 It’s a very different perspective.
49:58 Brian Rose: Yeah, so why jump into personal finance now, and why write the book with a professional comedian? Yes.
50:06 Brian Rose: You’re pretty funny.
50:07 Dan Ariely: Oh, thank you.
50:08 Brian Rose: Is that an Israeli thing to crack jokes like that? Or what is it?
50:13 Dan Ariely: Well, we have a Jewish humor, which is kind of traditional. I’m not sure how much people like it, but there is some,
50:21 It actually, you know, in kind of evenings with Jewish friends, not just Israelis, people do tell jokes. It is kind of, you sit around the table and then people have a round of jokes. People go from person to person to person to tell jokes, all right.
50:36 Brian Rose: And your humor, does it come because you spent three years in the hospital, does that have something to do with it, or are you just a natural, funny guy?
50:46 Dan Ariely: I don’t know, I don’t know where the humor comes from.
50:49 You know, humor is kind of interesting, because you know actually that, you know, I’m not that good, but there’s actually a very sad study showing that successful, the most successful comedians commit suicide, much higher frequency. And there’s something about comedy that it’s a way to deal with pain.
51:16 So there is not comedy like sitcom, but comedy is often kind of an observation about something painful in life just looking at it in a different angle. It’s usually funny because we realize that there’s some behaviors that don’t make sense and yet I guess people are still doing it. That’s depressing. But in this case, I’ll tell you how it came up with Jeff, Jeff Chrysler. He’s a great guy.
51:46 So I wrote a book on dishonesty and he wrote a book about dishonesty. And his book’s name was Get Rich Cheating. And he was basically making the points that if you want to be rich, it’s very simple, cheat. You say, you know, don’t steal free pizzas that you go to jail for, but if you steal billions of dollars, everything is fine. Nothing bad happens.
52:15 So he had this thing in, he would do a show in comedy clubs and he had this book, but I invited him to come to my class. And when he’s in the comedy club, people know he’s a comedian. When he comes to my class, I introduce him as a consultant to all the big companies and so on. And he starts by asking the students, why are you here? They say, to learn, to this.
52:39 No, he said, no, no, no, you really want to be rich, right? So, yes, yes. They said, okay, if you were really rich, what would you get? What would you buy? What would you do?
52:51 And somebody says a big house, or somebody says a car. And he said, no, think big. He said, and people start saying an island, a jet. He said, think bigger. He said, I bought a giraffe.
53:02 He says, think Faberge egg omelette. Anyway, he kind of gets them excited and they come up with things that cost hundreds of millions rather than tens of millions. Anyway, he gets them excited. And then he says, why aren’t you rich? And they say, we need to get the job.
53:17 We need to do this. And he basically says, what’s the easiest way to get rich? And somebody at some point says, cheating. And he says, why don’t you cheat? That seems like the easiest way.
53:31 And people said, we could get caught. He says, really? Let’s look at the statistics. And he goes over all the bankers and all of this. Even if they get caught, nothing bad happens.
53:41 You don’t get caught, you don’t sit in prison. And eventually he gets them to recognize that it’s their conscious that he’s stopping them. He says, you’re your own worst enemy. He said, you’re stopping yourself. You could be really rich.
53:53 Just start cheating. Why are you holding yourself back? Anyway, at this point, I joined the discussion and we talk about ethics and so on. And the students, I think, had an amazing experience because they got so excited with money and kind of realizing that it’s easy to lose your ethics. They all had thoughts about some point.
54:14 They said, yes, you know, we’re ambitious, do this. Anyway, so it came for three years to my class and I really enjoyed it and we started talking and we had a really good time and then we decided to do something else together.
54:27 Brian Rose: Came for three years to your class. Every year. Okay.
54:30 Dan Ariely: Every year came to do this. At Duke. Yeah. Okay, gotcha. And then it was great.
54:34 It was so much fun. So, and we had such a good time together. We said, we have to continue doing something. So then this book came. Nice.
54:40 Brian Rose: Biggest takeaways from this book. What do you want people to learn about their own dysfunctional relationship maybe with their personal finances?
54:49 Dan Ariely: So, so maybe kind of, the book kind of has three parts to it. The first part is just the recognition of how difficult it is to think about money. Money is all about opportunity cost.
55:01 Every time you go to buy a cup of coffee, you should be thinking, is this the best possible way to spend $5? Or is there another way? And we just can’t do it. That’s the first part. The second part that is much, much bigger is to think about some of the fallacies that we have.
55:17 Relativity, the pain of paying, mental accounting, efforts, fairness, and so on. And those are things that people I think should recognize. They should recognize, see where they are, see when they’re making their lives worse off, and think about what they want to correct or fix and so on.
55:34 Brian Rose: You mentioned mental accounting, can you define that?
55:37 Dan Ariely: Yes, one second.
55:38 And then the third part is a little bit more like advice, like what do you do with it when we try to give more practical advice. And if you ask me, what do I really want from people? Like at the most general level, I really want people to be fascinated with ourselves, right? You know, we used to think that the big mysteries of life are in the stars and molecular biology. We are incredibly mysterious, and we don’t understand ourselves, so that’s one.
56:07 The second one, I want people to realize how difficult money is, what are some of their own mistakes, and to think to themselves which one they want to fix. You know, if you have some mistakes that you’re aware of but you don’t want to fix, don’t worry about it, but at least to get some awareness and get some decision and then to give people some initial tools to how to get over it.
56:30 Brian Rose: Now, mental accounting. Yes. Mental accounting.
56:33 Dan Ariely: So mental accounting is the idea that people are a little bit like companies. So when you have a big company, they allocate money to different departments. Advertising department gets a budget, marketing, R&D, every department gets a budget. And then they don’t think of this money as fluid, right?
56:59 If a department runs out of money, too bad. If a department has extra, everybody gets a new laptop and they hire a consultant, right? They don’t, the money’s not fungible, right? And the idea is that we are a little bit like this. What we do is we allocate money into different categories and we think about it differently depending on the category that it came from.
57:21 So imagine that you worked for me and I want to increase your salary by a thousand pounds a month. I can either give you a thousand pound every month or 12,000 pounds at the end of the year. And I ask you, which one do you want? The more rational option is to say, give me a thousand pounds a month to get the money earlier. You can spend it, save it, pay debt.
57:46 But when you ask the question is, would you use the money differently? People say yes. And when you ask the people like, which one would you use better? People say at the end of the year. Now why?
57:58 Because if money comes in at the same mental account as your salary, your mental model would be, I should spend it on monthly things like rent and bills and so on. If it comes at the end of the year, it doesn’t belong to that pool. And we’re more free to spend it on vacation or motorcycle or something, It’s something exceptional that would make you happy. So mental accounting is the way money comes in influences how we think about spending it. And if we deal with this correctly, we can actually manage our financial lives in a better way.
58:34 Brian Rose: Okay, all right. Talk to me about the price of free, because you talk about it in there, it’s a very interesting concept.
58:42 Dan Ariely: So free is actually a very, very different price than 10 cents, or even one cent, they’re very similar. So my favorite experiment was done with kids, but it doesn’t work only with kids. So kids came to my house in Halloween, and I said, please put your hand out, and I gave them three Hershey Kisses, small piece of chocolate, not so good, reasonable chocolate.
59:07 I said, don’t, leave it here, and then I say, I’m going to offer you two sneakers bar, one small one and one big one. One ounce and two ounce. And I say, which one do you want? And some kids, I said, the small Snickers bar would cost you one Hershikis. The big Snickers bar would cost you two.
59:29 So, basically, what do the kids ask themselves? Is the Snickers bar better than Hershikis? And the answer is yes. It’s eight times more in weight and much, much better chocolate. And then they should ask themselves, is it worthwhile to move to the bigger compared to the smaller?
59:46 And the answer is absolutely yes, right? For one more Hershey Kiss, you get two ounce Snickers bar instead of one ounce, double. And in that condition, everybody took the big one. In another condition, I did the same thing, but I said you can have the small Snickers bar for free or you can pay me one Hershey Kiss for the big one. Now, it’s still, kids should have still said, is it worthwhile to get the big one for one more Hershey kiss, but now their answer is no.
1:00:15 It’s not worth it. And this is not just about kids, it’s also about adults. The moment something is free, it kind of activates a hot emotional button for us. People stand for a really long time to get free ice cream. If you say, I have a free pound that I’m giving away, if you only stand in line for 45 minutes, nobody will stand in line.
1:00:41 But there is something very, very special about free. And what happened is it derails us. It derails us.
1:00:49 Brian Rose: Okay. And free booze on flights, right?
1:00:52 You know how terrible it is to land somewhere drunk. But it’s free. All of a sudden, little bottles, so cute. People way off a drink just because it’s free, even though it’s a terrible way to, I mean, flying alcohol don’t mix well. Yeah, definitely not.
1:01:07 Dan Ariely: And so we should recognize the power of free as being much more powerful than not costing something and know that we have a bias towards free things.
1:01:16 Brian Rose: And it also has an opportunity cost loss.
1:01:19 Dan Ariely: Yes, that’s right. So, you know, people, for example, drive a great distance to get something for free or wait for 45 minutes to get something for free when they lose a lot. And there’s a very simple mental trick there is every time something is free, just think to yourself, what if it was 25 cents or 25p?
1:01:37 Would I do it? Right. And if your answer is you would do it for 25p, then it might not be just a free. But if your answer is no, don’t do it.
1:01:45 Brian Rose: Yeah, there’s a classic example of, yeah, waiting in a line for two hours to get something for free and not calculating what you would be paid for two hours to get there.
1:01:55 Can I ask you a question about you? I mean, you’re a busy guy. You seem to get a lot of things done. You’re the chief behavior officer for different companies. I know you said you travel into South Africa now, full-time professor at Duke, right?
1:02:08 Brian Rose: How do you stay so busy, and are there certain things that you do every day that allow you just to do all these things?
1:02:18 Dan Ariely: So how do I stay busy? I work all the time.
1:02:22 So I love my work, but I do work all the time, and I have an amazing team. Duke, we’re about 45 people now in our research lab. People that are amazing and I fully trust them.
1:02:41 So part of the amount of work that we get is because I mostly get out of the way.
1:02:46 Brian Rose: And what kind of things are you doing in your lab right now? What kind of experiments are you running?
1:02:53 Dan Ariely: So mostly our work now is focusing on financial decision making for lower middle income people and how to help them. Like what you were talking about today with Soweto in Kenya.
1:03:05 Also in the U.S., and then we do stuff on healthcare. Trying to get people to eat better, exercise, take the medication. So, I’m happy to tell you about, let me give you an example of a bit.
1:03:16 Brian Rose: Because it’s funny, when you were talking earlier about people making irrational short-term decisions, I just thought of like America, obesity, epidemic, you know, diabetes. It’s not just America anymore.
1:03:27 Dan Ariely: Yeah, it’s not just America anymore. It seemed the most obvious. I’m sure you’re there. So let me give you an example from obesity. So, together with Nati, dear friend,
1:03:43 We said we want to do something about obesity. We said, where do we start? And we decided to start with the bathroom scale. From all the things at home, what reminds you about health? The bathroom scale is it?
1:03:58 The scale, yeah. And then we said, okay, what do we know about the scale? And we know three things about the scale. The first thing we know is that it’s a really good thing to stand up on a scale every morning. Not so good to stand in the evening, in the morning it’s good, why?
1:04:14 Not because we weigh less, but because if you stand up on a scale in the morning, you remind yourself that you want to be healthy. And therefore you eat a little bit less for breakfast. You step on a scale at night, you just go to sleep, you forget about the whole thing. Right, so stepping on a scale in the morning is a really good thing. Fact number one.
1:04:29 Fact number two, weight fluctuates a lot. Weight can fluctuate three or four pounds a day. For people who are obese, it can fluctuate eight pounds a day. What does this fluctuation create? So we mentioned loss aversion.
1:04:43 People hate losing more than we enjoy gaining. In weight, it’s the opposite. Imagine somebody that on average doesn’t change their weight, but the weight fluctuates up and down, up and down, up and down. The up days, you increase two pounds, really miserable. The down days, happy, but they don’t make up for it.
1:05:00 So misery, slight happiness. Misery, slight happiness, the average experience is miserable. So what do people do? They stop stepping on the scale. It’s an unpleasant experience.
1:05:10 And then the third thing, and we’ve done lots of research on this, is that people expect their bodies to react very quickly. So people say something like, they say to themselves, I have been on a diet since yesterday morning. I got up, I ate nothing, I had salad for lunch, I went for a run later, I did not salad for dinner, and now I stand on the scale, and nothing happens. Or worse, my weight went up. It fluctuates so much.
1:05:38 The body takes about 10 days to two weeks to react. But we don’t understand this. If we’ve been on diet for three days, we expect a quick change. So what did we decide to do? We look at all of these elements.
1:05:51 Scale is important, stepping in the morning, No gain aversion and no bad inferences. Because you know, imagine you’ll be on a diet for three days and then you gain a pound. And then you take a day off and then you lose half a pound. It’s very confusing and demotivating. So we decide to create a scale with no display.
1:06:13 We say let’s separate the act of stepping on a scale from the act of gaining feedback. It’s not the same thing. So we get people to step on a scale. If they step on a scale in the morning, we say, congratulations. You’ve done your job, that’s one.
1:06:25 And then we give people the feedback, not in terms of pounds, but in a five-point feedback mechanism. Within one standard deviation, just the same, slightly worse, slightly better, much worse, much better. And this is a running average of the last three weeks. And the reason this is better is that we’re trying to take away the variance, right? I mean, for me, information is not about historical accuracy, it’s about helping people understand the relationship between cause and effect, what I’ve done, what came out of it.
1:06:55 And if you start eating better, you should see an improvement. And if you start eating more dessert, you should see something going on. And the other thing we do is we celebrate nothing bad happened, which is also important, right? In health, we almost never celebrate. When you don’t get fat or when you don’t have a heart attack, right?
1:07:14 Yeah, so we did this study in a call center. This is with people who are basically low income and obese, a tough population to change their behavior. And some people got R scale, and some people got the regular scale that says you’re 189.2 pounds. The people got scale with regular reporting gained about 0.3% of their body weight every month for five months. This is a normal scale, basically, that tells you every day.
1:07:41 Brian Rose: Okay, so they gained some weight, right?
1:07:44 Dan Ariely: Every month, and then the people who got R scale lost 0.7% of their body weight every month for five months. Now, for me, that’s a beautiful result. Now, it’s not enough loss. We want to get to 1%.
1:07:56 But if you look at this and you say, my goodness, this scale has a lot of interesting psychology. If you have a scale in your bathroom, you’ve allocated two square feet of good real estate to something, and then on top of that, you recognize what are the things about it that motivate people and don’t motivate people. So we got, in our scale, 80% of the people stood up on a scale six times or more per week. Which is amazing, the regular scale, of course, people stop standing on it very quickly because it’s demotivating.
1:08:32 Brian Rose: And you don’t tell them the immediate weight reaction.
1:08:35 Dan Ariely: No. You just tell them. For the first 10 days, we tell them nothing. Nothing.
1:08:39 We just say.
1:08:40 Brian Rose: It’s very fascinating that the scale doesn’t say anything.
1:08:42 Dan Ariely: Well, we give them little feet. Right. We say you will tell them.
1:08:45 Dan Ariely: And then we start telling them, but it’s a five-point color scale, and that’s it. So access to information is not always a good thing. Access to information can be the right granularity. So imagine I measured your blood pressure, and I gave you your blood pressure feedback every five minutes. You would go crazy, you would be completely confused about what’s going on, because the reality is it’s not about information, it’s about understanding, cause, and effect.
1:09:15 You want to change some of your habits, some of your behaviors to get better outcome. Living in a world where things are structured all the time doesn’t help you.
1:09:25 Brian Rose: Right, so the diet book is coming next, I’m guessing.
1:09:29 Dan Ariely: Well, the scale’s coming. The scale’s coming next.
1:09:32 Brian Rose: Dan, I appreciate the time here today. I always ask my guests here a few questions at the end. I’m gonna ask you, based on everything you’ve learned with your research and human behavior, et cetera, if you could make a phone call to the 20-year-old Dan Ariely, give that young man a bit of advice. What would you tell him?
1:09:49 Dan Ariely: Are you still in the hospital at this point?
1:09:51 20 I am. So actually 20 was a very low point for me. Because you know, in the beginning I told you the injury was so difficult, I didn’t think about two days ahead. I just thought about. Dealing with the pain now.
1:10:07 And actually, as I was getting better, things were becoming more difficult and complex. So, and it was a very difficult time. It was a very difficult time. I’ll tell you, one thing that happens with scars is that as they heal, they start shrinking. So when there’s no skin, there’s no skin.
1:10:35 But later on, after they transplant the skin, if I would sit like this for two hours, I couldn’t straighten my hands. I would have to start slowly, slowly, slowly. You know how the kids do Indian burns? Like I would have to do this. And sometimes I couldn’t stretch it the whole way back and then they had to cut and put the new transplant.
1:10:54 So it was a period where I was out of danger but my body was betraying me. It was hard to figure out what my role in society would be, how much of an outcast I would be. I would have told myself that technology is at the aid of people with disabilities. Technology helps everybody, but disproportionately it helps people with disabilities. I would have told myself not to worry so much about fitting in the regular nine to five life, that I can make my own path and figure out whatever works for me, that I don’t have to follow the regular path of here’s what the job is and what the career is and so on.
1:12:02 I could use, I could take my, the constraint of my disability as a starting point to redesign my life from scratch and think about what works for me. And so this is a problem I’m still struggling with, you know, the question about work, non-work work harmony. What is in our sense of obligation? What is not? How do we manage our time? I would have probably told myself to be a bit more religious about doing something out of work.
