Ask Ariely: On Reading Labels, Regulating Risks, and Reproducing Compliments

Here’s my Q&A column from the WSJ this week  and if you have any questions for me, you can tweet them to @danariely with the hashtag #askariely, post a comment on my Ask Ariely Facebook page, or email them to AskAriely@wsj.com.

______________________________________________________

Dear Dan,

Whenever I go to the pharmacy or the supermarket, I find myself veering almost uncontrollably toward products that say “All Natural” on the label. Why?

—Avi

Some time ago, my Duke University colleagues and I carried out experiments on the appeal of natural medications. The results showed that when we see the word “natural,” we don’t necessarily think that the product works any better, but we do tend to believe that it works more harmoniously with our bodies, with fewer side effects. By contrast, when we tested this preference with other products (such as glasses, cars or desks made from natural materials), people clearly preferred the artificial versions. This suggests that our preference for the natural applies largely to things that go into our bodies, such as food and medications.

Such findings can be explained by what I call the “cave man theory,” which holds that, no matter how technologically advanced we may become, many of us still believe that our bodies were designed to function best in a long-ago era. So we try to eat what our ancestors ate and shun engineered products.

But this is just a belief, and it has little to do with reality. Some synthetic components are less harmful than their natural equivalents, and quite a few natural products (sugar, salt, cholesterol, saturated fats) are dangerous for us. Still, when we hear that a product is “natural,” we see it as part of the way that things should be.

______________________________________________________

Dear Dan,

Why are so many people reflexively opposed to the regulation of capital markets when the government strictly regulates so many other industries?

—Doug 

Consider an industry that is subject to much closer U.S. government regulation: pharmaceuticals. Since the early 1960s, when the morning-sickness drug thalidomide caused major birth defects in thousands of babies, drug companies have been required to prove a drug’s efficacy and safety before marketing it. The following decades have brought even more federal regulation of drugs.

Pharmaceuticals and capital markets have substantial similarities. Both industries make complex products that are hard to understand, both employ aggressive sales tactics, and both let consumers bear most of the risk.

So why are many more people opposed to regulating capital markets than pharmaceuticals? I suspect it has to do with our emotional reactions when things go wrong. A calamity with a new drug can mean illness and death, and we react powerfully against the perpetrators. By contrast, blunders in the financial markets produce, at worst, bankruptcies. The blame in these cases is more diffuse and the harm less emotionally charged—which means that we tend not to feel the same anger toward those responsible for the damage.

Of course, regulations should be based on the actual potential for harm, not on our emotional reactions, which is why I think we should more strictly regulate the financial markets and give more freedom for innovation to the pharmaceuticals market. ______________________________________________________

Dear Dan,

Recently, a friend told me that she wants to have my child. She meant it as a compliment, but I’m not sure if I should take it as one. What do you think?

—Daniel 

It sounds excellent on first blush, but what she’s really telling you is that she likes your genetic makeup, which you have very little to do with. She’s also telling you that your genes are the main thing that interests her. Give this particular compliment back to her, and ask for a different one.

See the original article in the Wall Street Journal here.