Dear Dan,
I work as a waiter in Waikiki, and sometimes to pass the time I conduct mini-experiments with customers, altering my behavior and attitude from day to day and seeing if it increases tips (in case you were wondering, seeming sad nets the most tips).
I have noticed that those paying with credit cards leave bigger tips, but it varies by card: American Express users tip the most, those with Visas a little less. Discover card users are by far the worst. I can’t quite figure this out.
—V
One possibility is that wealthier people get American Express cards, the less affluent Visa, and the least well-off Discover—and they tip accordingly. You should be able to test this hypothesis by looking at their spending patterns—for example, how much they spend on wine.
Another possibility is that credit cards have a priming influence. If a person takes out an American Express card and looks at it, its reputation as a premium card might make the owner feel richer and therefore more generous. These feelings would diminish with a Visa card and be present even less with a Discover card (which generally is of more modest repute).
My guess is that both of these hypotheses play a role in what you’ve observed. To be sure, we would need to experiment by having a group of people with multiple kinds of credit cards pay in similar situations using different cards. Then we’d see if and how they change their spending.
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Dear Dan,
I work with many entrepreneurs in their early innovation stage and am always intrigued by the strong (irrational) attachment they develop to their idea, often leading to their being blind to reality and to wasting time and money. How quickly do we get irrationally attached to our ideas? Is it based on elapsed time or on specific actions we take (such as presenting the idea to others)? What can be done to cure this?
—Omer
The problem, of course, is not just with entrepreneurs. From time to time we all experience someone in a meeting who says something random, and not particularly smart, but then insists that we follow up on his or her brilliant suggestion.
A few years ago, Daniel Mochon, Mike Norton and I conducted experiments about what we called “the IKEA effect”: As the instructions to build something become more challenging and complex, we love even more what we have created. We also showed that this effect takes place rather quickly. In perhaps the most interesting and irrational part of the whole story, we found out that we also mistakenly think other people will share in our excitement over our inferior creations.
What can we do about this? We could try to create an environment where ownership is less powerful or less associated with particular individuals. But if we manage to reduce or eliminate the feeling of ownership, are we also eliminating commitment and motivation? Maybe we should try to increase this sort of proprietary attachment. (And by the way, now that I have finished, I love my answer and think that it is very insightful.)
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Dear Dan,
After I’ve bought an expensive or limited-edition scotch, I worry about drinking the bottle too quickly or being unable to find more once it’s gone. So partly opened bottles in my closet keep accumulating. Any advice on how to enjoy my scotch rather than hoarding it?
—Jonathan
The problem with hoarding (collecting) is thinking about it as one decision at a time. I would either try to think about such questions from a broader perspective (“Would I be interested in getting 24 more bottles?”) or set up a rule for the number of bottles that you can have in your house at one time (let’s say 10). Then you’d have to finish a bottle or give it away before you acquire another.
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Dear Dan,
I have worked very hard for most of my life, and I am getting to feel more secure and comfortable. But I don’t feel as happy as I expected, given all my achievements and financial success. I am not one of those hippies who think that money is not important, but it feels like something is missing. What am I doing wrong?
—Matt
Don’t worry. The fact that your financial achievements have not brought you contentment does not mean that you’re a hippie. Social scientists have long been troubled by the finding that people basically think money will bring them happiness but it does so less than they expect.
There are two possibilities: First, that money cannot buy happiness. Second, that money can buy some happiness, but people just don’t know how to use it that way. The good news is that this seems to be the correct answer.
In their fascinating book “Happy Money: The Science of Smarter Spending,” Elizabeth Dunn and Michael Norton say there are two ways to get more happiness out of our money. The first is to buy less stuff and more experiences. We buy a sofa instead of a ski trip, not taking into account that we will get used to the sofa very quickly and that it will stop being a source of happiness, while the vacation will likely stay in our minds for a long time.
Second, and more interesting, Drs. Dunn and Norton demonstrate that we just don’t give enough money away. Which of these would make you happier: buying a cup of fancy coffee for yourself, buying one for a stranger, or buying one for a good friend? Buying a cup of coffee for yourself is the worst. Buying for a stranger will linger in your mind and make you happier for a longer time, and buying for a friend is the best—it would also increase your social connection, friendship and long-run happiness.
So money can buy happiness—if we use it right.
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Dear Dan,
I’m going to an out-of-town concert next month with friends and, as usual, I ended up organizing everything, booking a hotel room and fronting the money. When I’ve done this with groups in the past, I always end up spending the most on shared expenses, because they are never divided up evenly.
Perhaps I’m afraid to ask for large amounts of money, even though these are the true expenses that should be shared by everybody. What can I do to make sure that the bill for this upcoming show is split fairly?
—Scott
This is a question, in part, of how much you care about splitting the expenses evenly and how much responsibility you’re willing to take to improve the situation. I assume you’re willing to take this responsibility, so I suggest that you collect money from everyone in advance and pay all bills from this pool of money (and add 20% just in case, because we often don’t take all contingencies into account).
This way, everyone will pay the same amount, and bill-splitting will never come up. If there’s extra money, keep it for next year, or buy everyone a small gift to better remember the vacation.
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Dear Dan,
I have sometimes found myself walking behind a woman at night in an unsafe place and going in the same direction. Even though there is some distance between us, I can feel the doubt and worry in her mind. How do I handle this situation? Should I stop or say something? I have places to be, too, but clearly I don’t want the woman to feel unsafe.
—Steve
Simply pick up your cell phone and call your mother. In the world of suspicion, nobody who calls his mother at night could be considered a negative individual.
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Dear Dan,
My parents are about to put their house on the market in Scotland, where there’s a system of setting an asking price and having interested parties make sealed bids. Any advice on how to get the highest sale price?
—Moses
In auctions there are usually two forces: what people think the starting price of a house should be and how intense the competition gets between the bidders over time. Establishing a starting price for the bidding, it turns out, has an opposite effect on these forces.
If you set a high starting price, there’s a good chance that people will start thinking about the house from that point and offer a higher bid. On the other hand, if you set a low starting price, more people will get into the auction, the competition will be fiercer—and the outcome is likely to be a higher final price. (By the way, have you noticed that in auctions—on eBay, for example—the person who pays for the item at the end of the auction is called “the winner”? This suggests that competition is indeed a very strong driver.)
So if you have a sealed-bid auction in which people can submit a bid only once, go with a high starting price. But if there are multiple rounds of bidding, think of the starting price as a lure for getting many bidders involved at the get-go.
Last week I met with a friend in San Francisco (let’s call him JC) who is house-hunting. He said that the houses he has bid for sold for about 30% to 40% more than the asking prices. The competition has been intense, the process very frustrating, which brings me to a final point: A bidding frenzy might be good for a seller, but since we are all going to be buyers and sellers at some point, it’s not clear that the overall market for housing is better off with this procedure.
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Dear Dan,
I am a longtime Netflix customer. Recently, Netflix removed about 1,800 movies from its service, while adding a few very good ones. I know I probably never would have watched those 1,800 movies, but I am upset and am seriously considering leaving Netflix. Why do I feel this way?
—Kristine
As a movie man myself, I appreciate your perspective. The basic principle at work here is loss aversion: the idea that losing something has a stronger emotional impact than gaining something of the same value. Even though the deleted movies were probably not that great and the current library of Netflix may be, objectively, much better, having movies taken away from you feels like a painful loss.
One way to think about this is to contrast new and old Netflix users. A new one would just look at the overall quality of the movie collection, which may be better than it used to be. For the old user, however, the current collection is just one part of the experience, while the loss of all those movies is another. As a result, the longtime member may be much less happy.
My suggestion is for you to try thinking about Netflix as a service that provides you not with particular movies but with an optimal, curated variety of films. Compare it to a museum: We don’t think of ourselves as owning any of the art, so we aren’t upset when it changes what’s on view from its collection. If you can reframe your perspective this way, my guess is that you will enjoy Netflix more.
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Dear Dan,
A friend once chided me for laughing at my own joke. Is it wrong to laugh at your own jokes? After all, would I tell a joke that I didn’t think was funny?
—Norma
Jokes often hinge on a surprise ending, so laughing at a joke though you know the end seems to be a great endorsement for it (please send me the joke!). The only negative connotation I can imagine is that maybe your friend assumed the laughter was not genuine and you were trying to manipulate her into a higher level of enjoyment. In that case, you might want to look for a different friend.
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Dear Dan,
My partner and I live in a pretty 250-townhouse condo development, but we have a problem with people who don’t clean up after their dogs. Some are residents of our condo, but others are just passing through. Our condo fees pay someone big bucks to clean up after the dogs, and there’s a $50 fine when owners fail to clean up after their dogs. But you have to know who the dog owner is, catch him in the act, and report him to the condo corporation. This policy is not working. What can we do?
—Rachelle
We need to consider two forces in this situation: the positive force of social norms and the negative force of deterrence.
In terms of social norms, a great deal of research shows that what people do is less a function of what’s legal than of what they find socially acceptable. So if dog owners see a lot of droppings around the condo area, they will find it perfectly acceptable to continue in this tradition, but they would feel guilty leaving some doggy souvenirs behind if the grounds were pristine. So what is the lesson from social norms? For one, it means that violators are not only acting selfishly but are also making it more likely that others will follow. It also means that you should work extra hard to establish a better social norm—because once the social norm is set to clean up after the dogs, the good behavior will maintain itself.
In terms of deterrence, you can’t do much about outsiders, but I think you should try something more exotic with your condo neighbors. The way I see it, in the current “game” the dog owners try to hide the droppings, and the managers try to catch and punish the owners. I would try to alter the game so that it’s among the condo dog owners.
What if the condo management put money in a community fund to pay for a droppings-cleaner, as needed, and used whatever was left at the end of the month for a get-together for all dog owners and their dogs? If lots of money remained each month, the party would include food, drinks and doggy treats; if there was no money, it would just be water. This way, failing to clean up after the dogs would damage the community—the personal and social cost of these actions would increase—and people would be more careful.
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Dear Dan,
My friend recently started working at a consultancy. We’d both heard about the brutally long working hours, but what surprised us was how people prized the number of hours they clocked, even when this went up to a ridiculous 16 hours a day. In this age when people are almost forced to have varied interests to define themselves, why would the consultants be shouting their boring lifestyles from the rooftops?
—Tushna
This kind of behavior might seem odd, but there are a few ways to reason about it. First, I suspect that in the world of consulting it is hard to estimate directly how good any particular individual is. If you worked in such a place, you would want your managers to know how good you are—but if they couldn’t directly see your quality, what would you do? Working many hours and telling everyone about it might be the best way to give your employer a sense of your commitment—which they might even confuse with your quality.
This is a general tendency. Every time we can’t evaluate the real thing we are interested in, we find something easy to evaluate and make an inference based on it. I often hear people complain, for example, about the cleanliness of airplane bathrooms. The reality is that we don’t really care about the bathrooms—what we should all care about is the functioning of the engines. But engines are hard to evaluate, so we focus on the bathrooms. Maybe people reason that if the airline is taking care of the bathrooms, it is probably taking care of the engines a well.
Another possibility: Your friend could be using the long working ours to keep score in some competition with his friends at work. This may not be the smartest contest, but people are highly motivated to win in almost every aspect of life—just look at the range of dares and ridiculous competitions on TV. From this perspective, maybe this is not the worst sort of competition for your friend to get into.
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Dear Dan,
In your last column you gave advice about the need to experience other people’s kids in order to decide if you should or should not have kids of your own. Does that advice hold for deciding if I should or should not marry my current girlfriend?
—Nick
In general, it is advisable to carry out experiments in a way that matches as much as possible the circumstances that you want to understand (in this case, how it would feel to be with this person for decades to come), so I would recommend spending two weeks with your girlfriend’s mother.
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Dear Dan,
I don’t care about cars, never have. But I’m a sales executive, and people tell me I should own a nice car (BMW, Mercedes, etc.) to enhance my credibility to both my customers and sales team. I can afford either but would rather save the cash and buy a Honda. Does it matter?
—Cody
The topic here is signaling. The large and colorful tail of the male peacock tells the female peacock about his strength and virility (if I can run around carrying this large and difficult tail, just imagine how strong I am). In the same way, we humans are concerned with the signals we send the people around us about who we are. Signaling is part of the reason we buy large homes, dress up in designer clothes and buy particular cars. So the answer to your question is yes. The car that you drive communicates something about you to the world. Does it matter? Yes again, because we are constantly reading these signals and making inferences about the senders.
But some questions remain. What kind of signal do you want to send? The BMW signal or the Prius signal? Maybe the signal that you buy American-made? Maybe you want to get a really old car and show people that you take really good care of it (a more subtle signal, but an interesting one). Another question is whether the cost of the signal (the cost of the car) is worth its signaling value. This depends on the nature of the people you deal with, how well they know you, how often you make first impressions, etc.
In the interest of full disclosure, I should say that I drive a minivan—but now that I am thinking about it, maybe I should go and stick a Porsche logo on it.
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Dear Dan,
My wife and I are in our late 30s, and we are debating whether or not to have kids. Any advice?
—Henry
The decision on whether or not to have kids is very complex. It depends on many factors, including your financial situation, your preferences and your relationship with your significant other. So, sadly, I can’t provide any direct answer to your question. Obviously, though, this is one of the most important decisions you will ever make—and given its magnitude, you should spend a substantial amount of time trying to get to the bottom of it.
The question about having kids, like many other questions, is all about what you might get from this experience and what you might have to give up. The problem is that before you have kids, it is hard to estimate both the benefits and the costs. So what should you do? You need to try to simulate the kid-experience in order to have a better understanding of what it means and how it would fit you.
For example, why don’t you move in for a week with some of your friends who have kids and observe them up close? Next, why don’t you offer to take care of some other friends’ kids for a week? Then try to expand this exercise and take care of kids of different age groups (don’t skip very young kids and teenagers). After 10 weeks of this experiment, you should be in a much better position to figure out if this is for you or not.
If this exercise seems too daunting for you, you probably fall into one of two categories: 1) You’re not really interested in an empirical answer to this question. Perhaps you’ve already made up your mind, and you’re not yet ready to admit it. 2) You’re too lazy to put the effort into figuring this out. And if that is the case, you probably should not have kids.
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Dear Dan,
I hate tax day. Is there any way to make it more pleasant?
—James
When I first starting filling out the 1040EZ form, I loved tax day. It was a day when I got to think about how much money I made, how much I gave the government (another way to think about it is to think about how much the government takes, but I prefer my framing), and what benefits I got in return from the federal and state governments.
Over the years my taxes have become more complex, and my annoyance with the complexity and ambiguity makes it harder for me to focus on taxes as part of my role and duty as a citizen of this amazing country.
So what can we do to make tax day better? The word mitzva in Hebrew means both a duty and a privilege, and one thing I try to do (not always successfully) is to think about taxes as a mitzva.
I also think that the tax code has to change if we are to experience this day as a day of citizenship and not just annoyance. The tax code needs to be much simpler, and taxes need to be more equitable. Finally, there are some nice experimental results showing that if you ask people to take an active role and vote on where a small part of their taxes goes (education, infrastructure, military, health, etc.), this improves their attitude toward taxes.
Happy mitzva day.
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Dear Dan,
I am writing to you from a train in Germany, sitting on the floor. The train is crowded, and all the seats are taken. However, there is a special class of “comfort customers” who can make those already seated give up their seats. This status is given to those (like me) who travel a lot on the train. It would be nice to get a seat and, according to the rules, I deserve one. But I can’t see myself asking one of the “non-comfort customers” to give up his seat. Why is this so difficult for me?
—Frederick
Your question has to do with what we call the “identifiable victim effect.” The basic idea is that when we see one person in need, our hearts go out to them—we care and we help. But when the problem is very large or far away, or we don’t see the person who is suffering, we don’t care to the same degree—and we don’t help.
In your case, I suspect that if the train conductor were the one picking a random passenger to clear a seat for you—and especially if the conductor did it before you boarded the train—you would have been able to enjoy the seat. Taking this a step further, if you knew who that person was (for example, if the conductor pointed him or her out), you would have felt worse. Picking the person yourself is most likely the most difficult, because you would have no choice but to see the effect of your actions on the other person, as well as his or her reaction.
What’s the lesson here? It’s that direct contact with other people makes us care and act accordingly. And when the distance is great, or the actions are taken without our knowledge, we care much less. Now the question is how to get politicians, bankers, CEOs and everyone else to feel more directly the consequences of our actions on the well-being of others.
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Dear Dan,
I work for a government agency that is in the early stages of making telecommuting an option for its workforce. The idea is generating a lot of distrust among managers, and Yahoo, of course, just cracked down in this area. I know that managers are supposed to trust their workers, but it seems obvious that employees will work less from home. What is your take on working from home?
—Julisa
There are lots of possible reasons for the recent decision at Yahoo—some benevolent and some malevolent. Let me focus here on just two of them: work and attention. In terms of expected hours, those who work in an office are exposed to two different standards: the 40-hours-a-week official standard and the standard that is set by the people around them. We all know, for instance, that the social standard in the high-tech industry is much higher than the official 40 hours a week. In such cases, people who work in the office will conform to the social standard and work many more hours. For those who work from home, the 40-hour workweek is going to be a highly salient reference, and accordingly they are likely to adopt this as a reasonable commitment to work.
In terms of attention to the work, my own experience tells me that when people are together in the same room, they pay attention and focus on the task at hand with much of their cognitive capacity. But when people are at a remote site, participating via phone or video conferencing, they are not fully engaged and in many cases they even try (unsuccessfully) to multitask during important meetings.
My mother, by the way, always knows when I try to multitask while talking to her, so maybe Yahoo should hire her to monitor their online conferences and to reprimand those who aren’t focusing sufficiently.
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Dear Dan,
What is the best way to make sure Americans have sufficient funds for retirement?
—Ben
There are basically two ways to help people have enough money for retirement: getting them to save more and getting them to die younger. The easier one by far is getting people to die younger. How might you achieve this? By allowing the citizens to smoke, subsidizing sugary and fatty foods, and making it hard for them to get access to preventative health care. But, when you think about this, it seems like we’re already doing most of what we can on this front.
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Dear Dan,
My boyfriend and I have been together for a while, and people ask us whether we’re going to get married. We get along great and love each other very much, but I just don’t see the point of marriage. Why not just live together in a civil union and be happy the way things are? Aside from the cost, is there any point to this elaborate ritual?
—Janet
I have no research on this topic, but allow me to share a story that might help you to think about the question.
When I was 19 and spending time in a hospital in Israel, recovering from severe burns, I had a friend there named David, who had been badly injured in the army while disassembling a land mine. He lost one of his hands and an eye and also had injuries to his legs and some scars. When Rachel, his girlfriend of several months, broke up with him, the other patients in the department were furious with her. How could she be so disloyal and shallow? Did their love mean nothing to her? Interestingly, David was better able to see her side, and he was not as negative as the rest of us about her decision.
Think about Rachel in the story above. Does her behavior upset you? How might your feelings differ if it had been a longer-term relationship, if they were engaged or in a civil union, or if they were married? And how would you behave if you were in Rachel’s position in each of these relationships?
I suspect that your level of scorn for Rachel will depend to a large degree on the type of relationship she had with David. I also suspect that your predictions about your own decision to stick with a partner who just experienced an awful injury would similarly depend on the type of relationship. If your assessment changes when you stipulate that David and Rachel were married, this suggests that publicly saying “for better and for worse” really means something to you.
Obviously, marriage is not some magical superglue for relationships; the high divorce rate is no secret. But marriage can serve a very real purpose by bolstering commitment and feeling in long-term relationships, all of which inevitably hit rough patches. So while I wouldn’t advocate marriage in all situations, I do think it’s worth thinking about the ways in which it can strengthen the bond between people.
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Dear Dan,
When I go to a public bathroom, I often think about which stall I should use. Any advice?
—Cathy
I assume that your practical aim is to figure out which bathroom stall is likely to have been used the least. But what you are really asking is what drives other peoples’ choices in this important domain.
If those who patronize public bathrooms usually choose a stall based on which toilet they think is used the least, they will all choose the one they think is used least—which as a result, ironically, would be that most of them would use the same toilet. Therefore, you would be advised to pick the opposite (i.e., the stall that people think gets the most traffic). Following this logic, if people expect the stall farthest from the entrance to be the most popular, they will avoid using it—leaving it relatively more clean and unused than the others.
But what happens if people are more sophisticated than that? What if they come to the restroom with this same understanding and as a consequence pick what they think is the opposite of what other people think, or the opposite of the opposite?
All of this boils down to a more essential question: How sophisticated do you think other people are?
Personally, I believe people generally take about one step in their logical thinking. So I would say: Choose the opposite of the opposite and select the stall that people think will be used the most.
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Dear Dan,
I enjoy Twitter, but I find that some people tweet very frequently, sometime as often as a dozen times an hour. When their face shows up again and again, I begin ignoring their messages. By contrast, when people tweet just once a day, I’m more likely to pay attention to what they say. Is this just me or does it reflect a larger principle?
—Heidi
I suspect that this feeling is very common. I also imagine that very few people have dozens of interesting things to say a day, much less an hour. Perhaps Twitter is a place where a system based on limits and scarcity (maybe two tweets a day) would be better for everyone.
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Dear Dan,
I was recently approached by a panhandler who asked me for 75 cents, and I gave him the money. I was late for my train, so I didn’t have time to stop and try to understand why he chose 75 cents. But I wonder: Do you think the 75-cent request could be a “market tested” amount, one that yields a higher overall level of “donations” than asking outright for a buck or more.
—Brad
The panhandler could be trying to make a unique request in order to separate himself from the competition. But my guess is that you were more willing to give him money because you inferred things from the specificity of his request.
When someone tells us to meet them at 8:03, we come to a different conclusion about how seriously they mean that exact time as compared with their telling us to meet them at 8 or 8-ish. In the same way, a request for exactly 75 cents may carry a set of inferences about how seriously the person needs the money. It may lead us to think there is a specific reason for the request, like getting enough for bus fare. Plus, even if he asks for 75 cents, it’s likely that people will give $1 and not wait for change.
You could argue that the same principle would apply if he asked for $1.25, but in this case the size of the request might deter some people, and if they don’t have exact change, giving $2 might be too much. This is just speculation, though. If you are willing to volunteer as an experimenter for a few days, we can gather some real data and get to the bottom of this.
What lessons can we draw from this strategy? First, think about the inferences that people make from the exact way that we request something. Second, asking for general help is unlikely to be as effective as asking for exactly what we need.
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Dear Dan,
In a restaurant where waiters pool their tips, could they actually receive more tips overall by employing a “good waiter/bad waiter” routine, where one waiter is surly and unhelpful, then another waiter steps in who is friendly and goes above and beyond in serving the client? I suspect that the scheme might cause the customer to leave a larger tip for the second waiter, which will ultimately be pooled with the tips of the “bad” waiter.
—David
I agree with your analysis. And for it to work, you don’t even need the waiters to share their tips—they could just alternate roles.
A friend who worked for a large consumer-products company was trying to change the company’s service motto from “we do things right for our customers” to “we mess up the first time, but then we fix it.” His idea (which upper management rejected, by they way) was that when people expect and receive good customer service, it draws no attention, and they just take it for granted (you can think of parallels to romantic relationships as well). But if we give customers a contrast between good and bad service (as at a restaurant), they may start to notice and appreciate good service more.
I suspect that some industries may have already picked up on this idea, and that airport restaurants are leading the charge by providing the training grounds for delivering bad service most effectively.
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Dear Dan,
I graduated from college a few years ago, and since then my social life has been limited to Facebook. And it is far from satisfying.
—James
Facebook has many wonderful aspects, but I agree that it is no substitute for human contact. If you ever feel that nobody really cares whether you’re alive, try missing a couple of student loan payments.
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Dear Dan,
I recently had a job interview on a rainy day, and it went very poorly. I made a point of getting to the interview site early, and I relaxed by buying a cup of tea and sitting down to read at a local coffee shop. The book I was reading at the time was a policy manifesto by two political theorists whose views I strongly disagree with.
Which is more likely to have contributed to my poor job-interview performance: the cold and miserable January weather or spending 20 minutes reading ideas I greatly dislike? Which is more important for job candidates before a big interview: consulting the weather forecast or spending time reading material that makes them happy?
—Jay
Sorry about the outcome of the interview, but the lesson from this episode might be worthwhile in the long term. I suspect that you had some implicit emotions based on the weather and the book, but the way you experienced these emotions was more general and diffuse. In your mind, your mood was connected to everything around you, which made you uncomfortable about everything you experienced—including, unfortunately, the interview. Assuming that you don’t have a perfect poker face, your feelings must have been apparent to the interviewer, and your overall appeal went down.
Though I suspect that both the weather and the book contributed to your negative mood, if I had to guess I’d vote for the book as having the larger impact. For your next interview, take a funny book with you, and with a thick marker write on your underwear “I am the best.” Both of these methods of preparation should put you in a good mood and improve your chances. Good luck.
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Dear Dan,
Are there people who are just lucky? I think so—only I’m not one of them.
—Amy
I think some people are luckier, but it’s not the kind of luck that gets you more money at the roulette wheel. Luckier people tend to try more frequently, and by trying more often they also succeed more. Think about a basketball player who attempts to shoot three times in a game, compared with one who tries 30 times. Even if the first one has a better shooting percentage, in absolute numbers, you can’t compare the two.
On top of that, if you notice the successes of other people and don’t pay much attention to their failures, you will basically see the absolute number of successes and not notice the percentage of successes.
So, what’s the advice? First, life is a numbers game—so try more frequently. Second, it’s good to look at the number of things that other people attempt—not just their successes.
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Dear Dan,
In one of the chapters of “The Upside of Irrationality” you suggest a canoe ride as a good indicator of the success of a future relationship, since it often gives one person plenty of opportunity to blame the other for things that go wrong. Here is the question: Would it matter that one of the participants knows it’s a test?
Before my ex-wife and I got married, we did go on a canoe ride, and it was the worst experience ever. Just to add to your statistics…
—Oren
Like most tests in life, the canoe trial works best when the people in question don’t know they are taking part in a test. Tests make us feel that watchful eyes are on us, so we try to put on our best behavior. If your loved one knows about it, the test is not valid.
Now that I think about it, maybe the real trick is to try to persuade your partner that she is often in a test and being watched. I have always suspected that once people have the Nielsen ratings machines installed in their homes they start watching more PBS and fewer reality shows.
Maybe if you persuaded your significant other that you have some “Ariely Romantic Ratings Machine” installed in your house, your domestic life will improve. Perhaps you should start a company to provide such a service?
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Dear Dan,
I’ve struggled with a few major “I wish I could change this” type behaviors for years. Back when I worked in downtown Manhattan, colleagues would religiously bring their own lunch, thermos of coffee, or whatever, and save money on eating out. I often mused that I could probably fund my retirement or at least a few good vacations with all the money I spent on decent but forgettable food.
Well, recently I started a new job at a big company where the only real food option is its own cafeteria—which serves awful food at market prices.
Lo and behold: This cafeteria so insults and annoys me that I’ve been able to fix my long-standing bad habit. Every night before bed, I simply fill up some Tupperware with dinner leftovers. Or I grab a yogurt, make a PB&J—whatever it takes. What lesson can I take from this?
P.S. I’ve been following your podcast, Arming the Donkeys, for years, but I have to tell you the sound could sometimes be better.
—Jennifer
This is a classic case where having all the right information was simply not enough to drive your desired behavior. We know, for example, that telling people about the caloric content of fast food has almost no effect on eating, and that knowing the dangers of texting at the wheel hasn’t exactly moved the needle on safe driving.
We also know that emotions are often much more effective in getting people to behave differently. In your case, disgust and indignation—which can be extremely powerful and motivating.
The good news is that once your emotions instigated this change, you found it easy to change your behavior, and with time this change may even become a habit. At that point, even if you stop being angry at the cafeteria (or you switch jobs), the habit and joy of bringing your own lunch will persist.
P.S. With regard to my podcast, I’ve been thinking about getting a higher quality recorder for a while. Knowing that you’re motivated by anger and revenge, I will get right on it. Thank you.
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Dear Dan,
As a recent college grad, I often find myself coming up with off-the-wall, out-of-the-box, borderline idiotic ideas of what to do with the rest of my life. One day I’ll be thinking of how much I enjoy my job; the next I’ll be considering dropping everything and running off to another country, starting my own business, launching a singing career or pursing higher education in something unrelated to my field, like behavioral economics. I’ll often stew on these ideas before setting them aside, only to revisit them every few months. How can I tell when my ideas are actually legitimate notions or nothing but half-baked schemes?
—Josh G.
First, I am impressed that you’re considering so many different types of jobs. (And I may be biased, but I agree that a career in behavioral economics would be pretty interesting.) In general it amazes me how few possible career paths people consider before picking one to stick to indefinitely.
As for your question: It’s useful to think about two aspects of your job choices: What will make you happy (which is the only aspect people usually consider) and what jobs will be able to teach you something important. If I were you, I would make a list of possible jobs and rate each one on both measures. Next, figure out what your goal is right now (as a recent college grad, you may want to focus more on what you can learn) and then pick the job from the list that best satisfies this goal. Finally, commit to that job for at least a year without looking back.
What you shouldn’t do is stay in one job and think about how different your life would be if you took another. This is a bit like dating one person but constantly checking Match.com to see what other options you might have. It takes away from the enjoyment of your current relationship or job and your commitment to it. So, whatever you do, sticking to your chosen path of action is key.
And if you do end up switching jobs, please don’t tell your parents that you did it on account of my advice.
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Dear Dan,
As we get closer to Valentine’s Day, I am wondering, why do women like jewelry and flowers? Wouldn’t it be better if they liked the kind of things that men liked to shop for?
—Jon
One way to view this discrepancy is that women like these things exactly because men hate shopping for them. If you purchased something for your loved one that you enjoyed shopping for, this would be nice, but having to overcome your aversion to shopping for these items is a much stronger signal of your love and care. So this year, when you are shopping for jewelry or flowers for your soul mate, remind her what a pain it was for you.
And Happy Valentine’s Day.
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Dear Dan,
Yet another random person on the internet who finds your research interesting and illuminating.
The current bit of economics controversy in the news left me wondering about your take on the trillion dollar platinum coin as a means for avoiding a US default via the debt ceiling. There’s debate on the legality, but there’s also the broader political question of whether or not it’s a “good idea” — which depends on what principles you work from to measure how “good” a consequence is. This leaves me wondering about YOUR expectation about the possible outcomes of such a move.
—abb3w
In my mind, the real issue here is trust. After all, with the amount of debt that the US has right now, we are at the hand of our creditors. If one day they decided to knock on our proverbial door and ask for their money back, we would be in deep trouble. From this perspective, the question is whether such a “trillion dollar platinum coin” would make us appear more trustworthy (as a creative nation that comes up with innovative solutions), or less trustworthy (as a nation that has to resort to shady maneuvers to manage its internal debates). If I had to bet, I would guess that other countries would take the less favorable interpretation of such a move. Moreover, as we know, ones’ initial perspective colors the interpretation of new data, and given the economic hernia that the US has created or contributed to, my guess is that trust in our financial system is not something to write home about.
With all of this in mind, I would try to make the next financial deal one that improves the way that the world looks at our financial health.
(Plus, you can buy a trillion dollar platinum coin for $19.95 on ebay)
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Dear Dan,
While I’m watching sports, I often find myself with the same problem. I will have too many chips for my dip, but if I open up another can of dip I’ll have too much dip for my chips. I don’t want the extra can of dip to go to waste, but I don’t want to have to eat dry chips. What should I do?
—Chris
This is indeed an important problem! What you are experiencing is a problem with ending rules. The chips and dip each provide an experience for you that ends at a different time, making it hard to figure out when to stop.
One solution would be to convince the chip and dip manufacturers to bundle packages that complement each other in terms of size. Another approach would involve pacing yourself from the get-go in terms of the chip-to-dip ratio. A third idea would be to invite a friend who only likes chips (or dislikes the dip you have).
More seriously, the problem you are describing is part of a more general issue, as Brian Wansink shows in his wonderful book “Mindless Eating: Why We Eat More Than We Think.” We don’t stop eating when we have had a sufficient amount of food, but when we’ve finished everything on the plate. The best approach may be to think about how much chips-and-dip you want to consume, transfer that amount to small dishes, and stop making decisions based on the size of the packaging.
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Dear Dan,
In “Predictably Irrational,” you wrote about the “Effect of Expectations,” and you demonstrated that we are prone to perceiving things as being more like what we expect them to be than as what they actually are. As an example, you showed that we would experience a glass of wine as better if we had seen positive reviews of it before tasting it. Well, these findings mostly fit with my own experience; however, what you didn’t mention is the possibility of a negative effect for expectations that are too good. In other words, is the effect the same when something is extremely overhyped?
My own observation is that when I passionately recommend a movie to my friends, sometimes their feedback is: “It wasn’t that good. I thought it would be really amazing.” I suspect that they’re experiencing a negative feeling toward the movie because I over-hyped it. Do you think that overhyped expectations can backfire?
—Omid Sani
My intuition is basically the same as yours. When I overhype something, I also feel like people end up with very high expectations (that is, assuming they trust my opinion) and that this can decrease their enjoyment of the experience.
Here is how I view the issue: Heightened expectations can change our experience by (let’s say) 20%, which means that as long as the increased expectations are within this range, the expectation can “pull” the experience and influence it. But when expectations are too extreme (let’s say 60% heightened), the gap with reality becomes too wide, and they may backfire and reduce enjoyment.
If you want your friends to experience something as better than it truly is, go for it and exaggerate. But don’t exaggerate by too much. This kind of “fudge zone” also suggests that in areas of life where people are not experts, you can exaggerate a bit more.
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Dear Dan,
I’m at a loss for understanding the popularity of gossip newspapers and magazines? What is the attraction??
—Dave
I don’t understand it myself, but I suspect that some of the attraction has to do with social coordination.
I have never been in a discussion where people said “I only wish we had more time to talk about the weather / sports / gossip.” But, given the need to find common topics for discussion, these are some of the easiest common denominators to find.
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Dear Dan,
My best buddies and I have a tradition of going on a one-week ski trip once a year. We’ve been doing it for most of the past decade. The idea is that it’s just us guys on the mountain, enjoying the good company and snow. We cherish these moments and can’t wait for the week to arrive every year. The problem is that once we land at our ski destination, time seems to go by at light speed. The week ends amazingly quickly and when we look back at our time together it seems even shorter. I know that “time flies when you are having fun,” but is there a way to perceive the week as longer?
—Avi
Given the way you phrased the question, the answer is simple: Take your wives with you. (Sorry, I couldn’t resist.)
But more to the point: I suspect that one of the reasons that your vacations seem so short, both in the experience and in your memory after the fact, is because the days of skiing are so similar to each other that they blend together in your memory into one very long day rather than a weeklong vacation.
On your next trip, try to make the days more differentiated from one another. Try snowboarding one day, take a lesson on another day, or just change your ski equipment from time to time. You could take a day off from skiing and go sledding or meet the locals. The point is that even if some days wind up with activities that you enjoy less at the moment (like bowling, for example), the ability to differentiate that day from the other days will help you categorize the vacation as a series of distinct experiences instead of one big glob of skiing. This way, you will get more joy from the memory of these experiences.
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Dear Dan,
A few weeks ago in your column you suggested spinning a penny as a way to make decisions between two similar options. You argued that having to face the moment of truth makes us realize what we really want as the outcome.
This approach might be useful when deep down inside it is clear which way you want the penny to fall, but what about decisions where what you desire is not good for you? For example, when the decision is between chocolate cake and fruit. In this case, you know very well how you want the coin to fall, and flipping the coin doesn’t seem to be very useful.
—Gavin
You’re right. The coin trick is indeed only useful for cases where the two options are of the same type (two cameras, two movies, etc). In your example, one option is more tempting in the short term (chocolate cake) while the other is better in the long term (fruit). In such cases we should not trust our gut feelings to drive us to the best decisions.
Looking around, it is easy to see that we often succumb to temptation and take the option that has short-term benefits and long-term downsides (in your example, this is the chocolate cake). The basic problem is that when we make such decisions we are often “under the influence” of the chocolate cake. Its closeness blinds us to the comparative long-term benefits of a piece of fruit (or, simply not eating the cake). So what can we do? Every time you face such decisions, pretend that it is not about what to do now but what you would like to do a week from now. For example, think of the choice between chocolate cake and fruit for dessert as a decision that you are making for exactly one week from today. When the choice is framed this way, you might be more able to override the influence of your current emotional state and pick the option with long-term benefits.
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Dear Dan,
I just bought a pair of basketball tickets and I plan to treat my friend to an afternoon of slack-jawed wonder as Kevin Durant dismantles our hometown Raptors. Here’s the thing: My friend is very generous and semiwealthy. If I tell him the tickets are on me, he’ll insist on paying…but if I tell him the tickets were free (the only way he’ll let me off the hook about the price), I’ll lose that weird cachet that comes from giving an expensive gift. What to do?
—Gil
Here is what I would do: Take your income per month (for simplicity, say $10,000) and divide it by the cost of the two tickets (again for simplicity, say $200). Now multiply this number by the number of hours you work per month (let’s say 160), and you get the numbers of hours that you need to work to pay for the tickets (3.2 hours in this case). Now, tell your friend “it took me more than 3 hours of hard labor to get these tickets.” (After all, you might not want to tell your friend exactly how much you make.) With this kind of framing, not only will your friend not be able to pay for the tickets, but he will also appreciate your investment in him and your friendship to a higher degree.
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Hi Dan!
Every year it’s the same problem: My husband and I struggle to get his dad a few perfect gifts, only to see them sit unused for eternity. These are good things, too, expensive and high quality—specialty tools for his car, toolboxes, super-handy gadgets, etc. But years later, the tools sit there unopened and the toolbox has dust on it. He still carries his broken wrenches and stripped screwdrivers around in a ripped plastic sack!
OK, an old story, I know. But would it be so wrong if we just took the gifts back? He doesn’t want them. We could use them ourselves. Since the objects were “ours” at one point, we feel that we still retain some residual interest in what happens to them. Is it because we invested so much thought and effort in acquiring them?
Thanks for all your good works, and happy holidays!
—Veronica
No, you may not take the gifts back. (Note that I didn’t write “your gifts,” because I don’t think you should picture them as yours.)
The sad thing is that you and your husband feel unappreciated because your thoughtful and expensive gifts are not bringing the dear old man the happiness that you hoped to give him. Instead of taking the gifts back, I would try to increase the likelihood that the tools will get used. First, I would take them out of their packaging and replace the old tools in his plastic sack with the new ones—thereby making the act of using them more likely. As for the old tools, just put them in the attic for now.
If your father-in-law protests, I would restore his old tool kit and suggest spring cleaning and the donation of unused household goods to a local charity. He might be willing to give the new tools up for a good cause. And if that doesn’t work, stage a robbery and steal them, leaving cash and other valuables untouched. The added benefit of this approach is that it might also show your father-in-law how valuable your gifts are.
As for this year, buy him something that gets better over time, such as good whiskey or wine. That way, if he doesn’t use it, it will at least grow in value and not bother you as much.
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Dear Dan,
I bought two bottles of wine at a wine store that was running a “Buy one, get another for five cents” deal. The first bottle was priced at $16.99. I bought the second one, a different wine but listed for the same price, for five cents.
If I’m going to take one of the bottles for a holiday dinner at a close friend’s house, which wine should I take? Will the fact that I paid only five cents make me take that one over the full-priced bottle?
—Rags
We’ve known for a long time that there’s a correlation between what you pay for a wine and how good it tastes to you, but this correlation only exists, of course, when people know the price. As Robin Goldstein from http://www.fearlesscritic.com has shown, when people don’t know how much a wine costs, there’s no correlation between the price and how good they think it is.
Taking this into account, the first question you should ask yourself is whether to tell your friends about the cost of the wine or not. If you don’t tell them, then there’s no problem—just take the cheap one. It is true that by knowing the price that you paid for it, you will enjoy it less, but everyone else will be just fine. On the other hand, if you decide to tell them the price, I would suggest bringing the $16.99 Bottle, and maybe even include the cost of driving to the wine store.
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Dear Dan,
Do you believe in New Year’s resolutions?
—Janet
Yes. Every year for about a week: for about five days before New Year’s Day and for about two days after.
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Dear Dan,
I was the whistleblower for a very large corporate disaster. Since the whistleblowing, I have been shocked at the vitriol and social exclusion I have suffered as a result of speaking the truth. What is it about whistleblowers that makes society want to exclude them? Any insights and guidance would be most welcome.
—Wendy
From what I understand, the backlash you are experiencing is very common among whistleblowers.
In thinking about your issue, I reflected on why I want my kids (ages 10 and 6) to solve their problems themselves, without involving higher authorities (their parents). Tattling is considered very negative behavior. Of course, sometimes my kids have legitimate claims that require an intervention from the “authorities,” but my negative reaction to tattling suggests that I’m willing to accept some violations of justice in order to have the problems solved internally.
Perhaps the friends of whistleblowers see them as not truly part of the social circle, since they’ve shown willingness to seek external authorities when conflicts emerge. Maybe your social exclusion is due to a belief that when problems emerge in the future, you will again look for an external authority? If you were Tom Sawyer, you could cut your hand and mix your blood with that of your friends to symbolize your connection, but given that this might not work for your age group, perhaps you need to find a related ritual that will show your commitment to the social group.
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Dear Dan,
I live in a quasi-urban area near Washington, D.C., don’t own a car and take the metro to work. Near my home is a fleet of Zipcars (a car-sharing system starting at $8 an hour, including gas, insurance and up to 180 miles of driving in a day). If I bought a car, the monthly costs alone (insurance, parking) would amount to about $200; then there’s the purchase of the car, gas and tolls. For that money I could regularly rent Zipcars.
So why don’t I? I could go to different restaurants and entertainment. But each time I think of doing this, I ask myself whether I want to spend the extra money to rent the car and usually decide against it.
This issue comes up the most with groceries. There’s a fantastic supermarket a quick drive away that sells much better and cheaper produce than my local store. In the end, I feel like I’m choosing between (1) overpaying at my local store and feeling cheated and (2) going to the better store but also feeling cheated because I spent $30 on a Zipcar to save that same amount on groceries. What do you suggest?
—Michal
What you’re experiencing is a conflict between your enjoyment of a better supermarket and your cost-benefit analysis. What’s interesting is that if you bought a car, you’d spend much more money overall, but on any given week you wouldn’t feel the pain of paying to get to the supermarket. Because a car can be used for so many different purposes, no single one will feel like the reason for the car, and you’d only focus on the marginal cost of driving a few extra miles, despite the car’s overall expense and inefficiency.
Instead, you could try calling Zipcar and offering to pay them in advance for three hours of car use four times a month for a year. This way you wouldn’t undergo a cost-benefit calculus for every visit to the supermarket.
And if you can’t convince Zipcar to do this, how about putting the money you’re saving by not having a car into a “Zipcar” bank account, and linking the Zipcar use to the money you’re saving? And to make sure you use this money for the Zipcar, commit to giving whatever’s left in that account at the end of the year to a charity you hate.
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Dear Dan,
A few weeks ago you told us that in romantic encounters, the heart grows fonder when we know less about a potential mate. Does it also work for job applicants? Do we like people more when they’re hired from the outside rather than from within?
—John
Plenty of lessons from romantic love apply to the rest of our lives, and you’re correct that this is one of them. There’s some evidence showing that CEOs hired from the outside get paid more than those from the inside and that they don’t do as well. I suspect that the reason for this is the same heightened expectations that come with lack of knowledge. The question, of course, is how to combat our natural tendency to be overly optimistic about people we don’t know very well—both romantically and professionally.
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Dear Dan,
My son has been in New York since he was 18, when he started attending The Cooper Union as an art student. Now he is 35 and afraid to leave NYC to move West. He hasn’t made the moves he would need to further his career in photography. He has had many successes—but not financial ones. We’ve offered him time here on the West Coast to develop his art (and hopefully a career). He doesn’t like living in NYC and says he would love to move west, but people in New York seem to believe that it is the only place to get a job. Is there any advice or constructive approach you can offer to make his options clearer?
—Barbara
First, it’s delightful that you want your son to move closer to you rather than stay on the other coast, and I am sure that he feels the same.
I suspect your son is suffering from two decision biases. One, the status quo bias, has to do with our tendency to take our current situation as our reference point and to see any change as negative (or at least difficult) and with a high potential for regret. The second, the unchangeability bias, is the idea that when we face large decisions that seem to be immutable (getting married, having kids, moving to a distant place), the permanence of these decisions makes them seem even larger and more frightening. With these two biases combined, it’s only natural that your son is apprehensive about moving West.
Now, if you frame the move as “a trial for just a few months,” this would change your son’s status quo (he would still think of himself as a New Yorker, only temporarily trying out the West Coast), and it wouldn’t seem like a decision that’s so tough to change. Over time, he’ll most likely start feeling at home, get used to the new status quo, and not want to return to New York.
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Hi Dan,
Let’s say you’re very hungry and you plan to eat two sandwiches. One is very delicious and the other isn’t as good. Which one should you eat first?
—Pablo
One of my college friends had kids many years before anyone else in our group was even considering children, and he used to give the following advice (mostly unsolicited): “Think,” he used to say, “about how you like to eat. There are some people who like to eat reasonable food three times daily, while others would prefer to save their money and eat mediocre food most of the time but occasionally have an amazing meal.
“If you’re one of the second type, go ahead and have kids, because life with kids isn’t all that fun for the most part, but from time to time they bring incredible joy. And if you identify with the first type, you may want to rethink the kids idea.”
Now, I am not sure that this metaphor bodes well for kids, but in terms of food it certainly works. As a thought experiment, it asks whether you prefer to focus on the maximum amount of pleasure in any given experience or the average pleasure.
In the first case, you should eat the better sandwich first so that the height of your initial joy comes from the combination of your hunger and the superior quality of the sandwich. (As Cervantes wrote in “Don Quixote,” “Hunger is the best sauce in the world.”) Of course, you will sacrifice pleasure at the end of your experience. On the other hand, if you’re aiming for a consistent experience, eat the so-so sandwich first. With this method, the initial joy will be lower, but the end of the experience won’t be as much of a contrast.
Personally, I prefer to focus on the most joyful part of the experience and eat the best sandwich first, ignoring folk wisdom to “save the best for last.” Plus, this way I might be less hungry by the time I get to the so-so sandwich and may eat a bit less.
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Dear Dan,
Given all your research on decision making, do you now find yourself making better decisions?
—Oded
Maybe, possibly, sometimes. I suspect that my gut intuition hasn’t improved much with my knowledge about bad decision-making. On the other hand, when I get to carefully consider my decisions, I think I’m able to avoid some of the decision traps that I study. I should also point out that much of my research starts with observations of my own irrationalities—so, without my own mistakes, I might have to look for a different career.
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Dear Dan,
The Korean music video “Gangnam Style” by the pop singer PSY has now been viewed on YouTube over a half billion times. Why do you think this video has become so popular? Most viewers don’t understand what PSY is singing about in Korean, yet they seem to love the video anyway.
I wonder if this is partially because the words are in a foreign language that they don’t have a clue about. It’s the same in my country, Kazakhstan. Although Kazakhstanis usually do not get the content of what they are listening to, they love American pop music and (these days) Korean pop. The closest parallel I can think of is when a woman wearing a miniskirt generates more curiosity than a woman who’s fully undressed.
Recently, PSY announced that his next debut will be in English. Would this be a mistake?
-Nurdaulet
A few years ago, Mike Norton, Jeana Frost and I looked at the question of ambiguity and found exactly the mechanism you’re suggesting—that knowing less can lead to higher liking. Focusing on online dating, we found that when people read online profiles of potential partners that were more ambiguous and imprecise, they liked the profiles more. That’s because when we face new information we try to resolve ambiguity, but rather than do it accurately, we let our minds fill in the gaps in an overly optimistic way. Sadly, we eventually meet the person behind the dating profile, and then our expectations get crushed (which, by the way, happens a bit more to women).
I just tried to understand the PSY phenomenon for myself (in an admittedly unscientific way) by watching 10 YouTube clips of popular songs (in English) without paying much attention to the words. Then I read each lyric carefully, twice. What I found is that the quality of the lyrics was surprisingly low, and this cut down on my appreciation of the videos, which I’d initially enjoyed.
What this suggests is that it might be good for the musicians to get people not to pay attention to the lyrics—maybe by creating very hectic music videos or by singing in a different language, or both. So if I were PSY, I’d switch to a language that almost no one understands—maybe Yiddish.
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Dear Dan,
I recently got married, and my wife and I have been debating the topic of bank accounts. She’d like to combine them, because she wants to know how much is coming in and going out. I think separate accounts would be simpler for taxes, personal spending and budgeting. What’s your take?
-Jonathan
The fact that you’re wondering whether to follow your preferences or your wife’s tells me that you are either a slow learner or very recently married (sorry, my Jewish heritage would not let me pass up that opportunity). But to the point: I think you should have a joint account.
First, there’s no question that in reality your accounts are joint in the sense that anything one of you does has an effect on your mutual financial future. For example, if one of you starts buying expensive cars from your individual account, there’s going to be less money for both of you to spend later on vacations, medical bills and so on.
More important, by getting married you have created a social contract of the form: “I will take care of you, and you will take care of me.” Adding a layer of financial negotiations to this intricate relationship can easily backfire. Think about what would happen if there was “my money” and “your money”? Would you start splitting the bill in restaurants? What if one of you has an extra glass of wine? And what if your wife ran out of “her money”? Would you tell her that if she does the dishes and takes the garbage out for a week, you would give her some of “your money”?
The problem is that once money becomes intertwined with deep relationships, they can start looking a bit more like prostitution than like love, romance and long-term caring. Separate bank accounts do have some advantages, but having them could put unnecessary stress on your relationship—and your relationship is much more important than managing your money efficiently.
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Dear Dan,
My son travels a lot and as a consequence we don’t talk much. Can you suggest a way that I can talk to him more frequently?
-Yoram
I suspect that your son has a busy life and that his lack of calling does not reflect his love or caring for you. This said, maybe you can pick a regular day and time to talk, and this will make your conversations more likely. And I promise to call you and mom the moment I get back from South America.
Love, Dan
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Dear Dan,
I’m shopping for several plane tickets for personal trips over the next couple of months, and I keep running into the same problem: “Current me” wants to pinch pennies by choosing overnight flights, routes with several legs or inconvenient airports that would require me to drive a few hours out of my way. “Future me”—the one that actually has to pick up the rental car at 11 p.m. and drive two hours from Phoenix to Tucson the night before a friend’s wedding—sometimes resents that I wouldn’t just spend an extra $100 to make an already expensive trip more pleasant. Travel-booking websites are getting better and better at predicting what will happen to flight prices, but I don’t seem to have gotten any better at predicting my own preferences.
How can I best determine whether these savings will feel worth it to me in the future? Or, failing that, how can I console myself when I’m pulling into a Tucson motel parking lot at 1 a.m.?
—Ruth
Your framing of the problem is spot on. In your current “cold” state, you focus on the price, which is clear and vivid and easy for you to think about. When you actually take the trip, that version of you will be feeling exhaustion and need for sleep (a “hot” state), which will be very apparent to you at that point—but it is not as vivid right now.
This, by the way, is a common problem that arises every time we make decisions in one state of mind about consumption that will take place in a different state of mind.
Here is what I recommend. In order to make a better decision, tonight at 9 p.m. put in some laundry and spend the next two hours sitting on the washer and dryer (this is to simulate the fun of flight, and if you want to really go all out, supply yourself with a package of peanuts and a ginger ale). When you “land” at 11 p.m., look around for some missing socks (to simulate looking for your luggage) and then, properly conditioned to think about the actual trip, log into the travel website and see what is more important to you: saving a few bucks or getting to bed sooner.
Plus, imagine how you would look in the wedding pictures after a long night of uncomfortable traveling.
Good luck in your decision and “mazel tov” to your friend.
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Dear Dan,
I was wondering how you allocate candy during Halloween to make sure kids don’t dishonestly take more than they should. I’ve thought of handing each of the children their candy, but that way the kids can’t pick what candies they like best. Also, this method takes more time, which I don’t have, and makes things less pleasant for me.
But if I leave a bowl of candy out without any oversight, I know what will happen: They’re all going to take more than their share until the bowl is empty.
—Mary
Beyond Halloween, this is a general question about honesty. One of the things we find in experiments on honesty is that if people pledge that they will be honest, they will be—and this is the case even if the pledge is nonbinding (or what is called “cheap talk”).
Given these results, I would set up a table with a large sign reading “I promise to take only one piece of candy [or whatever amount you want them to take] so that there is enough left for all the other trick-or-treaters.” Below the sign, place a sheet of paper for your visitors to write down their names (and, given that it is Halloween, use red paint and ask them to sign in “blood”). With this promise to take only one candy, the public signature in blood and the realization that if they take more candy they will deprive their friends of having any, I suspect that honesty will improve dramatically.
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Dear Dan,
Do you have general advice for how to approach difficult decisions? I’ve been thinking about which car to get for a very, very long time, and I just can’t decide.
—John
The poet Piet Hein gave this sage advice some time ago, and I think it will work in your case:
“Whenever you’re called on to make up your mind
And you’re hampered by not having any,
the best way to solve the dilemma, you’ll find,
is simply by spinning a penny.
No—not so that chance shall decide the affair
while you’re passively standing there moping;
but the moment the penny is up in the air,
you suddenly know what you’re hoping.”
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Dear Dan,
My sweetheart often calls me by a term of endearment which, though flattering, is one that his ex-girlfriend called him during the four years they were together. The floweriness of the term does not fit his personality or mine (it’s sort of Shakespearean and we’re nerds), and every time he says it I think of her, though I appreciate his sweet intentions and hold no ill will against her. Is there an inoffensive way to bring this up and get a new “nickname” that feels more personal? I kept hoping it would go away by itself, but we’ve been together for five years and are now engaged. Help!
—Signed,
“Not Guinevere”
What your sweetheart is doing, of course, is connecting a term with positive associations for him to someone he loves—you. It would be nice if you could accept this for what it is, but judging by your letter, I don’t think that this is in the cards.
So now we have to think about how to eradicate his habit. One approach is to give him a negative punishment (a light punch on the shoulder, a sad look, etc.) every time that he uses this unfortunate term and to use a positive reward (a quick neck rub, a compliment) every time that he uses other terms of endearment. This approach would probably work, but I would recommend even more a variant of it that the psychologist B.F. Skinner called random schedules of reinforcement.
The basic idea is to alternate unexpectedly among ignoring this term of endearment, giving him a slight positive feedback for using it and responding from time to time with a dramatic negative punishment (a strong punch on the shoulder, hysterical crying, etc.).
Not knowing what to expect, coupled with the potential for a large negative response, would substantially increase his fear and would make even thinking about this nickname a negative experience for him. Good luck, and keep me posted on your progress.
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Dear Dan,
How can I control myself when I feel the irresistible need to break my own rules about how to invest in the stock market?
—Ganapathy
You are asking, I suspect, about what we call the “hot-cold-empathy gap,” where we say to ourselves: “The level of risk that I want to take is bounded on one side by gains of up to 15% and on the other by losses up to 10%.” But then we lose 5% of our money, we panic and sell everything. When we look at such cases, we usually think that the colder voice in our head (the one that set up the initial risk level and portfolio choice) is the correct one and the voice that panics while reacting to short-term market fluctuations is the one causing us to stray.
From this perspective, you can think about two types of solutions: The first is to get the “cold” side of yourself to set up your investment in such a way that it will be hard for your emotional self to undo it in the heat of the moment. For example, you can ask your financial adviser to prevent you from making any changes unless you have slept on them for 72 hours. Or you can set up your investments so that you and your significant other will have to sign for any change. Alternatively, you can try to not even awake your emotional self, perhaps by not looking at your portfolio very often or by asking your significant other (or your financial adviser) to alert you only if your portfolio has lost more than the amount that you indicated you are willing to lose.
Whatever you do, I think it’s clear that the freedom to do whatever we want and change our minds at any point is the shortest path to bad decisions. While limits on our freedom go against our ideology, they are sometimes the best way to guarantee that we will stay on the long-term path we intend.
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Dear Dan,
In your most recent book, you argue that most people are capable of dishonesty. Are you worried that people will use this as a justification for dishonest behavior?
—Joe
A colleague told me that a student at her university was doing just that. During a trial dealing with an honor-code violation, the student in question brought my book to the honor court and argued that “everyone cheats a bit,” so he should not be judged harshly.
The honor court was more annoyed than impressed with his argument, and they pointed out to him that if everyone cheats, maybe this suggests that extra harsh and public punishments should be used to make it clear that such behavior is outside the norms of the acceptable and will not be tolerated.
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Dear Dan,
I am an avid football fan. When the team I am supporting is leading by, say, seven points, it doesn’t seem like a lot (we are leading by JUST one touchdown). On the other hand, when we are trailing by seven points, it seems like a lot (we are trailing by ONE touchdown). The same thing happens with runs in baseball and points in basketball. As a result, I’m always nervous while watching close games! Why do I feel this way? Is it just me?
—Jaydeep
I must admit that I don’t follow sports, but as luck would have it, I recently had a chat with Mark Cuban, the owner of the Dallas Mavericks. We talked about various links between behavioral science and basketball, including the idea of loss aversion. Loss aversion means that our emotional reaction to a loss is about twice as intense as our joy at a comparable gain: Finding $100 feels pretty good, whereas losing $100 is absolutely miserable.
When your team is ahead, you think that the game is yours, so you largely focus on dreading that it might be taken away from you. On the other hand, when you are behind, all you can do is look forward to a positive change in the lead.
As this suggests, we might benefit in other areas of life, beyond sports, by adopting the perspective of being behind and looking for the upside.
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Dear Dan,
Several years ago I gave my 90-year-old mother $5,000 to pay off the bank loan for her 2007 Honda Civic. She recently decided she didn’t want to drive anymore and would sell the car, for which she should receive $6,000 to $8,000. She had originally planned to give the car to my nephew (her grandson), but since he can’t afford the upkeep, she was going to sell the car and give him the proceeds. My finances have improved significantly since the time I gave her the $5,000, but she also offered to give me back $5,000 from the sale, which would leave my nephew with very little money. What should I do?
—Anastasia
When we face such questions, we usually engage in what is called a cross-personal utility comparison. We ask ourselves how much we would benefit from this amount of money and compare this to how much the other person (your nephew, in this case) would benefit. When we carry out this comparison we naturally have a somewhat egocentric view of the world, which means that we usually over-weigh our own benefits and under-weigh the benefits of the other person.
However, recent research by Elizabeth Dunn and Mike Norton (their forthcoming book is called “Happy Money: The Science of Smarter Spending”) shows that giving money away has tremendous benefits for the giver. In their studies, whether people buy a cup of coffee for a friend or give up their yearly bonus to help a nonprofit, the givers experience happiness beyond their expectations, and it remains high for longer than they anticipate.
In your case, the giving would be particularly powerful because both you and your mother are involved. You would feel happiness because you facilitated the gift, your mother would feel happy because she is helping her grandson, and you would feel further happiness for making your mother feel good. With all of this good feeling around, is there any doubt that you should help your nephew?
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Dear Dan,
I just paid for yoga classes for the next six months, but the studio mistakenly credited me for a year. They have made many past billing errors in their favor. Should I correct the mistake or just see it as the universe making things more even?
—Random fan
Of course, it is the world restoring karma—but why did it take so long?
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Dear Dan,
My husband and I are childless. We’ve lived in the same house in the same town for 17 years. Each day he comes home and says, “What do you want to do tonight?” I think we’ve tried every restaurant in a five-mile radius. Neither of us enjoys shopping or watching movies at a theater. His hobby is aviation, and I don’t fly. I work from home and would love to go somewhere in the evening occasionally, but we usually end up watching TV. And we don’t even like TV! Can you shed some light on this problem?
—Charleen
The basic challenge you are facing is what economists would call a problem of coordination, where both you and your husband have to agree on a course of action. This is no easy thing to do when your preferences don’t align. On top of that, you have the suboptimal default option of watching TV—something that neither of you enjoys but is a simple resolution to your coordination problem.
One approach is to switch from a simultaneous coordination issue to a sequential one—that is, agree up front on a plan that will make only one of you happy on a given night but, ultimately, will let both of you do more things you enjoy. On a set of cards, write down activities that each of you wants to do, mix the cards and draw one card every evening to pick that night’s activity. This approach should lead to higher enjoyment overall. After all, it’s better to have some enjoyment on some nights of the week than to have no joy on every night.
Here’s one final suggestion: Add a few wild cards into the mix (singing, poetry, pottery, volunteering, square dancing, etc.), activities that you aren’t sure you will like (or even things you suspect you will dislike), and you both might just find some new activities that you enjoy.
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Dear Dan,
I recently stumbled upon a website offering customers help with creating alibis—and even manufacturing corroborating “evidence” for their absences (for example, to reassure your wife when you were really with your mistress). Other sites offer married people help finding paramours for extramarital affairs. Do you think these sites are increasing dishonesty?
—Joe
The basic answer to your question: Yes. I think that these websites do increase dishonesty.
Many of these websites are constructed to look like any basic service provider. In one case, there are pictures of smiling people with headsets, waiting to fill your order, and tabs for services ranging from producing and sending fake airline tickets, to impersonating hotel reception. The testimonials are positive and very general. And the slogan—”Empowering Real People in a Real World!”—is downright uplifting, until you realize that by “empowering” people, they mean lying on their behalf.
I suspect that all these trappings help people to rationalize their actions as socially acceptable. And with all the testimonials from so many regular people, why not you?
I also think that the “real world” rhetoric may further lull people’s objections; the idea is that this is how things work in the real world, not a fairy-tale land of perfect honesty.
For my part, I’m left feeling a little worried about what kinds of ads might pop up in my browser after looking at this page…
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Dear Dan,
Is there any correlation between political party affiliation and whether someone is more or less honest?
—Karen
Of course. The politicians you and I support are much more honest. You can’t even compare them to the crooks on the other side of the aisle. How can they even say those things with a straight face?
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Dear Dan,
In your answer last week about splitting checks at restaurants, you noted that there is a “diminishing sensitivity as the amount of money paid increases.” I’ve noticed this in my own spending. I’ll go out of my way to save a buck and then spend an ungodly sum on some purse. Why is that? And how can I control it?
—Lembry
Diminishing sensitivity is a very basic way that our minds work across many domains of life. For example, imagine that you light up one candle in the middle of the night. This small amount of light will dramatically change your ability to see your surroundings. But what if you already have 10 lit candles and you add one more? Now it would not have much of an effect. The basic idea of diminished sensitivity is that our minds tend to register relative increase; we take any additional amount of stuff as if it were a percentage gain, not an absolute one.
Now, when it comes to money, we should think about it in absolute terms ($10 is $10 regardless of whether we are saving it from a dinner bill or from the price of a new car), but we don’t. We think about money in terms of percentages, too.
What can we do about it? It’s not easy, but we should try to fight this natural tendency. One method that I use from time to time is to take the amount of money that I am thinking about spending and ask myself what else I could get with it. For example, since I like going to the movies (and let’s say that the price of two tickets and popcorn is $25), I ask myself whether a given $25 of spending on a prospective purchase is worth more or less than the pleasure of going to the movies.
When framed this way, it doesn’t matter if the savings come from a dinner bill or a new computer—and it helps me to ask the question “What would I enjoy more?” in a more concrete way. So, the next time you are shopping for a new purse, try to measure its price in terms of another use for that money that you might value more.
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Dear Dan,
I have been on vacation for the last few days in New York City, and while reading your most recent book, on dishonesty, I have been wondering whether people behave more or less honestly on vacation.
—Julie
This is an interesting question, and (sadly) I don’t have any data to share with you on this topic. But here are a few ideas to consider:
Why might people on vacation be more honest? While on vacation people seem to be more relaxed with spending money, which suggests that the motivation to be dishonest for financial gain might be lower. On top of that, people on vacation are more often in a good mood, which they might not want to spoil by behaving badly.
Why might people on vacation be less honest? On vacation, the actions we take are in a new context. As they say, “What happens in Vegas stays in Vegas.” Also, the rules on vacation might seem less clear: What are the regulations for parking in San Francisco? How much should you tip in Portugal? Is it OK to take the towels from this hotel? This sort of wishful blindness can make it easier for us to misbehave while still thinking of ourselves as generally wonderful, honest people.
On balance, then, are vacationers more or less honest? I suspect that they are less honest—but I would love to be proven wrong.
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Dear Dan,
What is it about Internet communication—Facebook, Twitter, email—that seems to make people descend to the lowest common denominator?
—James
It’s easy to blame the Internet, but I think we see such behavior mostly because people generally gravitate toward trafficking in trivialities. Consider your own daily interactions. How much is witty repartee—and how much is the verbal equivalent of cat pictures? The Internet just makes it easier to see how boring our ordinary interactions are.
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Dear Dan,
What should I do about parking? I have trouble deciding whether I should go for a paid parking lot straight away or drive around in the hope of finding free parking—but at the risk of wasting time.
—Cheri
This is a question about the value of your time. You need to figure out how much money an hour of fun out of the house is worth to you and compare that cost with the time it takes to find a parking spot. For example, if an hour out of the house is worth $25 to you, and searching for parking takes 30 minutes on average, then any amount less than $12.50 that the parking lot charges you is worth it. As the number of people in your car rises, the value of parking quickly also rises because the waste of time and reduction of value accumulate across all the people in your group.
Another computational approach is to compare the misery you feel from paying for parking with the misery you feel while seeking a spot. If the misery from payment isn’t as great as the unhappiness from your wasted time, you should go for the parking lot. But if you do this, you shouldn’t ignore the potential misery you would feel if you paid for parking and then found a free spot just outside your destination. Personally, the thought of time wasted is so unbearable to me that I usually opt for paid parking.
Yet another approach is to put all the money that you intend to spend on going out in an envelope in advance. As you’re on the way to the restaurant or movie theater, decide whether that money would be better spent on parking or other goods. Is it worth it to forgo that extra-large popcorn if paying for parking will get you to the theater on time? That makes the comparison clearer between what you get (quick parking and more time out) and what you give up.
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Dear Dan,
When going to dinner with friends, what is the best way to split the bill?
—William
There are basically three ways to split the bill. The first is for everyone to pay for what they’ve had, which in my experience ends the meal on a particularly low point. Every person has to become an accountant. Given the importance of endings in how we frame our memories of experiences, this is a particularly bad approach. Rather than remembering how delicious the crème brûlée was, you may be more likely to remember that Suzie ate most of it even though you paid for half.
The second approach is to share the bill equally, which works well when people eat (more or less) the same amount.
The third approach, my favorite, is to have one person pay for everyone and to alternate the designated payer with each meal. If you go out to eat with a group relatively regularly, it winds up being a much better solution. Why? (A) Getting a free meal is a special feeling. (B) The person paying for everyone does not suffer as much as his or her friends would if they paid individually. And (C) the person buying may even benefit from the joy of giving.
Let’s take the example of two friends, Jaden and Luca, who are going out to their favorite Middle Eastern restaurant. If they were to divide the cost of the meal evenly, each would feel, say, 10 units of misery. But if Jaden pays, Luca would have zero units of misery and the joy of a free meal. Because of diminishing sensitivity as the amount of money paid increases, Jaden would suffer fewer than 20 units of misery—maybe 15 units. On top of that, he might even get a boost in happiness from getting to buy his dear friend a meal.
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Dear Dan,
I play in a weekly nine-hole golf league. There’s one individual who constantly talks on his cellphone, moves around while others are putting and mostly ignores the courtesies of golf. He’s been asked to stop this behavior but continues with a bully attitude. How do I handle it?
—Wally K.
Though you might be tempted to rip the phone from his hands, throw it on the ground and bash it with your 9-iron, I would suggest another solution.
You could implement a new rule, whereby everyone else playing with you earns a mulligan (a “do over” shot) each time the bully talks on the phone. Getting constant negative feedback (in addition to giving everyone a performance boost) would probably whip him into shape. Just be sure to take the mulligans consistently, every time he’s on the phone, so that his behavior is reliably punished and the message sticks.
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Dear Dan,
What is the best way to get myself, and other citizens, to be more motivated to vote in elections for public office? I realize this is a loaded question, but there must be some behavioral component behind the motivation and initiative required to vote.
—Randy
The best way to get people to vote is to get them to the voting place for another reason (free ice cream, for example) and then to make the extra effort needed to vote as minimal as possible. This is not, of course, an answer to your question, because it tells you how to get people to vote, not how to get them motivated to vote.
For people to be motivated to vote, they would need to care about the outcome of the election and the people whom they are voting for—and that is a very big challenge, indeed.
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Dear Dan,
Should I quit my job? I’m unhappy with it, but I’ve been with the company for eight years, and there are several practical/financial reasons to stay: I make a good salary, including stock options and grants; I get several weeks of vacation each year; and I have a pension. There is a lot of uncertainty with starting over in a new job, and there is no telling whether I would be any happier. Should I stick with what I know and look for fulfillment outside of work?
—KP
You are asking the right question. Will you be happier in a different job? The problem is that it is hard to predict whether a few weeks into a new job you will be just as unhappy as you are now. And there is no good way to predict this. So what can you do?
I would suggest that you take your next vacation (let’s say three weeks) and use the time to volunteer at the kind of a company to which you would consider switching. See how it feels to be there for a few weeks. Now, of course, a few weeks as a volunteer would not give you the full sense of working at that company for a long time, but it would give you some sense of the place, which is much better than going in blind. If you don’t think that this is a good way to spend your three weeks of vacation, it probably means that you are not really that unhappy and that you should stay where you are.
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Dear Dan,
I’m about to graduate from college next year, and I really want to go teach English in Spain afterward. There’s still a market for this, despite the economy over there, but I’m wondering if I should do it or not. It would give me an unforgettable experience—one I don’t think I’ll be able to have when I’m settled at a job with a husband and kids. But, at the same time, it could delay the start of my career, which I want to have on track before I settle down. Is the experience worth delaying the start of my “real life”?
—Gabriella
When I graduated, I asked Ziv Carmon—one of my academic advisers—where to take my first academic job. His answer was that I should go to the place where, five years down the line, I would be most likely to emerge as a very different person. He explained that life is about learning and improving, and that I should take advantage of my relative flexibility (no wife and kids at the time) and invest the next few years in my own growth. I took his advice seriously, took my first job in a place that was not the best fit with what I knew already, and over the next few years I learned a lot of new things. Thanks to this experience, I think that I became a better researcher and maybe even a better person.
Since then, I have been a fan of thinking of the early years of life as an opportunity to collect lessons and experiences, so that we will be better people down the line. The reality is that we don’t know what life lessons and education will be useful for us in the future, but there is a good chance that some of them will become highly useful. Maybe you can think of this as gambling with your own time now for a future benefit, but since the seeds you sow now can yield fruit over many, many years, I would go for it.
