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Ask Ariely: On the Lottery, Corporate Charity, and Maternalism

Oct 26

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

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Dear Dan,

A strange thing happened to me a few days ago. One of my employees came into my office holding a few lottery tickets and asked, “You in? It’s 45 bucks.” I never play the lottery, but I felt an inexplicable urge to say yes–and I did. Was I being grossly irrational?

—Itay 

You were indeed irrational, but in a very common way. Usually, when you are considering whether or not to buy a lottery ticket, you take into account how your life would change if you won and contrast this with the cost of the ticket and the slim chance of winning. After making this quick computation, you decide not to buy a ticket.

But when another person asks you to “go half” with them on a tickets that they’ve already purchased, another factor comes into play: regret. Now you can’t help thinking how you would feel if that other person won. You quickly conclude that it would make you feel terrible and you also realize that you would keep on thinking about this forgone fortune for a very long time.

I think that too many people are currently losing too much money on various lotteries (often state sponsored), and I wouldn’t want more people to keep losing money this way. But if I were looking for a way to get more people to gamble, I would certainly try to play on our capacity for regret.

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Dear Dan,

On a recent flight, the attendants declared it was “Breast Cancer Awareness” month and asked for donations from the passengers for this worthwhile cause. I give to a multitude of breast-cancer organizations, but this approach offended me. Maybe if the airline had offered to match my contribution dollar for dollar it would have made me feel we were partnering in this effort, but the way it was handled just annoyed me. Is it just me or were they doing this the wrong way and actually hurting the cause they are trying to help?

—Rob 

I suspect that many companies trying this approach to corporate responsibility don’t get much of a boost from it in terms of internal morale or customer loyalty. It turns out that companies get the most credit for donating to charity in two cases: One is when they give first and then tell the customers, “Look, we’ve already given on your behalf, now you can contribute as well.” The second is when they empower their customers to give themselves (“here is a $5 voucher for you to give to any organization you value”). The approach you describe, where the company simply says, “We have a charity that we like and want you to give to it,” is ineffective in every way.

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Dear Dan,

It seems to me that any reading of social science research implies that we are all less capable in making our own decisions and that as a consequence we need help. Yet, it seems that Americans are emotionally against any hint of paternalism. Any idea how we can overcome this barrier?

—Tom

I agree with your general position. I think that part of the problem is that, while we see irrationalities and bad decision-making in those around us, we don’t see these mistakes as readily in our own behavior. Because of this partial blindness, we are not as interested in limiting our freedom to make our own stupid decisions. I’m not sure what we can do to fix this part of the problem. But perhaps we can think about how to market paternalism in a better way. As a first step, I would change the term and call it maternalism. After all, who could object to listening to a mother figure?

See the original article in the Wall Street Journal here.

Introducing Pocket Ariely – the greatest app ever created!

Oct 22

What can you do with Pocket Ariely?

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With Pocket Ariely in your pocket, you can take me with you wherever you go. You’ll be happier (since you’ll never make another bad decision), healthier (since you’ll never make another bad decision), wealthier (since you’ll never make another bad decision) and wiser (yes, you guessed it: since you’ll never make another bad decision). We almost guarantee it!

Why spend $5 on an app? Think about how much you pay for one latte or one beer. Or how much money you waste on things you don’t need. Just think: you could improve your life forever by saving your lunch money and bringing a salad to work just once. Your waistline may thank you, too! But most importantly, think about how the purchase of this app will help the blossoming field of behavioral economics. All profits from this app will be put toward the research being conducted at my lab, the Center for Advanced Hindsight at Duke University.

Thank you in advance for helping our research, and I hope you enjoy what Pocket Ariely has to offer.

Irrationally Yours,

Dan

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Ask Ariely: On Tesla, To-Do Lists, and Knowing the News

Oct 14

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

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Dear Dan,

I was thinking about buying a Tesla electric car, and I was very excited about it, but given the recent news, I am not sure this is a wise decision. Is it too risky?

—Karl

Indeed, earlier this month a Tesla Model S drove over a large metal object, and the object punched a hole through the plate protecting the battery, and the battery pack caught on fire. But this is only one part of the story. In August, the model S received five stars in all test categories—an unusually high rating—by the National Highway Traffic Safety Administration. In the two days after we all learned about the crash test ratings, the stock of the company went up by 2%.

We now need to add one more data point to this body of evidence: The fire happened on Oct. 1. The share price fell by 10% over the next two days. By the way, this means that the effect of one small piece of bad news can be four times more effective than good news based on much more data. (A rare downgrade of the stock by the R.W. Baird brokerage from “outperform” to “neutral” probably also contributed to the drop.)

Elon Musk, Tesla’s CEO, pointed out in a statement Oct. 4 that no one was hurt, that the car warned the driver to pull over, and that gas cars are in no way safer. After the statement, the stock price increased by 3%, making the overall losses 6.2% from the day before the accident.

From a psychological perspective, this overreaction to one very salient (and very sad) accident is nothing new. It is a consistent way that we react to salient news, and it is perfectly irrational.

And after all of this, my suggestion to you? If you had decided to buy a Tesla before this accident, get one now—because the event didn’t add much to the information you used to make your original decision. In fact, given that other people might have an irrational fear of buying a Tesla, maybe the prices will go down a bit.

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Dear Dan,

Why do people love to write to-do lists?

—Joe 

I suspect there are rational and irrational reasons for the very large amount of list-making activity we see around us. On the rational side, lists help us with faulty memory and allow us to share tasks with other people simply and efficiently. On the irrational side, making lists and checking items off these lists give us the false sense that we are actually making progress. The term for this by the way is “structured procrastination.” It’s an attempt to capture the momentary feeling that we are progressing—whereas in fact when we look back at the end of the day on what we achieved, we realize that we did not get much done. I also suspect that all the apps that help us make lists and then make it fun for us to check things off are reducing our collective productivity, by replacing real work and focus with structured productivity.

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Dear Dan,

I am always upset by bad news online when I turn on my computer. But negative news is pervasive, so what can I do to make myself feel better and get down to work immediately?

—Liz

One approach is to start each day with the most depressing set of news around for about five minutes and then move to the regular news. The idea here is that contrast between the highly depressing and the regular will make you feel good in comparison.

See the original article in the Wall Street Journal here.

Ask Ariely: On Wasted Time, Framing Failure, and Matrimonial Gambling

Sep 28

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

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Dear Dan,

Often when I meet with a group of my closest friends, the discussion goes something like this: “Where do you want to go?” “Not sure.” “Where do you want to go?” “Not sure.” Etc. These discussions are frustrating and waste time. Any advice on how to move them forward and get to a decision faster?

—Matthew 

When someone asks “What do you want to do tonight?” what they often are saying implicitly is: “What is the most exciting thing we can do tonight, given all the options and all the people involved?”

The problem is that figuring out the best solution is very difficult. First, we need to bring to mind all the alternatives, next our preferences and the preferences of the people in the group. Then we have to find the one activity that will maximize this set of constraints and preferences.

The basic problem here is that, in your search for the optimal activity, you are not taking the cost of time into account, so you waste your precious time asking “What do you want to do?”—which is probably the worst way to spend your time.

To overcome this problem, I would set up a rule that limits the amount of time that you are allowed to spend searching for a solution, and I would set up a default in case you fail to come up with a better option. For example, take a common good activity (going to drink at X, playing basketball at Y) and announce to your friends that, unless someone else comes up with a better alternative, in 10 minutes you are all heading out to X (or Y).

I would also set up a timer on your phone to make it clear that you mean business and to make sure that the time limit is kept. Once the buzzer sounds, just start heading out to X (or Y), asking who wants to come with you and telling everyone else that you will meet them there. After doing this a few times, your friends will get used to it and perhaps bring an end to this wasteful habit.

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Dear Dan,

I’d like to understand something I see in my own life and in billion-dollar companies: the switch from aiming to succeed to aiming not to fail. You see this in companies such as Microsoft, but even the National Aeronautics and Space Administration went from the ambitious 1960s-’80s era to its current conservative program. What can we do to overcome this problem?

—Alex

Assuming this is indeed a generalized pattern (and it would be interesting to collect data on the question), it might be a simple outcome of the endowment effect: basically, once we own something, we get used to it and are very reluctant to see it go away. When you are just starting out, you have nothing, so you look at potential gains and losses to some degree on an equal footing. But once you experience some success, you start thinking more carefully about what you have, and you don’t want to give it up, so you become much more conservative. In the process, you give up the things that made you successful from the get-go. Nor are companies alone in this: I suspect that the tendency to switch to a do-nothing defensive posture is just as common in the behavior of our public officials and governments.

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Dear Dan,

Someone once said to me that marriage is like betting someone half of everything you own that you’d love him or her forever. Do you agree?

—Shane

From the perspective of an outside observer, there are some things in life that can be described as a bet or a gamble—while for the people directly involved, looking at it that way will be a very bad idea. Marriage is one of these cases. It might be fun and interesting to think about other peoples’ marriages in such terms, but don’t be tempted to think about your own relationship this way. And certainly don’t mention these odds to your significant other.

See the original article in the Wall Street Journal here.

Ask Ariely: On Economic Drinking Games, Regulating Relationships, and Wedding Ring Woes

Sep 14

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

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Dear Dan,

I’m turning 30 in December, and I want to have a “nontraditional” celebration. I’m thinking about re-creating some economics experiments at my party.

Here’s the plan: Lots of alcohol and yummy appetizers at a fancy place here in Dallas. Computers scattered across the room with small apps, each running a different experiment. After all, how many parties do you go to where you get to have fun, have too much to drink and learn something about economics? Any advice?

—Virginia

I really love your idea—and here is a suggestion for an experiment relating to dishonesty. Give each of your guests a quarter and ask them to predict whether it will land heads or tails, but they should keep that prediction to themselves. Also tell them that a correct forecast gets them a drink, while a wrong one gets them nothing.

Then ask each guest to toss the coin and tell you if their guess was right. If more than half of your guests “predicted correctly,” you’ll know that as a group they are less than honest. For each 1% of “correct predictions” above 50% you can tell that 2% more of the guests are dishonest. (If you get 70% you will know that 40% are dishonest.) Also, observe if the amount of dishonesty increases with more drinking. Mazel tov, and let me know how it turns out!

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Dear Dan,

My daughter started dating a lazy, dumb guy. How can we tell her gently that he is wrong for her without preaching to her, causing her to ignore us or go against our advice?

—Concerned Mother

It seems that you are experiencing the same reaction most mothers around the world have toward their daughters’ boyfriends. Let’s assume, for the sake of argument, that you are, in fact, correct, and that your daughter’s new boyfriend really is dumb, lazy and up to no good. Nevertheless, don’t tell your daughter your opinion and instead ask her questions. Naturally, people tend not to ask themselves certain questions. But if someone else asks them, these questions get planted in their minds, and it is hard to keep from thinking about them. So thoughtful questions can make people think differently about what they want and how they view the world around them.

For example, you can ask, “How do you and your boyfriend get along? Do you ever fight? What do you love about him? What do you like less about him?” I admit it’s a bit manipulative, but I hope it will get her to think about her relationship in more depth. And maybe she will reach the same conclusions you have.

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Dear Dan,

My wife-to-be really wants to get a two-carat ring, but I’d rather get a smaller ring and spend the rest of the money for future expenses—house, wedding, etc.

Her view is that most of her friends have big rings, plus she’s been dreaming about this for a long time. What do you think about this irrational behavior? Any advice?

—Jay

First, there is a difference between irrational and difficult to understand, and for sure it is irrational to call your future wife irrational in public. If you get her a ring, realize that comparison to her friends is part of the game you are buying into and try to get her a ring that will make her happy with this comparison.

At the same time, what if you could switch to a different jewelry category—maybe a wedding necklace or bracelet? In this case comparison will not be as clear, and you could probably get away with spending much less.

Finally, has it occurred to you that she may want this so much because you are so against it?

See the original article in the Wall Street Journal here.

Ask Ariely: On Audiobooks, Idle Waiting, and Public Transportation

Aug 31

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

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Dear Dan,

From time to time, people around me discuss a book they have read recently. While I know the book well, and I want to participate in the conversation, I hesitate because I listened to the book on tape. My first question is why am I embarrassed to say that I listened to the book? My second question is what can I do about it?

—Paula

We learn how to listen and comprehend at a young age and therefore we don’t really remember how difficult it was for us. On the other hand, we learn how to read and write at a later age and we all remember the difficulty of the early struggles with reading and writing. Because of that, people associate greater difficulty with reading than listening. As a consequence, we take greater pride in reading than listening.

My first suggestion is that you realize that it isn’t necessarily the case that reading is more difficult. It’s just that we forget how difficult it is to learn to comprehend. When I got your question I purchased an audio book and I listened to it on a long flight–and for what it is worth, I find it is harder to focus when listening to a book than when reading one.

A second suggestion is that you to find a different word to describe your experience. For example, for books you loved, maybe you can say: “I inhaled that book.” For more difficult books, maybe you can say: “I struggled with it,” or some other phrase.

If these don’t work, perhaps it is time to change the meaning of the word “read.” Maybe we should acknowledge that today there are many ways to get information — audiobooks being one of them. This might seem dishonest, but you might be able to start a revolution, and help lots of people who listen to audiobooks feel more comfortable with what they’re doing. Good luck!

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Dear Dan,

I noticed that when I drive around the block looking for parking I spend a lot of time too far away from my destination (I live in Chicago, and hate the cold), so instead, I just wait until somebody leaves and take the spot. It proved to be more efficient, but my friends can’t seem to stand it, and I can’t do it when I’m not alone in the car. My question is why my friends find in intolerable waiting for someone to leave.

—Danny 

The phenomenon you’re encountering is aversion to idleness. There was a story a while ago about an airline that tried to optimize which carousel that the luggage would come out of. There was an engineer with this airline that realized that some carousels were close to some gates, and others were close to other gates. He wrote an algorithm to try to figure out which carousels to send the luggage to so that it would be closest to where the plane was landing. Before this algorithm was created, travelers would get out of the plane, walk for a while and get to the carousel. Sometimes it was such a long walk that their luggage was waiting for them already, and they would pick it up and go home. In the new system, the carousel was much closer and people would walk a little bit, find the carousel and wait for their luggage. People hated this new system because they were standing in one place to wait for their luggage. This idleness was so unpleasant that people complained and the airline rejected this algorithm. My understanding is that they have not gone the whole way in the reverse and tried to get the luggage in the farthest carousel possible, but maybe it is something they are still working on.

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Dear Dan,

Many people justify evading paying for public transportation by rationalizing that “public transportation services aren’t value for money,” that “it’s a victimless crime,” and that “as a tax paying passengers, we’ve already paid for my journey once.” Do you have any advice on counteracting these rationalizations?

—Julian

Make these people buy some shares of the public transportation company.

See the original article in the Wall Street Journal here.

Have a minute?

Aug 27

I just posted a new study that should take you about 2 minutes to complete. If you would like to take the survey (and I would appreciate it very much), please look to the right sidebar under “Participate” and click on the “Take a quick anonymous survey” link. You can also access it right here.

 

Irrationally Yours,

Dan

Murder’s Morality

Aug 24

There are plenty of things that might upset Johnny “The Basin Street Butcher” Martorano. Perhaps having murdered 20 people in the course of his career as a mob hitman doesn’t sit so well decades later. Well, no, this is not it,  Martorano recently recounted his murders as part of Whitey Bulger’s trial with a perfectly flat affect, much to the displeasure of his victims’ families. It seems guilt doesn’t keep him up at night.

Then maybe it’s the 12 years he spent in prison after confessing his crimes to the FBI? Not likely, given Martorano now lives in a nice country club neighborhood, after serving barely half a year for each murder. He literally got away with murder(s).
What about revealing himself to his unsuspecting neighbors by testifying in the sensational trial? Doing so could arguably disrupt the life he’s built for himself since his release from prison. According to the man himself, that’s not at the root of his self-professed suffering.

So what wounded this evidently hard-hearted man? A betrayal of friendship and trust!  During the trial, Martorano said of Bulger and fellow gangster, Stephen Flemmi (in perhaps the only instance the expression has been used in earnest) “They were my partners in crime, they were my best friends, they were my children’s godfathers.” Of all the things that could cause The Basin Street Butcher pain, it was the snitching of his fellow murderers.

This is the kind of “irrational ethics” I’ve found through many interviews with convicted criminals. Usually the crimes for which they’re incarcerated aren’t the cause of their moral outrage, it’s that someone from their inside group inviolated a moral rule that was part of their moral code, in this case, cooperating with the “enemy.” This is the power of social norms in its most extreme form. Even though the usual societal rules are disregarded, another sort of code emerges and becomes the basis for judging one’s actions. So it’s “okay” to kill a person outside your in-group for stealing or talking to the cops, but it’s crossing the ultimate line to do so within the group. All that said, you really have to wonder what their get-togethers were like.

Ask Ariely: On Cross-cultural Obesity, Taking Time for Exercise, and Smoking Surcharges

Aug 17

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

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Dear Dan,

I just got back from a trip to Europe, and although I knew that Europeans were much less obese than Americans, it was still shocking to see the difference. It is also not true that they don’t have fast food joints. Can you shed some light on these national differences? 

—Alvin

Some think that the key factor is the European diet: more homemade food and less prepackaged food, smaller portion sizes, less sugar and corn syrup, etc. I have no doubt that there is some truth to this, but I would propose that our differences in weight also have to do with the fact that Europeans use kilograms while Americans use pounds.

Here is my proposed logic, using me as an example: I weigh 170 pounds, which is also 77 kilograms (well, the truth is that right now I might be closer to 174 pounds, but my real weight is 170). Depending on the time of day and what we eat, our weight fluctuates by a pound or more, as most of us know. This kind of fluctuation lets us convince ourselves that when the scale shows 172, our real weight is still 170, even if it has not shown 170 for a while.

If one day our weight is 174, would we say to ourselves “I am gaining weight, and I need to change what I eat” or would we be able to justify this as part of the random fluctuation around our supposed real weight of 170? By contrast, if we were using the kilogram system, the fluctuations would be much smaller, and when we learned that we were one kilogram heavier, we might act on this change more quickly.

My suggestion: Switch to kilograms (and while we’re at it, maybe we can move to the metric system more generally).

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Dear Dan,

There are people in my office who have a hard time focusing for even 20 minutes on their jobs. Nevertheless, they seem perfectly capable of exercising for long stretches, and they are quite persistent in that. Can you explain this contradiction?

—Michael

This might actually not be a contradiction but rather, as I learned recently, two faces of the same mechanism. A few weeks ago, I flew to California for some meetings. I left home at 4:30 a.m. and got to San Francisco at 10 a.m. I had a few meetings, and by 5 p.m. was exhausted. I had a lot of work-related tasks and was determined to get at least some of them done, but I felt devoid of energy. So I went for a run.

Ordinarily, I go for a run maybe once every 10 years. But this run was fantastic! I ran a bit, walked a bit, listened to music along the way. It was challenging, and I ran out of breath, but in no way was it even close to the mental exhaustion of doing the things I was supposed to work on.

Here is my new understanding: I think that people who either don’t enjoy what they’re doing for work or don’t have the mental stamina to focus on it can take long breaks for exercise. On top of that if your co-workers took a two-hour book or movie break, they would be seen as selfish slackers, wasting time. But because society tells us that exercising is good for our health, it is a perfectly good excuse to escape work. Now that I have discovered this way to take time for myself and not feel guilty about it, I am going to do more of it.

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Dear Dan,

The health-care benefits provided by my employer have just been updated to include a hefty monthly surcharge to smokers. I put little effort into quitting smoking, although I know this is the right thing to do. This smoking tax might motivate me to quit, but at the same time it infuriates me that my employer has the power to charge me for smoking. What is your opinion?

—Anonymous 

The smoking rate in the U.S. is about 20%, and companies that add such smoking surcharges usually find that the smoking rate drops overnight to less than 10%. Or, more precisely, they find that the smoking surcharge dramatically reduces the number of people who say that they smoke.

See the original article in the Wall Street Journal here.

Monday is good for something after all: surgery.

Aug 11
Perhaps you’ve heard the advice to avoid hospitals in July on account of the legions of just-graduated doctors who will kill you with their inexperience. Thus far, the claim, though plausible, remains unsubstantiated. However, a recent study showing a variation in mortality after surgery depending on the day of the week it’s performed seems to have more to it.

According to a report that came out in the British Medical Journal, the risk of death after undergoing non-emergency surgery is lowest on Monday (1%), and goes up every day of the week thereafter. People who have surgery on Friday are 44% more likely to die than those who have it on Monday (the rate increases from 1% to 1.44%). The news is still worse for the small number of people who have surgery on the weekends, when the risk of death from complications rises 82% compared to Monday (the rate increases to 1.82%).

Researchers think one explanation for this is the relatively high-risk 48-hour period following surgery, when people are at the highest risk for complications like post-operative bleeding and infection. People who have surgery later in the week may not have as ready access to care, as fewer doctors and nurses work on the weekends than during the week.

It’s important to note that the risk is still low (it reaches around 1.82% on for people who have weekend surgeries, an increase of 0.82%). That said, obviously there should not be such a notable variation in mortality based on day of the week surgery is scheduled. One solution might be that going forward, high-risk or major surgeries should only be performed in the beginning of the week, saving lower-risk procedures for later in the week. Combined with increased efforts to educate patients on recognizing signs that they need to seek medical attention, perhaps this increased risk can be brought back in line.

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