The Blog

The Trust Factory

Hey everyone, I hope this blog post finds you well. Recently, I wrote a short paper about trust….

The paper, Trust Factory, discusses elements of trust; specifically regarding the way organizations can interact with individuals to build trust. If you’re interested in reading the paper, you can view this link.

The paper talks about how humans tend to trust one another. But does it work the same way when it comes to trusting organizations?

A community of trust is required to survive. That’s what trust is based on.

Understanding that, what can organizations do to gain the trust of their consumers/users? I outline five key tools that allow us to trust each other: long-term relationships, transparency, intentionality, revenge and aligned incentives.

View the paper by clicking on this link.

Trustfully yours,


Life (and the Pursuit of Happiness)– But for How Long?

Confronting our mortality is not an easy task for most people. However, there are many reasons people should consider just how long they might live.

In the case of retirement planning, life expectancy is important in relation to the benefits like Medicare and Social Security that people earn during their working years. According to the Pew Research Center, use of these government benefits programs is “virtually universal (97%) among those ages 65 and older—the age at which most adults qualify for Social Security and Medicare benefits.”

Differences in life expectancy between the rich and the poor can mean that more affluent Americans receive hundreds of thousands of dollars more in benefits that those who are less well off. In addition to the economic considerations, there is a psychological and perhaps even moral factor that comes into play when thinking about how long we might expect to live in relation to our financial status.


Topic 3 in Fair Game? asked users to think about exactly this question and to estimate how income is related to life expectancy and what that relationship should be in a fair world.

“It will surprise nobody to learn that life expectancy increases with income.”— Michael Specter, 4/16/16, The New Yorker


On the whole, our users estimated that the richest 10% of society would have a life expectancy 12 years longer than the poorest 10%. In reality, the difference is 11 years (12 additional years for men and 10.1 additional years for women).

How many more years of life do they think the wealthy should expect in a fair world? 3 more years (a 75% reduction from their estimate of what is true).


Estimates for the current difference in life expectancy were remarkably similar across all age groups, as were our users’ beliefs about what would be fair. Preferences for a fair difference were also similar. There may be hints of a difference between younger and older adults, with a possible explanation simply being ‘mortality salience’, or how much longer users themselves’ expect to live.


What about gender? Both males and females estimate 12 more years of life for the top 10%. But they differ slightly in what they think a fair amount of additional years would be — 4 vs. 3, respectively.


And political leaning? People who identify as conservative and those who identify as liberal only differed by 1 year in terms of what they believed the life expectancy gain from wealth to be, and 2 years in what they thought it should be in a fair world. Conservatives estimate the gain to be 12 years, while liberals put it at 13 years. In terms of what they think would happen in a fair society, conservatives consider 5 years and liberals consider 3 years to be a fair number of years gained with wealth. Despite these small differences, the presumed improvement (from what is thought to what it should be) ends up being 7 years for conservatives vs. 10 years for liberals.

Together, the data reported here suggest that estimations of the present gap in life expectancy are fairly accurate. And that small differences in life expectancy (3-5 years) are considered fair (or perhaps tolerable) by most people. Has the wealth-based life expectancy gap always been this large? According to a Brookings report, it has actually grown from 4.5 years (for the cohort of seniors born in 1920) to 11 years (for the cohort born in 1940). It is likely that multiple factors, including differential access to quality medical care, and higher rates of smoking and obesity, contribute to the growth of this gap. On top of all of this, wealthier people typically retire later and can delay receiving social security payments, thereby increasing income inequality in the older population.

Unfortunately, public benefits that were originally intended to be progressive seem to be becoming (unintentionally) regressive over time. Perhaps there are some solutions that might help to keep more Americans living long, happy, and healthy lives?   

What do you think? Please join us and play along by downloading Fair Game? from iTunes or Google Play.


On Advice and Daily Dilemmas

Have you ever had a burning curiosity or a puzzling life dilemma? Each week, many people write to my Ask Ariely column for guidance – and I’ve now created an app to help disseminate some of their questions and my advice.

If you’ve ever wondered what to eat when you’re heartbroken, how to effectively raise money for a charity, why you’re so willing to buy expensive beer, or why people tend to think God shares their beliefs, this app is for you.

Responding to people’s curiosities is one of my favorite parts of being a behavioral economist and researcher. I hope to share my enjoyment with you in this app, which features bite-sized excerpts from my latest book, Irrationally Yours, for easy reading.

The app is live now, available for Android and iOS users alike.

Happy reading,


“Equal Pay for Equal Work”

It’s a simple statement but it represents so much more than just four words. For many people, it is a rallying call for closing the gap between men’s and women’s wages, ultimately achieving the goal of pay equity, and protecting a notion of basic fairness.

Others question the very idea of what equal work means, with some people arguing that women make different career choices compared to men and that any gap is merely a reflection of those choices. But in the United States, there are many historical examples of inequality affecting women including: denial of property rights, the right to vote, the ability to obtain higher education, and barriers to particular occupations and specialized careers.


Given the complex history of women’s equality in the U.S., we wanted to find out what people think about the current state of working women and their pay relative to men. We focused on the gender wage gap for topic 2 of Fair Game?, our new app that asks users what they think about the world as it is today and what they would want in a fair world.


Surprisingly, people tend to overestimate the gender wage gap and believe women earn 73% of men’s income. In reality, women are estimated to earn 79% of men’s income.

How much do people think women should be paid in a fair world? 93% of men’s income.


Overall, responses did not dramatically differ by the age of the user.


How does your own gender relate to what you think about this? Male and female users both overestimated the magnitude of the gender wage gap, with men thinking women currently earn 74% of men’s salaries, and women estimating that they earn 70% of men’s salaries.

There was closer agreement for the question of what a fair wage gap should be, with males preferring 93% and females preferring 94% of men’s salaries. On the whole, both genders perceive a gap to exist in the United States and would substantially – but not completely – close that gap in a fair society.


And can we observe differences in views according to political beliefs? People who identify as conservative and those who identify as liberal only differed by 4% in terms of what they believed the gender wage gap to be, and 3% in what they thought it should be in a fair world. Conservatives estimate women’s salaries to be 76% of men’s, while liberals put that percentage at 72%. In terms of what they think would happen in a fair society, conservatives consider 91% and liberals consider 94% to be a fair ratio of women’s to men’s income. Despite these relatively small differences, on average, the increase in women’s salary thought to yield fairness would be 15% for conservatives vs. 22% for liberals.

The gender wage gap is a topic that deserves careful consideration. Although a single number represents an average for all women, the number varies substantially once we consider factors including race, age, education, profession, career trajectory, childbirth status, and U.S. state of residence, to name a few.

There is also likely to be some gender role stereotyping at play in the results we received, with many of our respondents probably assuming that the burden of childcare would or should fall disproportionately on women.

This is a complex topic, but we can learn from some efforts to equalize opportunities in the workplace for women. A program in the Canadian province of Quebec provided an interesting natural experiment, demonstrating that subsidized daycare could support an upsurge in employment of women that in turn boosted economic output to a level that more than paid for the childcare subsidy costs1.

A final consideration is how long it will take to close the gender wage gap, given the progress that has already been made. One measure of improvement (the upward trend since the 1960’s), predicts the gap to close by 2059. But if a recent slowdown in the trend persists, the gap would not close until 2152. What other efforts do you think might be worthwhile to pursue to help close this gap, sooner or later?

And please join us and play along by downloading Fair Game? from iTunes or Google Play.


  1. Fortin, Pierre et al. (2012). Impact of Quebec’s Universal Low-Fee Childcare Program on Female Labour Force Participation, Domestic Income and Government Budgets. Sherbrooke: Research Chair in Taxation and Public Finance, University of Sherbrooke.




Fair Game? How many average workers’ salaries does it take to pay the CEO?

Inequality is an important topic and one that politicians and scholars spend a lot of time thinking about. But what does the general public think about inequality and the many ways it manifests in daily life? And how do factors like age, gender, or political leanings relate to our views on inequality?

Those are the questions we are exploring with Fair Game?, our new app that asks users what they think about the world as it is today and what they would want in a fair world.

We’re asking users about 13 different topics related to inequality, from wage gaps to opportunities for education, and will be sharing our findings every few days now through mid-November.

Please join us and play along by downloading Fair Game? from iTunes or Google Play. We’ll release a new question every few days until we get through all 13.

You can think about the first topic right now.


So far, the data show a consistent knowledge gap.


Our users estimate that the average CEO’s pay is equal to 151 average worker salaries. In reality, the average CEO makes the same as 303 average workers combined. What do people think CEOs should be paid in a fair world: the same as 72 average employees combined.

We also found some interesting patterns in what people think.


Younger people estimate the ratio of CEO pay to average worker pay to be larger than others do, and also think a larger ratio is fair. Perhaps younger people have lower salaries and therefore think the average worker’s salary is lower? Or they are looking ahead to larger, CEO-like salaries in the future, and that influences what they think is fair?

What about gender?


It is notable that males and females arrive at the same number for what would be fair (72 average worker salaries for each CEO), but differ in what they think currently exists in the world (158 for males vs. 140 for females). Perhaps the gender wage gap influences the perception of what salaries are in the world?

And political leaning?


People who identify as conservative and those who identify as liberal give similar estimates of what the current CEO to average worker salary is (149:1 and 152:1, respectively). But political leaning makes a big difference in what people think what would be fair.  Liberal respondents believe 63:1 would be fair, whereas conservative respondents believe that 93:1 would be fair.

It is encouraging that political leaning does not dramatically change our respondents’ perceptions of the world. Both conservatives and liberals underestimate the magnitude of executive pay relative to worker pay in the United States. But their differing assessments of what would be fair suggests that conservatives and liberals might choose different approaches to reducing the executive-to-worker pay ratio.

Executive compensation is by no means a simple issue. In fact, the 2016 Nobel Prize in economics was awarded to researchers who considered how motivational factors should be related to pay, bonuses, stock compensation and the timeframe of company performance in order to achieve optimal levels. One of the winners, Bengt Holmström, told a reporter after hearing he had won, that he thought executive bonuses were “extraordinarily high” and compensation contracts were too complicated.

Has it always been like this? The ratio of executive pay to worker pay was 20-to-1 in 1965, when CEOs earned an average of $832,000 annually, compared to $40,200 for workers (adjusted for today’s dollars). In 2000, the number peaked at 376-to-1, and has since settled back down to the recent level of 303-to-1 (and some estimates are as low as 216-to-1).  This increased ratio means that CEO compensation has risen dramatically over the past few decades, but the average worker compensation has not. In 2014 the average CEO made $16,316,000 compared to the $53,200 made by the average worker.

In an effort to promote greater transparency, the Securities and Exchange Commission will soon require every publicly traded company in the United States to disclose this ratio. A recent bill proposed in the California Senate calls for instituting a sliding scale of corporate taxation, with companies paying different tax rates based on their ratios and sharper increases for those with CEO to average worker pay ratios greater than 100-to-1. Other proposals for reducing the ratio and social ramifications of large gaps in companies include greater profit-sharing across employees and a more consistent relationship between (long-term) performance and bonuses.


Ask Ariely: On Celebratory Savings, Tools for Temptation, and Anticipating Activities

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


Dear Dan,

My wife and I recently had our first child. We know that friends and family, especially grandparents, like to buy gifts for children for birthdays and holidays. But we have set up a college savings account for our child and would much prefer to have our loved ones put money into this account rather than buy things that our child doesn’t really need. How can we encourage this more rational behavior?


Though giving money is often more economically efficient than giving stuff, the feeling of social connection that we get from gift-giving is higher when we give something tangible. If I were you, I would try to provide the gift-givers with a chance to do a bit of both. You can ask them to buy something small for your child and also to put some money in the college fund.

If you want an even higher proportion of the money to go to the college fund, buy a nice book with blank pages and on its cover write your child’s name and the word “future” (“Dan’s Future,” for example). You can then ask each gift-giver to put money in the college fund and, at the same time, to share some advice for life by writing on one page of the book. This way, there will be a physical reminder of their gift (the book and the advice), but more of the money will go to the college fund.


Dear Dan,

I am trying to stop using Facebook because it only wastes my time and makes me feel bad about myself. But despite repeated attempts to stay away from my Facebook page, I keep coming back to it. I think part of the reason is that I’m so impulsive. Do you have any advice on how I might finally break my Facebook habit?


My recommendation is to create some sort of “Ulysses contract.” As you will recall from Homer’s ancient tale, Ulysses knew that if he allowed himself to hear the tempting calls of the Sirens, he would follow them and in the process kill himself and his crew. So he asked his sailors to tie him to the mast of his ship and put wax in their own ears. Ulysses thus protected himself from temptation by making it impossible to take action when temptation appeared. He didn’t have to summon his willpower to resist.

Maybe you can make your own Ulysses contract by asking a friend to change your Facebook password and not to tell you what it is for a month. This will give you a chance to see what life without Facebook feels like and to decide if that is indeed what you want. If it is, you can then go ahead and delete your account—and you will be free of Facebook.


Dear Dan,

I hate waiting for anything. I get very impatient when I have to wait for food in a restaurant, for my new iPhone, for the next time I will meet a good friend, etc. Is there anything I can do to make it less painful to wait?


Sometimes anticipation can be a pleasurable part of the experience. Imagine, for example, that you could get a kiss from your favorite movie star. Would you rather get the kiss in the next 30 seconds or in a week? When faced with this question, most people prefer to wait because, in the end, a kiss is just a kiss, but waiting for a unique kiss can be wonderful. My advice is that you try to get into such a mindset for other experiences as well, and instead of thinking about waiting as a delay, think about it as an opportunity for anticipation.

P.S. I got this question from you a few months ago, and I hope that you enjoyed anticipating my response.

See the original article in the Wall Street Journal here.

A new online course for social entrepreneurs

At the Startup Lab (my incubator at Duke University’s Center for Advanced Hindsight), we aim to empower early stage startups to build better consumer health and finance products by teaching them how to apply both the findings and methods of behavioral economics to their products and business models.

SL_Logo1While the in-depth Startup Lab program is limited to a small group of startups that go through our rigorous application process, it would be an injustice to not share some of its lessons with the greater community. So I’ve collaborated with +Acumen to create an online course to help social entrepreneurs make an impact – by designing products that change consumer behaviors for good. But what I am most excited about is the lesson on experimentation. I am always getting questions about how startups can experiment within their small companies (with few resources, especially time), and this course provides the tools for entrepreneurs to take a systematic approach to experimentation.

Sign up for my Master Class with +Acumen on Changing Customer Behavior, now available here:



On Fairness — please join us

What is fair?

According to Merriam-Webster:

: agreeing with what is thought to be right or acceptable

: treating people in a way that does not favor some over others

: not too harsh or critical

Many people can tell you when something is NOT fair (especially children, who test this concept more thoroughly than any scientist could)! Injustice may be an easier phenomenon to spot in the world (especially when we are the victim or perceived victim).

Does society view what is right or acceptable through a single lens, or does an individual’s unique background and experience shape their perception of fairness? In our new app, you can join in by answering questions about aspects of life in the United States. Do you think the world that we live in is fair? What should the world look like? Give your opinions and be a part of this large-scale social expression. You may  learn something about yourself and about society. And you’ll help us answer the question, “Is life for everyone in the United States a Fair Game?


To download for Apple:


To download for Android/Google:

Ask Ariely: On Ingesting Insects, Tracking Troubles, and Making Matches

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


Dear Dan,

Many insects are edible, nutritious and even tasty, and they are consumed by millions of people world-wide. But when I try to eat one, I cannot get past the idea that bugs are, well, gross. Why?


For many in the West, thinking about insects, not to mention eating one, evokes a powerful feeling of disgust. Psychologists often think about disgust as a sort of mental immune system, a deeply ingrained emotion that we have developed for evolutionary purposes to help us avoid pathogens, poisons and other pitfalls. You can even observe disgust in babies when they narrow their nostrils, constrict their lips and close their mouths while trying to expel or reduce contact with a potential contaminant.

So how could you get over your revulsion here? One option would be intensive immersion with insects. You could perhaps spend a week surrounded by pictures of them and then spend the next week locked in a room with nothing to eat but bugs.

Another less extreme option: Buy some insect powder and ask a friend to sprinkle it randomly into your meals, without your knowledge, and only tell you the next day which ones contained insects. Once you realize that the food still tasted good, your disgust should decrease.


Dear Dan,

A recent study in the Journal of the American Medical Association found that for many young adults, using a personal monitoring device may not help them lose weight. Should I stop using my Fitbit?


When people start an exercise regimen, they often gain weight. The main reason: After we work out, we feel that we deserve a reward, such as a few scoops of ice cream. These extra calories can exceed those that we burn during our workout. I suspect that a similar phenomenon occurs when we wear tracking devices: We see that we’ve walked 10,000 steps or stood up 12 times during the day, and we feel justified in celebrating our amazing achievements. And of course, when we fail, we don’t feel that we need to deprive ourselves—so either way, it’s easy to wind up putting on pounds.

Still, you shouldn’t stop tracking your behavior. It is important to your health to understand when and how you become more or less active. Measurement can motivate you to become more active. And at the same time, you can work to discipline yourself not to expect a “reward” for hitting your daily targets.

You might also change the way that you measure success. What if, for example, you defined success not by making it to the gym on a particular day but by making it there on at least 80% of the days in a month—and only reward yourself when you clear that bar? If you move to such a system, I predict that tracking your health will work for you.


Dear Dan,

Like many of my friends, I love Tinder. The dating app provides a slideshow of potential romantic partners, and if two people “like” each other, Tinder tells them that they matched. How can such a simple app with so little information be so effective?


When we think that we’re compatible with someone, we behave accordingly. A few years ago, the dating site OkCupid told users who had been rated only a 30% match for each other by the site’s algorithms that they were actually 90% matches—and these users ended up liking each other more. In Tinderland, when both people learn that they “like” one another, their expectations change, the match seems more appealing, and the power of self-fulfilling prophecy takes over.

See the original article in the Wall Street Journal here.

Ask Ariely: On Freelance Feedback, Teacher Tardiness, and Meal Money

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


Dear Dan,

I’m a freelance copywriter. I like not having to hold a regular day job, but I never get performance assessments, never learn what I can do better, and never know why people stop hiring me. So to improve my performance, I’ve been thinking about sending my clients a short survey about the quality of my work. But I worry that if they’re forced to think about it, they might say, “Hmm, she’s not actually that friendly” or, “Hmm, her work is just average”—and stop hiring me. What do you think?


Ask for the feedback. You might lose some clients in the short term, but the surveys should help you improve your work in the long term.

The trickier question is how to ask for feedback in a way that minimizes negative perceptions about your work (and maybe even spurs your clients to see your work more positively). You can do this by asking your clients to list 10 ways you could improve your work.

My guess is that your clients will easily find one or two ideas for how you could perform better, which will be useful feedback. But after that, they will find it increasingly difficult to come up with pointers until, perhaps at suggestion five, they will run out. By then, they will start thinking, “I can’t find many things wrong with this copywriter—so she must be great.” By creating the expectation that there should be 10 ways to improve your performance and having them come up well short of that, you incline them to think more positively about your work.


Dear Dan,

At my school, in an effort to discourage teacher absenteeism and tardiness, we’ve instituted a carrot-and-stick system: Teachers gets a monetary reward if they are on time every day of the week, but if they are late on even one day, they lose a corresponding amount from their wages. Does this system make sense? Do you think it will work?


Yes and no. Assuming that the reward money is a substantial amount, the teachers will probably try hard to be there on time. On the other hand, since you’ve made the reward all-or-nothing (perfect attendance or a penalty), your teachers are also likely to experience the “what the hell effect.”

Imagine, for example, a teacher who was late for class on Monday. What will be his or her motivation for being on time for the rest of the week now that they’ve missed the mark on perfect attendance? Less dedicated educators may well shrug and start showing up late on purpose. I’d predict that teachers will start each week trying to be punctual, but once they slip, they’ll give up completely. You would probably be better off with a less punitive approach that is more compatible with a learning environment.


Dear Dan,

I’m an excellent cook who’s planning to host a gourmet, home-cooked meal for about 10 people. I’d like to use the pay-what-you-want method. So what’s the best way to ask for the money? Should I ask people to pay up front or at the end, and should it be in public or anonymous?


Based on the principle of reciprocity, you should ask for the money at the end of the meal (when people will know how good your food was). I would give people envelopes with their names on them at the end of the evening and ask them to put their payment inside. This way, your guests will be accountable to you but won’t know exactly how much their fellow diners paid. Have fun.

See the original article in the Wall Street Journal here.