Dan Ariely

Before television and the internet, political candidates had two primary means of getting their image out into the public: live appearances and campaign posters. And given the limited reach of the former, posters were a crucial element in political strategy. How else were candidates supposed to project an image of decisiveness and gravitas?

So when Franklin D. Roosevelt ran for governor of New York in 1928, his campaign manager had thousands of posters printed with Roosevelt looking at the viewer with serene confidence. There was just one problem. The campaign manager realized they didn’t have the rights to the photo from the small studio where it had been taken.

Using the posters could have gotten the campaign sued, which would have meant bad publicity and monetary loss. Not using the posters would have guaranteed equally bad results—no publicity and monetary loss. The race was extremely close, so what was he to do? He decided to reframe the issue. He called the owner of the studio (and the photograph) and told him that Roosevelt’s campaign was choosing a portrait from those taken by a number of fledgling artists and studios. “How much would you be willing to pay to see your work hung up all over New York?” he asked the owner. The owner thought for a minute and responded that he would be willing to pay $120 for the privilege of providing Roosevelt’s photo. He happily informed him that he accepted the offer and gave him the address to which he could send the check. With this small rearrangement of the facts, the crafty campaign manager was able to turn lose-lose into win-win.

This story reminds me of the famed trickster, Tom Sawyer, who duped the neighborhood boys into trading him toys and apples for the chance to whitewash a fence. When one of the boys taunted him for having to work instead of going swimming, Tom responded with all seriousness, “I don’t see why I oughtn’t to like it. Does a boy get a chance to whitewash a fence every day?” Then when the boy asked for a chance to try it, Tom hemmed and hawed until finally the boy said he would give up his apple for a chance to whitewash the fence. Once Tom had one taker, outsourcing the rest of the work to other boys was a snap.

I conducted a similar experiment in a class I was teaching on managerial psychology. One day, I opened my lecture with a brief reading of a poem by Walt Whitman, after which I informed the students I would be doing a few short poetry readings, and that space was limited. I passed out sheets of paper providing students with the schedule of these readings along with a survey. Half of the students were asked whether they would be willing to pay $10 to come listen to my reading; the other half were asked whether they would be willing to listen to my reading in exchange for $10. Sure enough, those in the second group set a price for enduring my poetry reading (ranging from $1 to $5). The first half, however, seemed quite willing to pay to attend my poetry reading (from $1 to about $4). Keep in mind that the second group could have turned the tables and asked to be paid for listening to my recitation, but they didn’t.

In all of these situations, people (the campaign manager, Sawyer, and myself) were able to take a situation of disadvantage or ambiguous value and spin it to their (my) advantage. Once Sawyer pretended to be unwilling to part with the privilege of whitewashing, other boys wanted it, because obviously Tom was hoarding all the fun. When I told my students that space was limited and gave a suggested price for the recitation, I created the idea that this was an experience they would definitely want to have (as opposed to the other group, to whom I insinuated that listening to my reading of Whitman might be less than enjoyable).

I think Twain summed this strategy up best when he wrote the following about Tom: “He had discovered a great law of human action, without knowing it – namely, that in order to make a man or a boy covet a thing, it is only necessary to make the thing difficult to attain.”

A 70-year-old, extremely wealthy widower, shows up at the Country Club with a beautiful and very sexy 25 year-old blond who knocks everyone’s socks off and who hangs over Bob’s arm and listens intently to his every word.

His buddies at the club are all aghast. At the very first chance, they corner him and ask, “Bob, how’d you get the trophy girlfriend?” Bob replies, “Girlfriend? She’s my wife!” They’re knocked over, but continue to ask, “So, how’d you persuade her to marry you?”

“I lied about my age,” Bob replies, “I told her I was 90!!”

Also see this:

Last night I was on the NEWSHOUR with Jim Lehrer — and today I got an email from a viewer that told me that I should have shaved…

A new mac vs PC — my personal favorite — it is about planning…

Recently I had an interesting experience being poor. It didn’t last too long but it was quite distressing and I learned how difficult this is. The story is as follows. I was out of the country for a month and during that time my car insurance expired. When I got back I called my insurance agent and I asked them to renew my policy. “No, no, no, ” they said, “If your insurance has elapsed you can’t do it over the phone and you have to come to our office in person.” Well at that time I was living in Princeton and my insurance agency was 300 miles away in Boston.  So I took the train up, got to the insurance office on time and I was ready to hand them a check and renew my insurance.
Well, here again, I was wrong. It turns out I could not do it by check. The insurance company would not take a check from me because, after all, I have shown I am financially irresponsible. “Will a credit card do?” I said. “Of course not. Only cash.” The limit I can take out with my ATM card is $800 a day and the insurance was almost $3,000 (needless to say they also increased my premium). So I could not solve it this way. “Luckily” the insurance agent had a solution at hand that was designed for this very particular problem.  There is another company they told me that would finance my insurance fee. Interestingly enough, the cost of this financing included 20%  interest rate on the loan itself plus a $100 fee just to enroll in this program.
I had no choice but to take this particular loan. So I paid the $100 fee, I paid the 20% in interest, and I got my insurance. I took the train back to Princeton. A few days later, of course, I canceled this terrible loan and paid it off. But here is what I learned from this distressing lesson, the moment you make one financial mistake the chances that you will be hit with all kinds of fines, all kinds of difficulties, all kinds of financial obstacles, are much, much higher.
If I was on the verge of financial difficulty there is no question that this particular incident would have pushed me over the edge, making my financial life much more difficult and maybe even impossible. I think that this is, in fact, what we do to people with financial constraints all the time. We impose substantial penalties on the people who violate financial responsibilities, not taking into account their viability and therefore make their lives much, much worse.
How can we get over this issue? I think we have to reconsider the punitive systems all the financial institutions use (insurance, banks, credit cards, etc.), and think more carefully about how we want to share responsibility and payment across people.  After all when someone goes bankrupt, they of course suffer, but so does the whole system around them.  From this perspective, it is easy to see how the punitive systems we are using are not only bad for the individuals but they can be very damaging for the whole society.

When do we consider and not consider hygiene?