Tag: wsj

Ask Ariely: On Justifying Gadgets, Job Satisfaction, and Just Flowers

Apr 25

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 thinking about buying the new Apple Watch, but I’m sure if it is worth it. Any advice?

—Greg

I’m not sure I can be truly objective here: I just might want one, and if I suggest that you shouldn’t get one, how could I justify buying one for myself later?

So without wanting to limit my own future purchases, let’s more generally consider the question of how we figure out whether luxury items are worth the cost.

Let’s take a very different product, black pearls, as our example. When black pearls were first introduced to the market, nobody wanted them [for more about this story, see Predictably Irrational]. But then the famous jeweler Harry Winston placed black pearls in his display windows alongside his rubies, sapphires and diamonds. He set the price of black pearls high, and they have been very valuable ever since. An important lesson from this story is that people tend to make relative judgments and to use only objects that are easy to compare as the standard for appraisal (like those rubies, sapphires and diamonds).

This implies that when you’re examining future purchases, you should ensure that you don’t just compare the object of your desire to similar objects but to other, very different things that you might also want. As you expand your scope of comparison, you should be able to make more reasonable decisions.

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Dear Dan,

I’m an air-traffic controller at a large airport. I don’t work in the tower but in a remote radar facility about 30 miles away, handling traffic within 50 miles of the airport. As a radar controller, everything is completely abstract. Would being able to actually see the planes I am guiding take off and land generate greater job satisfaction than just seeing targets on a screen?

—Zack

Probably. In many different domains (including moral judgment and empathy), when we present information in increasingly abstract ways, emotions get suppressed, and we care less. So if you plan to stay in this type of job for a while, moving to a tower might well boost your motivation.

But even if you stay put, other changes might increase the perceived meaning of your labor. What if your screen showed how many passengers were on each plane? What if, at landing time, you were told that they were all healthy? What if you were shown some pictures of the people waiting for them at the airport? With such changes, the information you have about the passengers in your care would be more than just a dot, and both your caring and your motivation should increase.

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Dear Dan,

I sometimes invite friends for dinner, and they usually ask me which dish they can bring. Actually, I really don’t want them to bring anything: It doesn’t help me out, and it might not fit with the meal I’ve got planned. But I’m not sure how I can politely reject their nice offer.

—Sigrid

I’ve had the same problem. At one point, I Googled “most difficult recipes” and picked the one I liked most. The next person who asked me what dish they could make got that recipe. I’ve been using this approach ever since, while also telling people that it truly is fine not to bring a dish. They inevitably end up bringing wine or flowers.

 

See the original article in the Wall Street Journal here.

 

By the way! “Irrationally Yours,” a book based on this column, will be published May 18 by HarperCollins (which, like The Wall Street Journal, is owned by News Corp).

Ask Ariely: On Ephemeral Emotions, Getting Gadgets, and Treacherous Taxes

Apr 12

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,

Every time a severe natural disaster strikes, like a typhoon or the outbreak of a new epidemic, everyone starts talking about how to combat these problems, but all the chatter dies down in a week or two. Given the importance of these issues and the number of lives they affect, why do we have such short-term memories? And how do you keep up interest in topics like these?

—Akhil

The problem isn’t with memory—it is with emotions. Every time we see those televised images of disaster, our emotions get ignited, we care, and we want to act. But over time, our emotions inevitably subside, and we stop caring.

If the problem here just had to do with memory, finding a fix would be simple: We have plenty of ways to remind people about important things they forgot. But we don’t know how to fully re-invoke emotions.

So what can we do? I’d suggest crafting legislation to deal with such crises in advance, then just holding onto it until the next disaster strikes. Then, while emotions are running high, take the bill out of the drawer and try to get people to commit to some concrete steps forward.

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Dear Dan,

What should I know about a product before I buy it?

—Pat

When we look for a product—say, a new electronic gadget—we usually try to understand exactly what it does, how it works, what are its features, etc. We hope this will help us figure out if the product is right for us and worth all that money. The downside of this approach is that the knowledge it provides often reduces the fun, surprise and discovery that come with experimenting with a new electronic gizmo.

Ideally, someone would be able to tell us whether we should get the product or not, while leaving us to discover our new gadget’s capabilities after we’re holding it. Another advantage to this approach: It leaves us to enjoy more buildup and anticipation as we wait for the gadget to arrive.

When I was looking for a new camera, I asked my friend David (my personal expert on everything technological) what he thought I should get, and I purchased the exact camera he suggested without even checking the details. Then I started anticipating its arrival, and I enjoyed learning all about it by playing with it after it was delivered. Maybe you should try to get your own David.

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Dear Dan,

What percent of Americans cheat on their taxes?

—Lee

I’m not sure, but it’s clearly a large amount: Pew Research estimated that the IRS lost about $270 billion dollars for tax “underreporting” in 2010. I tend to agree with Will Rogers, who once said, “The income tax has made liars out of more Americans than golf.”

Taxes don’t just tempt many Americans to cheat. They also kill us. A 2012 paper by Donald Redelmeier and Christopher Yarnell published in the Journal of The American Medical Association found that over the past 30 years, fatal accidents increase by about 6% on April 15 compared to standard days. The authors chalk this up to stress. They also show that this increase doesn’t hold for people at retirement age (who, presumably, aren’t that stressed about taxes), has increased over time (suggesting we’ve been under more stress as U.S. taxes have grown more complex) and is particularly large for those of us on the West Coast (where state taxes are particularly high).

Of course, these two findings—increased dishonesty and increased stress—could be linked. So this tax season, please try to be safe when filling out and delivering your 1040s.

 

See the original article in the Wall Street Journal here. (add link to “here” and delete this)

Ask Ariely: On Moving In, Stopping By, and Checking Out

Mar 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,

Last week, I asked my girlfriend to move in with me. After an awkward silence, she said that she couldn’t move in with me because she’s scared of dogs and dislikes my small Jack Russell terrier. I love my girlfriend and don’t want to lose her, but I don’t want to give my dog away either. Any advice?

—Mike

This was most likely a test of your love for her, and you failed—so you don’t really need to worry about this particular dilemma.

Still, you may face something similar in the future. If we looked at your dilemma from a rational economic perspective, the answer would be straightforward: Start by writing down how much happiness you get each day from your dog and how much happiness you expect to get each day from your girlfriend. Next, multiply each of these numbers by the expected duration of the relationship and discount it by the natural decline in happiness as relationships go on. Then pick the relationship with the higher number.

Or we could use a more psychological perspective, rooted in what social scientists call “loss aversion.” According to loss aversion, we care more about avoiding losses than we care about winning gains. That means that, from your current perspective (living with your dog but without your girlfriend), you are probably overly focused on the loss of your pooch and insufficiently focused on the gains of joint life with your girlfriend. To overcome loss aversion, frame your choice not as giving up one thing and getting another but as a choice between two potential future states: one life with your dog but without your girlfriend, and another with your girlfriend but not your dog. Play out the two scenarios in your head, with all the little details of life, and see which scenario leaves you smiling more.

Finally, if you do go with the economic approach, choose your girlfriend and she asks you how you made your decision: Don’t ever tell her.

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Dear Dan,

I have lots of friends who grew up outside the U.S., and they often tell me that their social lives here aren’t as good as they were in their home countries. Are they just romanticizing their homelands, or are we Americans doing something wrong in our social relationships?

—Wendi

I agree with your friends—and I don’t think their memories are just biased and romanticized. Social life in the U.S. isn’t as good as it could be because Americans try too hard to be social.

I grew up in Israel, where friends simply stop by unannounced. This means that, as a host, you aren’t prepared, and no one expects to you to be. In this mutual low-expectations setup, visitors simply get integrated into whatever is going on. If they show up at dinnertime, they pull up a chair; if they come beforehand, they help chop vegetables.

In the U.S., on the other hand, we plan to see someone in seven weeks at 8 p.m., and everyone gears up for the occasion. The hosts clean the house and cook something special; the guests dress up and bring a gift. The whole process demands much more effort, and we therefore do it much less frequently. Maybe we should all lower our expectations and raise our appreciation for serendipity in our social lives.

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Dear Dan,

What is the best way to teach my kids about money?

—Raquel

Become their pay-day lender. Next time you’re in the checkout line at the supermarket and your kids want candy, offer to lend them the money at a weekly interest rate of 20%. Do this a few times, and they’ll quickly learn some important financial lessons.

See the original article in the Wall Street Journal here.

Ask Ariely: On Free Bags and Free Markets

Mar 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 live in California, which recently passed a law that lets supermarkets charge 10 cents or more for each paper grocery bag. (The law is now on hold, awaiting a referendum next year.) Though the 10-cent fee isn’t a lot of money, I now find myself regularly bringing canvas bags from home when I go shopping. Am I really so stingy that a dime makes such a difference to me?

—Stacy

I wouldn’t jump to any conclusions about your stinginess. I suspect that this has much more to do with how the supermarket charges for the paper bags than with the amount itself.

Not long after California’s law passed, I happened to be in Palo Alto, and out of curiosity, I went to observe the locals in their natural environment—Whole Foods. I purchased an expensive cup of coffee, positioned myself near the cashiers and watched. Much like you, many of the shoppers either brought their own canvas bags or purchased new ones as they checked out.

I estimated that the average grocery bill was more than $150. Assuming five bags for a load of this size, that is just an additional 50 cents—a small enough amount that no one would be likely to notice if it were simply added to their total. But that isn’t how the process works. Instead, buying bags is set apart as a separate transaction that takes place only after the cashier has finished ringing up the groceries. This separation causes shoppers to pay more attention to the bags’ cost. It makes getting the bags seem more like a tax than a purchase, and it also makes buying bags feel morally wrong, wasteful and environmentally damaging.

That is why the procedure for purchasing the bags is so important: It can take someone who wouldn’t normally pay attention to a small price increase and get them to change their behavior over a few cents.

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Dear Dan,

How could anyone who has observed the world economy over the past few decades doubt that free markets are the only path to growth and success? Isn’t it time to learn this lesson and eliminate all anticompetitive regulation?

—Nick

I’m not sure that I agree. Consider the case of an industry regulated in the following very extreme way to limit competition:

1. There is a minimum and a maximum amount of money that an employee can earn each year and a maximum length of employment. Employees’ bonuses are also limited to certain sizes and types.

2. A company can only spend a certain amount in salary each year, across all their employees. Pay too much, and you pay a fine.

3. New employees can’t pick the company they want to work for. They’re recruited and assigned to a company by a centralized administration. Better employees are more likely to be assigned to firms that did poorly the previous year.

4. If a company’s owners want to sell it, the new buyer must be approved by the owners of the industry’s other companies.

5. About half of each company’s revenues goes into a central tax pot, which is redistributed among all the companies in the market.

6. Employees are subject to random drug testing.

7. While employees are under contract, they can’t negotiate with any other company.

8. Employees can be sold to other companies without their consent.

By now, you’ve probably realized that if you replaced “company” with “team” and “employee” with “player,” you’d get many of the rules that regulate the NBA—a very successful commercial enterprise and, to my mind, an important example of some of the benefits of regulation.

See the original article in the Wall Street Journal here.

Ask Ariely: On Reasonable Requests, Trash Talk, and Paper Piles

Feb 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,

I fly by myself every week for work. I always fly coach and try to book my trips months in advance so I can get an aisle seat closer to the front of the plane. With fuller flights nowadays, I am frequently asked to move to accommodate a family or a couple who want to sit next to each other. I usually say yes and end up in a middle seat at the rear of the plane, which I hate. On the few occasions I have declined to move, the cabin crew has treated me like the enemy for the entire flight. How do I handle such situations?

—Kevin

Many years ago, Harvard psychology professor Ellen Langer carried out one of my all-time favorite studies. She asked her research assistants to look for lines for photocopiers, approach someone waiting to make copies and say, “Excuse me, can I get in line in front of you?” Unsurprisingly, this request was usually refused. Prof. Langer then had her research assistants change their phrasing and instead ask, “Excuse me, can I get in line in front of you—I need to make a photocopy” With this new version, they were frequently allowed to cut in. Obviously, the second phrase held no new information—why would anyone join this line if not to make a photocopy? But the longer phrasing had the structure of a reason-based-request: Excuse me, may I do X, I need Y. Prof. Langer showed that because people often don’t pay attention to what we say, it is sometimes enough to say something that sounds reasonable—and people will often agree.

So what can you say to the flight crew? It doesn’t really matter; it just needs to sound like a reason.

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Dear Dan,

The other day, I saw someone throw out garbage from her car. Other than pick up after her, should I have said something? If so, what? I was concerned about starting a confrontation that could have turned ugly.

—Blaine

You should have certainly said something—perhaps something like, “Excuse me—I’m new in town, and I’m trying to figure out the local customs. Is throwing out trash from the car window something that is common here?”

You should have spoken up not only because it might make her think twice in the future but also for you. At some point, you will inevitably encounter bigger injustices and even more inappropriate behavior. How can you expect to stand firm in these large cases if something as simple as a comment about trash left you too fearful to speak up? Think about such small cases of confrontation as training wheels that will help move you toward becoming the person you want to be—and start practicing.

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Dear Dan,

I have this pile of papers on my desk. It is growing by the day, and the clutter is driving me crazy. At the same time, I don’t feel like I can handle my regular workload, so I keep postponing clearing up the pile—and it keeps getting larger and more daunting. Any advice?

—Marc

Sometimes, we need to be forced to make a decision. My advice: spill a cup of coffee on your pile of papers. A few weeks ago, I was grappling with a similar problem, and one morning, while on a video conference call, I reached out to pick up my coffee and knocked it onto the pile of papers. I then had to look at each page and decide whether it was worth cleaning and drying. Most of them were useless.

See the original article in the Wall Street Journal here.

Ask Ariely: On Valentine’s Day, (Over)valuing our Things, and Parental Approval

Feb 13

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,

My friends and I hate Valentine’s Day: It feels arbitrary, contrived and commercial. How can we change our attitude to make the day feel meaningful?

—Frank

What bothers you may not be the arbitrary nature of Valentine’s Day. Lots of celebrations occur on arbitrary dates (New Year’s Day, Thanksgiving and so on), and few people complain. What probably bugs you is the feeling that Valentine’s Day was created as a ploy by the marketing departments of jewelry, chocolate and flower sellers. And it is this adversarial perspective that makes you dislike Valentine’s Day.

Let me suggest a different way to frame Valentine’s Day. In my experience, the vast majority of people aren’t romantic enough, and we often take our significant others for granted. This lack of attention and care translates to conflicts and joint misery. Basically, when we are left to our own devices, we just don’t do enough—as the noted behavioral economist Stevie Wonder put it—to say how much we care.

So since we seem to be romantically challenged, we probably could use some reminders and rules to spur more affectionate behavior. So think of Valentine’s Day as an annual mechanism to help us reflect on our loved ones and pay them a bit of extra attention. The only real question is: Why do we have Valentine’s Day only once a year? Don’t we need it once a week, or at least once a month?

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Dear Dan,

My job involves helping divorcing couples divide their marital estates—their income, assets and debt. I’ve often noticed that my clients irrationally overvalue what they personally own—from jewelry and furniture to pension plans. How can I get them to think more logically about their property?

—Adam

Sometime I ask the students in my classes to build a simple Lego car. When they finish, I place a large trash bin in the middle of the room and ask them to break their creation apart and deposit the pieces in the bin. I also tell them that I will be taking all the pieces, sorting them into sets and using them again in next year’s class. Each time, I see horror in their faces. What kind of a person would ask them to take their creation, destroy it and give it away?

I let them marinate in their grief for a few seconds as I head to the back of the room to haul in the trash can. Before anyone starts breaking their Lego creations, I stop them, tell them that they can keep their Legos and ask them to reflect on their feelings. The students had only a very brief relationship with their Lego masterpieces, but they got very attached to it—which demonstrates how quickly we get attached to the things we own. Now, imagine how much more attached people get if they own something for a really long time.

So what can you do about this attachment problem in your business? Try taking both parties’ possessions and moving them to a trust for a year. When you back come to distribute the property a year later, they may well feel less ownership—and be more open to a reasonable division.

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Dear Dan,

I don’t know how to tell whether I am in love. Each time I become close to a boy, I start thinking about whether my family would accept him and start seeing him through my parents’ eyes. So I never fully immerse myself in any relationship, and I can’t disentangle my opinion of the guy from my parents’. How can I figure out my own, independent feelings?

—Seema

A hint: If you’re thinking about your parents when you meet a boy, you aren’t in love.

 

See the original article in the Wall Street Journal here.

Ask Ariely: On Putting off Procrastination, Selling Sherlock, and Feeling the DICE

Jan 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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I love my job, and I want to be successful and get promoted—but I seem to be my own worst enemy. I procrastinate a lot, and I don’t know how to stop. Any advice?
—Theo
 
You aren’t alone. Think of procrastination as just one more example of how we fail to do things that are in our long-term interests. Much of life is about fighting such temptations. 
 
Perhaps the best tool we have to fight procrastination is to set rules for ourselves. As William O’Donohue and Kyle Ferguson note in their book “The Psychology of B.F. Skinner,” the famous psychologist had a rule of waking up at 5 a.m. each day and not doing anything else until he had written for two hours. Facebook and email weren’t around to distract people back then, but plenty of other temptations were—and Skinner stuck to his commitment.
 
Such clear rules are useful because they leave us in no doubt about whether we are following them or not. This makes us feel bad when we violate them. So pick some rules, make them clear and strict, and for good measure, ask friends, family and colleagues to hold you to them.
 
P.S. Skinner was an amazing scientist, a master at designing his own life and controlling his environment. But I’m not sure he would have had the will power to resist “Candy Crush.”

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Why do people tend to like new versions of old things? In other words, how many versions of “Sherlock Holmes” will be made? Why do different countries make their own versions of TV shows that have already been hits elsewhere? Money can’t be the only reason. Am I the only one wondering, “Can’t they come up with something new?”
—Patricia
 
I’m willing to bet that “Sherlock Holmes” will be with us for as long as humanity continues to exist. The explanation lies in what psychologists call the “mere-exposure effect”: As something becomes more familiar to us through repetition, our brain starts to process that information more efficiently—and we mistake this faster processing for liking something.
 
In one of the first experiments to demonstrate the mere-exposure effect, a few research assistants were asked to sit in a large university class and say nothing for the whole semester. At the term’s end, the students in the class were asked how attractive they found the research assistants who had been sitting in the class, as well as new research assistants whom they had never met. The students, on average, considered the more familiar research assistants to be more attractive. 
 
To go back to “Sherlock”: My prediction is that as we see more of the legendary sleuth, we will like him more and demand more of the same—maybe with small variations, such as the clearly Holmes-inspired, mystery-solving doctor on “House.”

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I work for my company’s digital-strategy team, and for some reason, management doesn’t realize how important our work is to the organization’s future. As a consequence, our group is facing budget cuts, and no one really listens to us. What can we do to help management understand how vital we are to the company?
—Katz
 
Few improvements have ever resulted from making people understand anything. Try instead to make people feel.
 
I would suggest changing your department’s name from the “digital-strategy team” to the “digital innovation center for excellence”—or DICE. With all those buzzwords and a catchy acronym, who could cut your funding without feeling they’re harming the company?

See the original article in the Wall Street Journal here.

Ask Ariely: On Honoring Housework, BE to Business, and Laundering Linens

Jan 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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Many women don’t feel recognized for all the work they do at home. When their husbands come home late from the office to something other than total bedlam, the oblivious men often fail to provide any appreciation or recognition. Would it help if women got paid for their housework? And if so, what is the best way to set up those payments?

—Lisa

I can’t think of any context in which one partner in a family should directly pay the other. But we do need to make sure that earning inequality doesn’t turn into power inequality.

One of the best (and worst) things about money is that it is easy to measure. So each partner’s financial contributions to the household are very clear, and differences can be overemphasized.

Consider a couple in which Person A earns much more than Person B, but Person B does everything else for the household. In such a case, A’s contribution to the relationship is easily quantified (bringing home most of the bacon), whereas B’s bit (taking care of the house, raising the children, dealing with paperwork, bills and so on) can’t be measured as precisely.

If the couple focuses on what’s easy to measure, A’s contribution looks more central. So A could feel more deserving, entitled and commanding while contributing less overall.

There is no magical solution to this problem, but one good step is to deal directly with the flow of money. Start by having one joint checking account for all income and ongoing expenses. On top of that, open two separate savings accounts (one for each partner), and split all savings equally into them.

Legally speaking, this type of accounting doesn’t make any difference, but in psychological terms, it makes a key statement about equality in financial contributions. It could weaken the link between financial contribution and power and offer a more holistic view of contributions to family life.

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What can businesses learn from your academic field of behavioral economics?

—Bella

As with any other scientific endeavor, my field has reached, over time, a better understanding of its domain—human behavior. The process has been slow, but the lessons are accumulating.

We have found, for example, the principle of loss aversion: It turns out that we humans hate losing more than we enjoy gaining. Or the IKEA effect—the finding that, once we take part in making something (like IKEA furniture), we start really liking it, and we assume that other people will like our creation too. These are discoveries that businesses can use in developing their products and services.

For all that we’ve learned, however, I suspect that the most important lesson is how little we know—the lesson of humility. We understand a great deal about human behavior, but we also have a lot of gaps, assumptions and blind spots. By training, social scientists are happy to admit how little we really know and much room there is for improvement.

If businesses adopted this approach, trusting their intuitions less and relying on research more, they would get a very high return on investment. Admitting our shortcomings is an important first step.

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We host a lot of overnight guests. Should I change the sheets on the guest bed every time a new guest arrives, even if the last one only stayed with us for one night? —Debbie

I am sure that you don’t want to tell your new guests that they are using “only slightly used linens,” and I am almost sure that you don’t want to hide things from your guests—so yes, change the sheets every time.

See the original article in the Wall Street Journal here.

Ask Ariely: On Guilt-Free Gift Cards, Business Buddies, and Fading Favors

Jan 03

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,

This holiday season had me wondering: Why do people prefer to give and receive gift cards rather than cash, which you can use anywhere for anything?

—Van

Gift cards limit the way we can use money, which means that, from a strictly rational viewpoint, they are inferior to cash. But people prefer gift cards because of an irrational emotion called guilt—or, more accurately, because of our need to alleviate guilt.

When we look around us, we feel guilt over our desire for many different things: fancy chocolates, pens, expensive headsets, electronic gadgets, etc. We want these things, but the guilt caused by our wants is powerful, so it sometimes stops us.

When we get money, we’re likely to feel guilty about spending it on our more self-indulgent desires. But when we get a gift card, the guilt is much reduced and sometimes eliminated.

Interestingly, the particular level of guilt alleviation depends on the type of gift card. For example, if the card is an American Express gift card, it is basically the same thing as money, and it doesn’t ease much guilt. But if the gift card is restricted to Tiffany’s or REI, that money suddenly becomes more valuable. A dollar without guilt is worth more than a regular dollar.

And if you got any gift cards this holiday season, of any type, I suggest using them as if they were meant to be spent only in your favorite store—and enjoy them guilt-free.

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Dear Dan,

I realize that mixing friendship and business isn’t always the best idea, but I’m starting a business with a friend anyway, and I want to know the best way to mix the monetary bits of the business with the social aspects. Is there a single recipe for this?

—Clara

Going into business with people we know and love is indeed tempting. So long as the venture is going well, working with friends and family can be great: The extra trust and commitment that everyone shares can help both the business side and the social relationship.

The problem is that things frequently go awry. Then the damage done is often not just the professional downside plus the social downside; it can be the professional downside multiplied by the social downside.

So I would prepare yourselves by outsourcing any disagreements. Decide upfront that every time you disagree, even on something small, you will both go to somebody external who isn’t personally involved. Each of you will then describe your side of the argument in five minutes or less and let that person decide for you—and no matter what, you will take their advice and never mention the topic again. This way, you not only have a mechanism for resolving disagreements, but you can do so quickly, before any tension can build up and destroy either your friendship or business.

One more thing: Pick a third party whom you both dislike. Some intriguing research shows that when an arbitrator is nasty, both parties feel more camaraderie, work better together to resolve the issue and, of course, want to end the disagreement as soon as possible.

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Dear Dan,

A while back, a friend did me a favor with the understanding that I would “return the favor” later. At first, I was eager to reciprocate, but after several months, I’ve become less aggressive about offering to find a way to help her out. Do favors have a shelf life?

—Jen

Only in the minds of the people who owe them.

See the original article in the Wall Street Journal here.

Ask Ariely: On an Odorous Obstacle, Great Gift-giving, and Dealing with Dimes

Dec 20

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,

How would you handle a community college student who—bluntly put—just smells absolutely horrendous? My other students are complaining that they can’t focus in the classroom. I think that the student should be made aware of her smell so that she can try to resolve it and avoid jeopardizing her social and professional future—but I’m not sure how to broach the topic.

— Kelly 

Sharing this information isn’t going to be easy, but doing so could create many long-term benefits for the student, the community and maybe even yourself—which is why you should definitely tell her.

It might be tempting to convey the information anonymously, which would save you some awkwardness, but it isn’t in the student’s best interest. Some research shows that it is particularly nice to get an anonymous love note because the uncertainty lets us imagine that we are adored by many people. The opposite is likely to be the case with an anonymous note about a negative trait.

My advice: sit the student down and break the news to her. You could start by saying that some people are more sensitive to smell than others and that you suspect her sensitivity is below average. Next, tell her that she has an odor that is noticeable to others and add that you worry that this is making interactions more difficult for her. Finally, offer your ongoing help as she tries to figure out what works for her and what doesn’t.

One last point: A while ago, I decided that every time I see someone with something in their teeth, I would tell them about it. Making this a rule was very helpful for me because now I don’t even need to consider whether to raise this potentially embarrassing point—and 100% of the time, people have thanked me for telling them.

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Dear Dan,

What’s the best way to give a guest speaker a gift they would truly love and appreciate?

—Wilma

Not long ago, I gave some lectures to a very nice group of people. At the end of the retreat, they held an auction of all kinds of souvenirs, and I bid on a homemade blanket that I particularly liked. Later that night, I discovered, they took the blanket out of the auction after I bid on it and gave it to me as a gift.

This was particularly nice for three reasons. First, I clearly liked the blanket because I bid on it. Second, I assumed that other people also wanted it. And finally, it didn’t have a real market value. All this made it a wonderful, highly appreciated gift without a specific price tag.

If you’re willing to be a bit manipulative, you could take this approach a step further: What if you held a live auction, and when you saw something that the guest speaker was interested in, you got other people to dramatically outbid him or her (offering, say, 10 times more than the speaker would)—and, at the end of the night, gave the item in question to the speaker? This process would make clear that your guest coveted the item, as did other people, and that its value was very high. Clearly an ideal gift.

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Dear Dan,

Why will many people not stop on the street to pick up a dime but would certainly stop to pick up a dime if it fell out of their pocket? Isn’t the value of 10 cents the same in both cases?

—Baruch

These might seem like the same case, but they aren’t. When we pick up 10 cents, we add to our wealth (just a bit), but when we reclaim a dime that we dropped, we prevent a loss—and preventing a loss is much more important and valuable.

See the original article in the Wall Street Journal here.

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