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.
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?
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.
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?
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.
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?
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.