DAN ARIELY

Updates

July 7, 2010 BY danariely

On Friday July 9th at 1:30 PM EST I will have an online office hour on Duke’s Ustream channel.to discuss The Upside of Irrationality.

You can submit questions in advance or during the session by email to live@duke.edu, on the Duke University Live Ustream page on Facebook or via Twitter with the tag #dukelive.

If this will work out maybe we will do more of these…

Irrationally yours

Dan

July 5, 2010 BY danariely

I personally find fruit and vegetables to be not only healthy, but also delicious. I enjoy cooking and preparing them, and try to eat them often. Sometimes I wind up spending egregious amounts of money getting the freshest local organic produce. Still, even when I empty my wallet at the farmer’s market, some of my fruit and veggies inevitably end up wilting or rotting in the fridge, leaving a fairly unpleasant sludge. A number of things could contribute to this waste – but I’d like to point out a few simple design flaws that I think we can fix.

1) I suspect that one of the main culprits is the produce drawer in the refrigerator.  Most refrigerators have a special drawer designed to hold produce, usually located at the bottom of the fridge.  The drawer is often just barely opaque and for some reason difficult to open. Because of these “features,” when you open the fridge door, you look straight ahead, to the leftover lasagna or apple pie (and their convenient position) come to mind, leaving the carrots and nectarines hidden and forgotten in the vegetable drawer.  If the design of the produce drawer is one of the barriers for eating the fruit and vegetables we have already purchased, what can we do about it?  For one, instead of using the crisper to store fruit and vegetables, we could put them on a higher shelf so that they are more inviting when that door is opened. We’ll smile and say to ourselves: “oh, right, I now remember I have blueberries and I want to eat some of them.”

2) Another obstacle that keeps us from eating our vegetables before they’ve gone rancid is the sense of immediacy and gnawing hunger that compels us to open the fridge in the first place. We usually go to the fridge when we are already hungry, and are looking for something to pop in our mouths right away. Because there are usually a few steps between raw vegetables and ready to eat food, we shy away from them in favor of something faster and more convenient. One way to solve this would be to wash, cut or cook them in advance so that they are already prepared at the pivotal moment of hunger.

3) In addition, these perishables don’t come with any indication of an expiration date. Until we discover the point-of-no-return, it is hard to tell how far the produce are from the end of their useful lives. We know that when we buy fish, we should eat it within the next couple of days. With milk, there is a date stamped right on the container, undisputable and in plain sight. Because we are averse to losing money (even money already spent), these expiration dates compel us to make sure that we use that pound of Mahi Mahi, eat that yogurt, and finish the milk. By leaving the produce’s expiration date ambiguous, it is hard for us to plan when to eat our produce, and we often discover that we have missed the expiration date after it’s too late. If we were to make our own expiration dates and stick them on our celery sticks, we would be more likely to use them before they’ve turned into a mushy mess.

This type of waste worries me because I think that it also prevents us from future purchases of fruit and vegetables. Imagine this scenario: You buy a bag of grapes for $7.50, throw them in the crisper drawer, and forget about them. A couple weeks later, you open the crisper on a whim and are alarmed to find that the former bag of grapes has now turned into a moldy pile of muck. You feel awful, not only because you have to clean up the mess, but because you paid seven dollars and fifty cents for this. You grumpily go for the sponge and think to yourself, “Well, I’ll never do that again.”

My general point is this: There are all kinds of reasons why we eat badly, but some are more fixable than others if we only look at our behavior and undercover the nuanced forces guiding our actions. Instead of throwing the bag of grapes into the dark drawer in the bottom of the fridge, we can save that drawer for the cupcakes and instead put some grapes in a tray on the top shelf with some mixed greens and pecans, ready to grab and go. The rest of the grapes can be prewashed and stamped with a homemade expiration sticker. If we make plans to eat them within a few days and mark them as such, we are more likely to stick to our goals. This way, we can eat more fruit and veggies and avoid wasting money or creating a mess – benefits all around!

Irrationally yours

Dan

June 30, 2010 BY danariely

Sometimes comedy has a lot of reality in it — this is one of these cases

What are the effects of high prices, packaging, and fancy descriptions?  often they lead to higher evaluations and higher willingness to pay ….

June 26, 2010 BY danariely

What would you think if someone told you: Do the right thing because your life may depend on it. Or more accurately, that you better start making better decisions because it is a matter of life and death. This may sound like something an overprotective parent would tell their child) but in reality it’s the way most of us should start to think about our day to day decisions and their potential to lead to harmful habits and fatal consequences. It is hard to believe that this is true, but recently, researchers have done some interesting analysis on this topic and the results support the idea that personal decisions, and often fairly mundane ones, are a leading cause of premature death in the United States (and I suspect that similar numbers are also the reality in the rest of the developed world).

One of the most interesting analyses on the ways in which our decisions kill us is one by Ralph Keeney (Operation Research, 2008), where Ralph puts forth the claim that 44.5% of all premature deaths in the US result from personal decisions – decisions that involving among others smoking, not exercising, criminality, drug and alcohol use, and unsafe sexual behavior.  In his analysis Ralph carefully defines the nature of both the type of personal decision and what is considered premature death. For instance, dying prematurely in a car accident caused by a drunk driver is not considered premature in this framework because the decision to drive somewhere is not one that can logically be connected to the premature death. Unless, of course, the person who dies is also the drunk driver, in which case this counts as a premature death caused by bad personal decisions.  This is because the decision to drive drunk, and dying as a result, are clearly connected.  In this way you can examine a large set of cases where multiple decision paths are available (the drunk driver also has the option to take a cab, ride with a designated driver, or call a friend), and where these other decision paths are not chosen despite the fact that they won’t directly result in the same negative outcome (i.e fatality). As other types of examples, consider the decisions to smoke (when not smoking is an option), to overeat (when watching our weight is an option), or for people with long term medical conditions to skip taking insulin or asthma medication when these are important to their ongoing health.

Using the same method to examine causes of death in 1900, Keeney finds that during this time only around 10% of premature deaths were caused by personal decisions. Compared to our current 44.5% of premature deaths caused by personal decisions, it seems that on this measure of making decisions that kill ourselves we have “improved” (of course this means that we actually got much worse) dramatically over the years.  And no, this is not because we’ve become a nation of binge-drinking, murderous smokers, it’s largely because the causes of death, like tuberculosis and pneumonia (the most common causes of death in the early 20th century) are far more rare these days, and the temptation and our ability to make erroneous decisions (think about driving while texting) has increased dramatically.

What this analysis means is that instead of relying on external factors to keep us alive and healthy for longer, we can (and must) learn to rely on our decision-making skills in order to reduce the number of dumb and costly mistakes that we make.

The question then becomes how to help people become better decision-makers. Or at least better at making decisions where their health is concerned. If nearly half of premature deaths in the US can be avoided by making better decisions, it is clear to me that it would be worthwhile to spend much more time and effort to disseminate the knowledge we have gained in social science about the main ways in which people fail to make good decisions.  It is of course over-optimistic to expect that just helping people to see what mistakes they are likely to make will fix the problem, but personally I would be happy even if it only slightly reduced the number of catastrophic decisions.  The next step we need to take is to expand upon the research that examines what kind of methods encourage healthier decision-making and conduct much more research in areas that could help us limit our mistakes. For example, based on research about how people make different decisions when they are sexually aroused we might concentrate on providing comprehensive sexual education that teaches teenagers how to make decisions while in the heat of the moment.  Similarly, by understanding how people think we might be able to teach people to enjoy eating fruit and vegetables; how to make exercise part of their ongoing lifestyle; and develop effective smoking cessation programs. And it would also help to remember, in light of this, that every decision counts.

June 20, 2010 BY danariely

How are bonuses influencing performance?

Often people expect that higher bonuses will yield higher level of ability and performance — but do they?

Here is a talk I gave on this topic (see also Chapter 1 in “The Upside of Irrationality”)

June 14, 2010 BY danariely

The thing about habits is that for good and bad they require no thinking. An established habit, whether getting ready for work in the morning or having a whiskey after, is a pattern of behavior we’ve adopted—we stick to it regardless of whether it made sense when we initially adopted it, and whether it makes sense to continue with it years later.  From a human irrationality perspective this means that something we do “just once” can wind up becoming a habit and part of our activities for a longer time than we envisioned.

To get some insight into this process, consider the following experiment:  We asked a large number of people to write the last two digits of their Social Security number at the top of a page, and then asked them to translate their number into dollars (79 became $79), and to indicate if in general they’d buy various bottles of wine and computer accessories for that much money. Then we moved to the main part of the experiment and we let them actually bid on the products in an auction.  After we found the highest bidders, took their money and gave them the products we calculated the relationship between their two digits and how much they were willing to pay for these products.

Lo and behold, what we found is that people who had lower ending Social Security numbers (for example 32), ended up paying much less than people who had higher ending Social Security numbers (for example 79).  This is basically the power of our first decisions: if people first consider a low price decision (would I pay $32 for this bottle of 1998 Cote du Rhone?) they end up only willing to pay a low amount for it, but if they first consider a high price decision (would I pay $79 for this bottle of 1998 Cote du Rhone?) they end up willing to pay a lot more.

So this is the double-edged sword of habits, they can save us time, energy and unpleasant thinking, but on the other hand, it’s all too easy to start down an unwholesome path. Now onto “ The 7 Habits Of Highly Ineffective People”…

1) Procrastination. Joys untold attend this particular bad habit. And it’s one people indulge in all the time, exercise, projects at work, calling the family, doing paperwork, and so on. Each time we face a decision between completing a slightly annoying task now and putting it off for later, battle for self-control ensues. If we surrender, procrastination wins.

There’s nothing inherently wrong with delaying unpleasant tasks at work from time to time in order to watch a (crucial) football game at the pub with friends.  But, the problem is that as we get close to our deadline we start thinking differently about the whole decision.  As we stay up all night to finish a task on time we start wondering what were we thinking when we succumbed to the temptation of the football game, and why didn’t we start on the task a week earlier.  Moreover, as with all habits one procrastination leads to another and soon we get used to watching deadlines as they zoom by.

2) The planning fallacy. This is more or less what it sounds like; it’s our tendency to vastly underestimate the amount of time we’ll require to complete a task. This hardly needs illustration, but for the sake of clarity, recall the last time you delegated time to a complex task. Cleaning your flat from top to bottom (couldn’t take more than two hours right? Wrong.); finishing the paper or project at hand (who knew the people in department X could be so impossibly slow?). The problem is that even if we try to plan for delays, we can’t imagine them all. What if the person you’re working out a deal with gets hospitalized? What if an important document gets deleted or lost? There are infinite possible delays (procrastination of course being one of them), and because there are so many, we end up not taking them into account.

3) Texting while driving. Let me start by saying that in my class of 200 Master’s students, 197 admitted not only to doing this regularly, but also to having made driving mistakes while doing so. Also, one of the three abstainers in the class was physically blind, so we should not really count him as a saint, and who knows maybe the other two were liars. Texting while driving is clearly very stupid.  If we were not intimately familiar with our own Texting behavior, we might think that it’s insane to think that anyone would knowingly increase their chances of dying 10 fold rather than waiting a few minutes to check email, but this is the reality.  Moreover, the issue here is not just Texting, it is much more general than this particular bad habit.  The basic issue has to do with succumbing to short-term desires and foregoing long-term benefits.  Across many areas in our life, when temptation strikes we very often succumb to it (think about your commitment to always wearing a condom when you are not aroused and when you are).  And we do this over and over and over.

4) Checking email too much. If it seems that there’s too much about email on this list, I assure you, there isn’t. Checking email is addictive in the same way gambling is. You see, years back the famous psychologist B.F. Skinner discovered that rats would work much harder if the rewards were unpredictable (rather than a treat every 5 times they pressed a bar, one would come after 4, then 13, etc). This is the same as email, most of it is junk, but every so often, it’s fantastic: an email from the woman you’ve been chasing for instance. So we distract ourselves from work by constantly checking and checking and waiting to hit the email jackpot. And to be perfectly honest, I’ve checked my email at least 30 times since starting writing this article.

5) Relativity in salary. The fatter a sea lion is, the more sea lionesses he has in his harem. He doesn’t need to be immense, just slightly bigger than the others (too fat and he won’t make it out of the water). As it turns out, it’s the same for salaries; we don’t figure out how much we need to be satisfied, we just want to make more than the people around us. More than our co-workers, more than our neighbors, and more than our wife’s sister’s husband.  The first sad thing about our desire to compare is that our happiness depends less on us, and more on the people around us.  The second sad thing is that we often make decisions that make it harder for us to be happy with our comparisons: Would you prefer to get a 50,000 pound salary where salaries range from 40,000-50,000 or a 55,000 pound salary where they’re between 55,000-65,000? If you’re like almost everyone, you’d realize that you would be happier with the 50,000 pound salary, but you would pick the 55,000.

6) Overoptimism. Everyone, except for the very depressed, overestimates their chances when it comes to good things like getting a raise, not getting a divorce, parking illegally without getting a ticket. It’s natural—no one gets married thinking “I am so going to be divorced in 4 years”, and yet a large number of people end up getting divorced.  Like other bad habits, overoptimism is not all bad.  It helps us take risks like opening a business (even though the vast majority fail) or working to develop new medicines (which take many years and usually don’t pan out). Ironically overoptimism often tends to work out well for society (new restaurants, cures for disease) while endangering the individuals who take them (financial ruin, stress-induced insanity).  Sadly we are often overoptimistic – my most recent example of this was just a few hours ago when I sat down to write an essay entitled: “The 7 Habits Of Highly Ineffective People.”  If I only didn’t go out last night…..

Irrationally yours

Dan

June 12, 2010 BY danariely

From the NYT Sunday Book Review:

STUFF YOUR BRAIN SAYS: “The Upside of Irrationality,” Dan Ariely’s follow-up to his 2008 best seller “Predictably Irrational,” hits the hardcover list at No. 12 this week. Ariely, a professor at Duke, is a leading researcher in behavioral economics. One of the field’s concerns is the way we tend to misjudge future pleasure — for example, by imagining that a new Ferrari will make us feel much happier than it actually does. But making The New York Times best-seller list, it turns out, really does feel good. “When my first book reached the list, I called my wife to tell her and I was just not able to talk from excitement,” Ariely said by telephone. “This was very interesting to me because I was very happy to hear the news, but somehow sharing it with someone I love intensified it to an extent that was just too much for me, and I was just able to say a word here and there and almost cry in between.” The differences in our experience of emotions when we are alone versus with others, he added, might be a fruitful avenue for future research.

So — how did I feel this time?  About the same as the first time….

Irrationally yours

Dan

June 10, 2010 BY danariely

A few months ago, I had the idea to create an iPhone app that would give me (us) compliments. It turns out that as humans, not only are we sensitive to rude remarks from strangers, but we are also very excited when we get kind words, even if they are just random; they just make us feel much better, even if these strangers don’t know us very well.

At a boy! is a completely free app, and you can find it here.

HOW TO USE: when you open the app you get a compliment and if you want a new one simply tap the screen.  To get a new compliment, simply tap the screen. I do want to encourage you to use the thumbs up/down to let me know which compliments make you feel the best — this way we will be able to figure out what kinds of compliments work better and worse.

Most important, users of At a boy! can submit their own compliments for other users to read: just tap the pen icon and type one in.

Here, for example, is a compliment that a French-speaking user of our app submitted (if you can please submit compliments also in English):

Doesn’t that make you feel good to read? We’ve had a few dozen great compliments already submitted, and we could always use more!

By the way, did I tell you that you look very nice today and that you are very clever?

Irrationally yours

Dan

June 7, 2010 BY danariely

The New York Times Sunday Book Review, just published a review of the Upside of Irrationality.

In general I think that the review is very good, but there is one point that made me wonder (and of course I focused on the one point that was less positive in the review).

One of the main differences between “The Upside” and PI is that this time around I wrote in a much more personal way about some of my experiences and how they got me thinking differently about different aspects of life (dating, adaptation, pain etc). It was very hard to write this way, and while writing I kept on wondering if this is a good approach to write or not.  The reviewer from the NYT reaction was that I was overly personal in my descriptions, and maybe she was correct…

Either way it would be nice to find out the reaction to this approach — is writing in a more personal way, useful or distracting?  I would love to get any feedback on this.

Thanks

Irrationally yours

Dan


June 5, 2010 BY danariely

There is a certain perverse pleasure in contemplating the perfect crime.

You can apply your ingenuity to the hypothetical issues of choosing a target, evading surveillance and law enforcement, dealing with contingencies and covering your tracks afterward. You can prove to yourself what an accomplished criminal mastermind you would be, if you so chose.

The perfect crime usually takes the form of a bank robbery in which the criminals cleverly bypass all security systems using neat gadgets, rappelling wires and knowledge they’ve acquired over several weeks of casing the joint. This seems to be an ideal crime because we can applaud the criminals’ cunning, intelligence and resourcefulness.

But it’s not quite perfect. After all, contingencies by definition depend on chance, and therefore can’t ever be perfectly thought out (and in all good bank-robber movies, the thieves either almost get caught or do).  Even if the chances of being caught are close to zero, do we really want to call this a perfect crime? The authorities are likely to take it very seriously, and respond accordingly with harsh punishment. In this light, the 0.001 percent chance of getting caught might not seem like a lot, but if you take into account the severity of punishment, such crimes suddenly seem much less perfect.

In my mind, the perfect crime is one that not only yields more money, but is one where, if by some small chance you did get caught, no one would care, and the punishment would be negligible.

So, with this new knowledge how would you go about it?

First, the crime would need to be obscure and confusing, making it difficult to detect. Breaking a window and stealing jewelry is too straightforward. Second, the crime should involve many people engaging in the same type of crime so that no one can point a finger at you. This is why looting, though easy to detect, is much more difficult to get a handle on than a single robbery. Third, your crime will need to fall under the shady umbrella of plausible deniability so that if you do get caught, you can always say you didn’t know it was wrong in the first place. With this kind of defense, even if the public cares, the legal system may let you off easy. Moreover, plausible deniability allows you to apologize in the aftermath and ask forgiveness for your “mistake.”

If you really want to go all out, do something you can spin in a positive light, and maybe even create an ideology around it. This way you can then explain how you’re actually on the side of progress. Say, for instance, you’re “providing liquidity” and “lubricating the market” and thereby helping the economy – even if it happens to be by taking people’s money. You can also resort to opaque and promising-sounding language to make your case; you’re “restoring equilibrium,” “eliminating arbitrage” and creating “opportunity” and “efficiency” across the board.

Basically, just bottle snake oil and tell them it will cure, rather than cause, blindness.

Something to avoid, on the other hand, is anything involving an identifiable victim with whom people can sympathize and feel sorry for. Don’t rob one little old lady blind, or any one individual for that matter. It’s part of human nature that we care so much about blue-collar crime, even though the average burglary only costs about $1,300 (according to 2004 FBI crime reports), of which the criminal only nets a few hundred. Crimes like burglaries are the least ideal crime: they’re simple, detectable, perpetrated by a single or just a few people. They create an obvious victim and can’t be cloaked in rhetoric. Instead, what you should aim for is to steal a little bit of money from as many people as possible—little, old or otherwise — it doesn’t matter, as long as you don’t reverse the fortune of any one individual. After all, when lots of individuals suffer just a bit, people won’t mind as much.

So, what is the ideal crime?  Which activity is difficult to detect, involves many people, has plausible deniability, can be supported by an ideology and affects many people just a bit?  Yes, I think you know the answer, and it does involve banks…

Seriously, what we have here is a problem with our priorities. We have tremendous regulations for what is legal and illegal in the domain of possessions and blue-collar crime. But, what about regulations in banking?  It is not that I really think that bankers plan and plot crimes for a living (I don’t), but I do think they are continuously faced with tremendous conflicts of interests, and as a consequence they see reality in a way that fits their own wallets and not their clients.  The recent turmoil in the market is just a symptom of this conflict of interest problem, and unless we remove conflicts of interests from the banking system, we are going to be part of a long stream of perfect crimes.

This blog post first appeared on a website for a new PBS show called Need To Know