I had the privilege of interviewing the wonderful Dan Ariely in person last Wednesday. I had interviewed Dan three years ago over Skype and shared it here and the erstwhile “Real Leaders Project.” On an inspired day in January, I’d reached out to Dan if he’d be up for another Skype interview. It turned out he had planned a trip to Chicago in May and was planning to visit Kellogg. Voilà! We locked 2pm-3pm on Wednesday, May 25th.
Dan shared a few very personal anecdotes in the interview and requested us to not share the video in public. So, while I don’t have the video, I have my notes from the talk –
On the reproducibility crisis which is threatening to question the validity of many social science findings. As consumers of research, keep healthy skepticism. However, also dig deeper to understand what principles underlie the results being presented and whether they can be replicated in different environments.
For example, he conducted a study in a slum in Kenya testing various techniques to help people save. This included a variety of reminders, incentives and the like. The winner was a large fake gold coin which the participants placed in their hut and added a scratch mark every week they met their savings target. This large coin was a daily reminder to save and the principle here was to have frequent reminders around them to save. It worked great. But, how much of this would be replicable in a city? And, how many items in our home remind us to save?
Life is complex. So, when we go into a new environment, we need to understand the context and figure out which principles would work in that environment.
On how to think about the vast amount of social science research. One of the mistakes we make is hyperbolic discounting – over weighting the present. As we create more technology, we seem to find more ways to kill ourselves. Smoking, texting and driving, etc. The big question is how can we help people eat better, exercise more, sleep right, etc. We haven’t made progress on these. Instead, we’ve made better donuts and made Facebook more addictive.
When we seek to understand human behavior, a process that helps is to analyze people’s micro decisions in a day to look for patterns instead of trying to understand overall goals. Everyone wants to be healthier. But, what are the tiny decisions they make in a day that goes against that goal?
On applications of his work. Particularly exciting when government does things like – making people sign at the start of the tax form versus the end (done in South America).
There are four factors that waste human capacity – health, time, money and hate. If we can do things to improve these four, it’ll be huge progress.
On political climate in the world. I love the definition of a just society by John Rawls – “If you knew everything about it, you’d be willing to join in a random place.” It is a beautiful definition.
In an experiment on ideal distribution of wealth, we found that people all around the world want a reasonably even health distribution. They just don’t know that the bottom 40% of people in the United States only have 0.3% of the wealth.
Much of the objective in politics is to get people to not think. So, we have slogans and ideology instead of thinking about where we are and what we want to be. What could we do to make sure people think once every 4 years? It is one area where we haven’t improved decision making at all.
On biases that get in the way of us being good leaders. A behavior that is hard to get over is to develop the courage to express your true opinion in a world that values political correctness. How can we as leaders encourage people who will disagree with us?
The academic process is pretty solid here – to get tenure, you need people from other universities to write letters. So, you can have very open discussions. While it is not possible to replicate this in corporates, this is something we need to be very mindful of.
Embracing failure. Experiments teach us humility. Understanding how often you are wrong is incredibly helpful. Doubting our intuition, keeping an open mind and experimenting is critical. It is shocking how many companies make decisions based on intuition. Intuit encourages “magnificent failure” with a prize of $1M every year and provides the creator 6 months off to test the ideas. Failing in a magnificent way means you tried, failed and learnt.
On ethics. I had an offer to speak to the management of a tobacco company for a large fee. So, I called the American Heart Association and asked – should I not go or should I donate the fees to you? They asked me to go. But, I decided not to because I don’t think the person I spoke to grasped the externalities of that decisions. Ethics are expensive. I think a lot about my own conflicts of interest. There is no easy answer.
On decisions. I think of 3 categories of decisions. Little decisions (e.g. buying a coffee or donut) – these I don’t pay attention to. Big decisions are those which we can do better at with a bit of effort. Then, there are habits – this, I do think about. If I set up a few good habits, then there can be huge impact in my life.
On heroes. Joep Lange, who was killed in the Malaysian Airlines flight that was shot down, single handedly worked to reduce AIDS in Africa. This required a rebellious nature, true dedication and single mindedness.
On how research has affected him as a parent. The environment is changing – not necessarily with your long term benefit in mind. Acting well is going to get harder with more interruptions from smartphones and other devices. So, we need to be aware of this.
As far as money goes, we give kids allowances and have them split into 3 buckets – for them, for people they know and for people they don’t know. Researcher Mike Norton has shown that people who aren’t happy with money are those who haven’t figured out how to give. In an experiment, people were given Starbucks cards and asked to use it on themselves or for other people. The people who bought coffee for others were much happier.
On one piece of advice. Take more chances. We are privileged to live long. Think of life as an opportunity for continuous learning. Education is never over. Keep on thinking of life as what we are going to learn and get better.
On an idea that inspires you that you’d like to share with us. A problem I am thinking about – how can we make side effects in medicine feel pleasurable? Cyclists enjoy the pain from cycling. If they don’t feel the pain, they don’t feel like they have done their job. We call this benign masochism. 🙂 Can we frame side effects as less negative? Could we make patients feel good about them? Could we increase adherence?