Book Outlines - A Beginner's Guide to Irrational Behavior by Dan Ariely

1.1 Visual and Decision Illusions

Rip off bandages: slow vs fast?
Nurses were convinced they were helping Dan with pain, but they were wrong, didn't know it, and were sure they were right.
(10:14) foundation of irrationality: we think we know the answer, but we are wrong
Visual illustrations are a metaphor for human thinking
(10:30) tower of pisa
(11:20) cube
(12:39) we rely on contextual information to make all sorts of judgments and decisions
(13:00) group of people holding iPads
(17:00) change blindness
(18:00) visual illusions are metaphor for human thinking
brain interprets information by incorporating our expectations into our perceptions
If we have predictable, systematic mistakes in vision, then what about decisions about money, health care, etc?

1.2 defaults

effective organ donation rates by country because of default policies
choice architecture
create stories to justify actions
branded or generic drugs
xxxxxxxxxxxx??
jams
if wanting to make employee not save for retirement

1.3 Do We Know Our Preferences?

Experiment
not 10 reasons to buy BMW
just before teacher evaluations Dan asks students to list 15 ways to improve, they get stuck, and evaluations improve

1.4 choice sets and relativity

how often do you floss your teeth
financial advisor asks to think about retirement
a momentary mindset can have a long-term effect
decoy effect aka asymmetric domminance
economist.com subscriptions
it is hard to make evaluations
decisions are influenced by choice sets
Darwin Economy (book), Robert Frank
Study of physical attraction

1.5 long-effects of decisions

how should we value the price of coffee? If pleasure is more than cost, buy. Otherwise, not.
self-herding=tendency to follow the same decisions we have made in the past
scenario: A person sees two restaurants with zero people, so he chooses one. The next person sees one restaurant with zero and another with one person, so he follows the one. Etc.
scenario: 15 years ago used to paying $0.40 for coffee at Dunkin Donuts. By chance walk into Starbucks. Although shocked at price, too tired to walk to Dunkin, so pay $2.50. The next day walk by, remember action (not emotion), and do it again. I did it yesterday, and I make great decisions, so it must have been good.
“We remember our actions far better than our transient donuts.”
Price anchor experiment with SSN and products
People did not think the SSN experienced their prices
relative price comparisons of products in the same category remained fix: people bid more for expensive wine than cheap wine, more for keyboard than mouse
the first decision becomes an anchor that influences future decisions
Tom Sawyer: can make something negative into positive
some people pay to sleep in jail like a vacation
some people pay to pretend to be farmer, squash wine
experiment: poetry, prices were coherent after the good/bad decision
- why doesn't $0.40 Dunkin Donuts influence Starbucks? SB differniated its brand, so they seem like separate categories: do not sell donuts, single-bean coffee, sold french press,
People compare within categories. For example, don't say “for the difference in price between these wines, I could buy $4 of milk?”
People don't compare entrees do desserts, etc
After years of making differentiation, SB can eventually sell muffins and donuts
Conrad Lawrence, duckling start following first figure [imprinting]
first iPhone initially was $600, quickly lowered to $400, so relative prices can be to others in market or used to be in market [the $600 iPhone no longer available]
iPad price follows iPhone
other tables follow iPad
initial decisions are very important
production introductions are important

1.6 learning from our mistakes

“What a piece of work is man. How noble is reason.” - Shakespeare
three main lessons
FDA requires rigorous experimentation before drug can be put on market
“we should test government and business policies before implementing them”
memento mori: remember we are mortal (limited)
computer hackers break down procedures into discrete, exact steps. They figure out which points are best to intervene
Dan's old nurse didn't want to pull off bandages slowly because it would be uncomforable for her
doubt your intuitions
experiment

week 1: Special guest: Gavan Fitzsimons: Unconscious consumer

backlash/psychological reactance: when freedom is restricted, fit hard to get it back
brief brand exposure
13:00 should be paranoid about people changing behavior?
He thinks pepsi exposure
(14:20) Be strategic about brands and consumption objects you surround yourself with
for swimmer who wants to swim faster, wear same parka as Michael Phelps. At first, it will feel silly.

Eli Finkel: the delusion of romantic self-insight

assumption of online dating: discern from profiles who is romantically compatible
this sounds good (if true)
if not true, harmful
are there sex differences in desired?

office hours 1

1:23 Rationality & Irrationality
26:50 If you were to design a wellness program, would you fine people for engaging in unhealthy behavior or pay them for being healthy?
37:24 In terms of a nonprofit asking for charitable donations, would it be more effective to see the smiling faces of those who have received aid or the suffering faces of those who need aid?

extra video: what is behavorial economics?

http://vimeo.com/63062967
Random words, prank
plurastic igorance

2.1 opportunity cost

opportunity cost is harder to think of than money
so people use shortcuts: method of payment, relativity
we often use money, but are we experts?
What would money look without money?
We should think of money in terms of opportunity cost
asked people at car dealership what they were going to give up to buy a new car.
Imagine
Tradeoffs are obscured in our complicated economy
When problems are complex, we take shortcuts.
Experiment:
What would you do for a $3 capuccino instead that you wouldn't do for $3 cash?
We place a higher value on specific items that the monetary value of those items

2.2 relativity

we often think of money in relative rather than in absolute terms
examples
Would you rather make $90K in company where people make $90K to $100k (you are the lowest) or paid $85K where people make $65K to $85K (you are a the top, but make less)?Most people choose first but realize they would be happier in second
Diminishing returns: $ amount vs psychology intensity

2.3 the pain of paying

pain: seeing money disappeared at same time as consumption
“pain of paying” magnified when our feelings about spending money are coupled with consumption
Paying $0.50 per bite: save money, but lose fun
Going on vacation: paying ahead of time or paying when you get off the boat. Financially better is latter but less fun.
“pain of paying” adds moral tax to consumption
saliency
Timing and method of payment affections consumption
When would you like to increase or decrease pain?
To increase pain
to decrease pain to focus attention on enjoyment
what are characteristics of ideal gift?
pain of paying involves
chips in casino
pre-paid money in certain category (e.g., gift card) is easy to spend
America Online used to charge by hour

2.4 mental accounting

in companies money is assigned to departments is not fungible (each department cannot give to other)
(https://en.wikipedia.org/wiki/Fungibility Fungibility is the property of a good or a commodity whose individual units are capable of mutual substitution, such as crude oil, shares in a company, bonds, precious metals, or currencies.)
we assign money to categories
example of losing either $100 or $100 opera ticket
assigning money to categories controls hows we feels
unassigned money feels differently
what happens when you get money back? Gift certificate or return policy
paid $5000 to give workship either 6 months in advance or when you arrive. Easier to spend in second case because connected to trip. In first case part of general wealth.
Saving (low interest checking account) vs spending (high interest loans)
mistake: money is fungible but people don't treat it that way
however, “good strategy given our inability”
can be adaptive
two approaches for helping people think about money

2.5 fairness and reciprocity

locksmith used to take a long time and had to break lock, and people were happy to pay and give tip
now he is faster, doesn't break lock, so he charges less, and now people argue with him, no more tips
it's easy to pay for something that requires conspicuous effort, but harder to pay for an expert who performs job effortlessly
experiment: image how much you would pay to recover X days of data from hard drive. If technician worked longer, people were willing to pay more
Dan: “we are willing to pay for incompetence”
fairness is about marginal cost instead of fixed cost
examples of high fixed cost and low marginal cost: ATM, New York Times, prescription drugs
Plan to charge for Coke based on external temperature because joy from coke goes up with temperature. People upset because it wasn't costing Coke more.
Also, electricity costs more to cool Coke.
We are willing to pay more when we see the costs involved.
Airlines call them “taxes” instead of “price increases” (though different airlines have different taxes for same route)
Purchasing decisions should be based on weighing pleasure against price, but we have trouble calculating these tradeoffs
People are willing to pay more for same beer from hotel than from grocery store
Because determining value is so difficult we use shortcuts, like assessing the level of effort required to produce something

2.6 loss aversion and the endowment effect

happy when we gain money but suffer when we lose
prospect theory
loss aversion: asymmetry around a neutral point where losses are perceived 2.5 more powerful than gains
loses not around zero but where you are
imagine salary $50K and the reduction
Imagine getting commission for selling TVs. Instead, pre-pay all commission for year and each one you don't do then they take away. People oversell with prepay condition.
Comp any with retirement account, matching up to 10%, if giving only 5% then leaving money on the table, how to see it
Endowment effect: we adjust to level of ownership and it becomes baseline
Mug and candy experiment: few people willing to switch
Duke baseball ticket, distributed by lottery, ticket owners willing to sell for $200, buyers willing to pay $100. Reasons very different. Ticket owners mentioned expected experiences. Buyers thought about money.
When we own something,we focus on what would give up rather than what we would gain.
$30 money back guarantee: ownership makes it hard to give up

2.7 market and social norm

imagine telling date you spent $125 on date when expecting a kiss
imagine doing to dinner at Dan's house, willing to spend $40 on wine, paying $30 in cash to Dan for wine
Imagine being willing to help someone for free (change a tire)? How about for $3? Now many people would say no
we live in continuum between market norms and social norms
once financial incentives are added, things can be made worse
(5:16) graph: willingness to work as a function of payment
what about gifts?
Gifts are in the social domain
money is economically efficient gift
gift hides the money
continuum: gift, gift certificates, gift registry, money
inverse relationship between inefficiency and social value
gifts in the workplace move relationship towards the social domain and build social capital
social relationships create a greater sense of reciprocity
social relationships are less precise (bean counting)
in day care center sometimes parents are late
imagine two credit cards, one social relationship, one just business, both paid late, both charge fine, ask to say no, get mad at social norm because no forgiveness
in economics, complete contracts (can specify) vs incomplete
detailed job description for janitor in hospital, patient drops in front of him, would he help
Woman put beauty for rich man offer on Craigslist, put relationship under market norms

2.8 the price of free

chocolate 25cent vs 1, 24 vs 0
free colonoscopy
also works for parts of product
way to split bill with friends

2.9 micropayments

micro-pricing breaks up cost of purchase into smaller components
paying penny 100 times equals paying $1.00 once?
Experiment,
who everything in iTunes just two prices? Decide just “yes” or “no” ---simpler
keeping prices equal simplifies the decision making process, making us more likely to buy
apple app store waits to combine receipt to reduce pain of paying
consolidating multiple purchases into one invoice reduces the pain of paying, also reduces credit card fee
gift certificates and prepayment options reduce micropayments and therefore reduce pain of paying
Dan: bad idea to include free in app store
conclusion

Special Guest: Michael Norton

Money, time, happiness: giving and getting
important but we don't know how to make ourselves happy
(1:30) we overestimate happiness from money, diminishing returns, yet people keep trying to make more money
(1:40) money makes people selfish, “what can I do for myself”
Is there a way to increase happiness of marginal income by having people spend money on others instead of themselves?
Experiment #1
(5:20) Replicated study in poorer countries
like money, time is a resource that people think they should spend on themselves
people thinks they do not have enough (“time famine”), so they spend time on themselves
Experiment #2
giving away {time, money} signals we have surplus, which seems counter-intuitive

Special guest: Kathleen Vohs: Sexual Economics: A model of heteresexual behavoir

women have or own sex
men are willing to trade resources
men treat female sexuality as if it has value and is precious
male sexuality has no value or worth
money, voting rights, safety, affection, children, lessening of harsh punishment
women try to get resources before giving
men try to give as few resources
sex broadly: being near a women, talking about it, dating, flirting
men believe it is appropriate to have sex on half as many dates
men's not correlated to behavior
women's opinions were correlated with behavior
principle of least interest: party interested in outcome the least has the most power
imblance of men and women in local environment
in environment with many more men, skirt lengths were longer
converse as well
disappointed expectations of non-recipriocated resource exchange
experiment #1
experiment #2

3.1 simple model of rational crime

in shredding experiment, many/most people cheat a little bit vs a few bad apples
Gary Becker 1992 wanted to park
no morality in rational model
in shredding experiment varied payment $0.10 to $10.00. Result is cheating is independent
getting caught
experiment: told people others solved X to reduce feeling of being caught
If not for reward or risk of getting caught, so are people moral (Frued)? No, because people still cheat a little bit

3.2 shrinking and expanding the fudge factor

balance of feeling good about self vs benefit of cheating
the fudge factor is the amount of cheating/dishonesty that does not hurt self image
experiment
even self-declared Atheists swearing on Bible
reminds people about their own morality
repeated with honor code instead of Ten Commandments
Princeton has strong honor code, weak long lesson on honesty, song, etc.
bad news: morality training is not sticky
good news: reminders effective near point of decision
honor code effective only at beginning, not at end
Dan suggested to IRS
Insurance company
how to get people to cheat more?
Fridge experiment
Matrix test: declaration of “solved X problems” for money vs tokens
moving to cashless society, stocks, investments, so disturbing finding
experiment #2 to increase cheating: examples of cheating
What about personality traits?
Are creative people better at rationalizing (tell better stories)?
Creative people cheated more
Creativity enhancing exercises, increased cheating slightly
only 12 people cheated a lost costing $15, while $36K lost to 18K people who cheated a little
think about rules that help people

submit office hours 4/13/2013: The reading assignments seem too good to be true: all the experiments verify the hypotheses. Hypothetically if your experiment were to fail would you omit it from a paper (say, 10-20% of the time?--joking), not publish the paper, or publish the failed experiment?

pp3.3 conflicts of interest

COA is fundamental issue in dishonesty
wouldn't like judge who gets paid 5% of verdict, about what about mechanics, lawyers, government, financial advisors
sunshine policy: disclose conflict of interest
experiment
doctor advised Dan to get black tots tatoos on burned side of face to look like stubble

3.4 Cheating Over Time and Across Cultures (10:42)

count dots left or right
paid 10x for right answer
change from cheating a little to a lot
at some point cheat too much, can't feel good about self
mess up diet for day and say “I'll start diet on Monday”
what would it take to reset fudge factor and stop cheating
Catholic confession
he found no difference all countries he tried
culture context does matter for bribery, infidelity, etc, but his experiments were non-cultural
in other countries he adjusts payment, four questions answered = 1 glasss of beer
Washington DC, congressional staffers
bankers cheated more

Special Guest: Peter Ubel: Medical Decision Making Gone Wild

Story about chemotherapy and luekemia
medical decisions are unique, patients have not made these decisions before
People can adapt: e.g., dialysis patients are not less happy
high stakes: life of death decisions
to people they feel like they have to do something, even if it seems to defy logic
doctors overstimate chance of survival
10:00 (skip video)

Nina Mazar: Do Green Products Make us better people: how good deads can create a license misbehave and be more selfish

moral pendulum
after moral boost (good deed), will feel good, earn moral credit that licenses selfishness
also, visa versa: after doing bad, more willing do good
if more green consumption and green consumption is moralized, then will people do more bad?
Made two online stores that were the same except one was green, and randomly assigned students to stores
random half of students exposed, and other students made purchasing decisions
(5:40) then in ostensibility unrelated task, students participated in variation of dictator game
student decides how much of $6 to give to other person in other room
dictator game measures altruism because there is no social consequence
students who bought green products shared much less than students in conventional store
students who browsed green products did not show licensing effect, actually opposite: these students shared more money, so being exposed (priming) activated higher norms
Experiment #2
does not mean green people are bad
but does mean engaging in acts that make a person feel moraly superior, more likely to transgress
if we do not moralize green consumption, we would not expect licensing effect

4.1 extrinsic versus intrinsic motivation

we think more money is key to labor and motivation
rat in maze thinks about reward, cheese
mountain climbing is hard, painful,cold
besides money, other motivations include pride, accomplishment, competition, achievement, overcoming
people probably wouldn't climb a mountain knowing they would forget or knowing they would get stuck at 90%
sometimes money gives the sense of competition
same story as book: guy worked hard on presentation that was discarded at last moment, got paid and acknowledged, felt sad
Devra worked as editor, worked hard on book, publishing house decided not to publish, felt sad
we are motivated to do things that are meaningful
built Bionicles: meaningful vs Sisphyus condition
Sisphyus : each Bionicole was destroyed as soon as it was built
People built more in meaningful condition
People predicted meaningful condition would have more output, as it did, but they underestimated the difference (one vs four Bionicoles).
Does loving Legos predict building? This was true in meaningful but not in Sisyphic condition, which choked joy.

4.2 meaning

Dan presented to 200 engineers at software company
Employees worked hard for two years on visionary, revolutionary, important project
A week earlier the CEO canceled the project
Employees were very demotivated, worked less hard
CEO may think the rats (employees) just need reward (money), not meaning
What if project were canceled in a better way? Presentation, build prototype, use tech in other projects
These options would take more money

4.3 acknowledgement

finding pairs of letters, first $0.055, decreasing payment for each solution by $0.05
three conditions: acknowledge work, ignore work, shred work
results in ignore was similar to shred
it's relatively easy to make people feel good , but ignoring people can be demotivating

4.4 IKEA effect

story from book about first baking mixes didn't sell until an ingredient was removed
egg theory: if you add water and bake, you can't take credit for it, so what if manufacturer took out egg and milk?
Strange: increasing effort increases sales
People who built origami valued their creations more than third parties
Creators thought everyone would love their creations
(7:55) hypothetically selling kids
kids: high effort, no instructions, our evaluation changes, it's hard to imagine others see the same kids differently
customization is more than about individual preferences, it also increases liking
too much effort can have negative consequences
people can give up while customizing too much

4.5 Not invented here bias

IKEA effect also applies to ideas
Experiment: how to deal with global warming
Thomas Edison vs Nikola Tesla
Edison invented DC and pushed for world adoption
Tesla worked for Edison
Tesla argued DC had limitations and invented AC in Edison's lab
Edison hated AC
toothbrush theory: we all need one, want it, but no one wants to use someone else's toothbrush
Benefit of NIH bias is working harder
Problem of NIH is it is harder to consider other's ideas

4.6 cognitive dissonance

Zappos, owned by Amazon, ships shoes made by other companies
Zappos has interesting hiring process, train them for a few days, pay them to not take the job, this gets rid of people who are not excited to do customer service for $12/hour and harm customers
cognitive dissonance: the tension between belief and behavior (Leon Festinger)
experiment: do boring task (screw boards) and pay either $1 or more, people who were paid well did not recommend it, paid who were paid $1 liked it and recommended it because they could not justify it
when we work harder for something, we value it more
example: playing hard to get
“I didn't take the $2000, so I must really love Zappos”

4.7 monetary stress and performance

the assumption is people want to rest (drink mojitos on the beach), so we need to pay them to motivate them
assumption: work is aversive, so people work only to get money
however, people get satisfaction in labor
even rats enjoy work for its own sake
contrafreeloading: rats give up some free food to get food that takes effort
cat is exception to contrafreeloading
theory of bonus: increases motivation
how does performance increase with incentives?
Yerkes-Dodson effect
Dan tested three sizes of bonus in India.
is bonus prepay or postpay? Some people are used to getting it and start spending it before getting it
do mechanical tasks differ from mental tasks?
Experiment 2
“state of flow” drives highest performance

4.8 social stress and performance

solve anagrams in front of people
“wanting to” work harder can decrease performance
people who played golf next to Tiger Woods played worse, apparently due to performance stress
bankers think Dan's experiments don't apply because they don't get stressed
bankers did not agree to test
so instead he tested basketball “clutch” players (who played well under stress)

4.9 bonuses, labor and motivation

basketball is more selective than bankers
basketball is more mechanical
bonus at big bank: why not hug, beer, or dinner? How much less you could pay and still motivate ?
A guy received borrow NY apartment for a year, it was very useful for him and his wife to give birth in the city, it changed his mind about his work, not just money
Adam Smith vs Karl Marx, efficiency vs meaning
Adam Smith: work should be specialized
Karl Marx: when work has meaning, people are connected to output
Dan thinks in preindustrial revolution, Adam Smith was right because there was a large benefit in efficiency and little difference in meaning
Dan thinks in post-industrial revolution, Karl Marx was right

5.1 difficulty with self-control

self control is the problem between now and later
While in hospital, Dan got blood transfusion with liver disease
Much later he found out it was hepatitis C and Interferon was available as a trial
Three times a week there was unpleasant medication
Dan's choice: for sure suffer now from medicine or *maybe* in the future do not get liver cirrhosis
Similar examples: over-eating, under-exercising, procrastination, texting while driving, “unsafe” sex, Adam and Eve
We know it's bad and keep doing it
present focus bias: the tendency to give more weight to our current environment or state
imagine choice: half box chocolates now or full in one week, and box is in front of you
now imagine both pushed ahead +1 year
people imagine in the future things will be better (exercise more, not procrastinate, etc)
Dan's liver disease was better, and he was the only patient in trial who regularly took the medicine
Dan's trick to get medicine was to watch movies in ritual
reward substitution: using an alternate reward that is immediate and therefore more motivating
global warming maximizes human apathy
how to motivate?
Dan thinks Toyota Prius did better than Honda hybrid because Prius looked different and sold an appearance, social rewards, ego boost
Dan asked friends what else they did for environment (Hybrid cars and other), and there was no difference in other behaviors (e.g., light bulb)
Reward substitution can get us to act like we care about the world when we really care about our image

5.2 reward substitution

Coumadin: anti-stroke medication, reduces chance of second stroke from 24% to 4%,
Generally low side effects, but compliance is low
Reward substitution: need to measure and be able to reward or punish
Internet-enabled pillbox registers online and notifies others
Doesn't measure taking (only opening)
To encourage drug compliance:
$3 a day to take medicine on time does not help
$1000 would work but too expensive
how to make it look larger?
Inflate incentive with loss aversion
prepay people and then take back as punishment
instead of $3/day, give $100 for long time. Though amount is higher, remember time discount is higher
When patient wakes up show him kid in Africa would will get fed if patient takes medicine. Patient knows the kid will say goodnight to them whether they took it or not
What if we gave people 10% chance at $30 instead of 100% at $3? more exciting
ideal lottery
added component of regret
regret: comparison between where we are in life and where we could have been
more upset if missed flight by 2 minutes or 2 hours?
Happiness is determined by comparison to other realities
regret lottery: everyone gets lottery ticket, even if they didn't take medication, but only those who comply get to claim it

5.3 Ulysses contract

Ulysses contract=self control contract
Ulysses asked sailors to tie him to mast and muffle their ears to not be tempted by sirens. He could hear but not be tempted. Sailors were not tempted at all.
With self control contracts
example: prepay trainer at gym, cannot get refund
100 calorie cookie packets: expensive, but helps self control
grad students need to study for exam week, give computer to friend, change facebook password for one week
study in public
MBA students wear ugly underwear on date
pigeons and rat experiment
two types of people who get tempted: naïve and sophisticated
Clocky alarm clock runs around room, has to chase it
another alarm clock connected to bank account and charity you hate
stickk.com
third of people willing to accept less food to prevent overeating at restaurant
people willing to prepay for medical procedure

5.4 importance of self control: individual and environment

how self control behaves as trait over time
marshmallow test
kids 3-6 put in room with marshmallow: have one now or wait 10 mins for two
kids sat on hands, sang to themselves
kids who resisted did better in college
At Duke correlated to physical health, less criminal activity, more financial stability
Marshmallow Test videos
Is self control skill or innate? Will o grace?
Distraction helps
ego depletion
religious Jews not tempted by smoking on Sabbath: outside of consideration
in society it is choice between freedom and temptation
innate ability vs tricks?
How does self control suffer through temptation throughout day?
What role do rules play in regulating behavior?
Temptation from commercial world will increase as it becomes more sophisticated (next donut, next Facebook)
deaths from bad personal bad decisions rose from 5% 1900 to 55% in 2000
new technologies involve temptations: texting while driving, etc
Denver Drug Program
Ulysses contracts must be binding to be effectively
balance between freedom and shield from temptation

6.1 two systems

Blaise Pascal: “we arrive at truth, not by reason alone, but also by the heart”
Limbic-Emotional, inside (center of brain), quick
Neocortex-Cognitive, thoughtful, surrounds limbic, slow
Limbic system to animals, but cognitive is different
emotions teach for the future
emotions are quick, automatic, can be moderated by cognitive process, transitory
emotions are more short lived than expected
Dan felt better about his injuries sooner than he expected
Dan Gilbert asked professors how they would feel if they got tenure, predicted extreme emotions for a long time, but actually they soon adjusted
emotions can overtake cognition
effect of sexual arrousal
men answered questions in cold and hot states
men who were aroused were more likely to engage in quirky, risky, and immoral behaviors
rates of STDs among those who signed purity pledge is high because not using condom
this all is not about forgiving people who forgive crimes of passion, as on a jury
people are still responsible for their actions

6.2 intra-empathy mismatch

when making predictions about future actions in an emotional state, we suffer an intra-empathy gap
how we understand ourselves
people say they want to watch high quality movies (e.g., french), put them in queue
but at actual decision, they choose lighter, more entertaining movies (e.g., rambo)
2:20 people at gym who worked out longer and were thirsty were more likely to give to water-related causes, research by Lowenstein
this is a problem for charity dinners because people are full, so ask them when they are hungry

6.3 the identifiable victim effect

The Trolley Problem
version 1
second version
4 vs 1: cognition
other mode is emotion
graph of people affected vs funding for 9/11, katrina, trunami, aids, malaria, etc
negative correlation
factors
Katrina “this could have been me” but not malaria and AIDS
preventative: difficult to think about
Identifiable Victim Effect: we care more about suffering when represented by one individual
Mother Theresa and Stalin agreed
“One death is a tragedy, a million is a statistic”
“If I look at the masses, I will never act”
imagine about asking for group hungry in Africa or particular girl Rokia
people gave 2x as much to Rokia
Would you while on way to job interview jump in new clothes from bridge to save toddler?
Of course
You could say get the job and dedicate 25% of income to charity, “would be much more beneficial” and “save more lives”
What if girl was not here? What if there were many? What if she were not born?
In second part, what if we gave people two bits of information: Rokia and statistics about others.
Adding statistics shuts off emotions and people give less
Helping distant strangers in need is economically irrational
Experiment with 8 kids, pre-select vs random post-select after donation. Outcome is more in preselect

6.4 emotional decision making

Baby Jessica fell in hole in TX
more TV coverage than Darfur and Rawanda
People donated to her even after saved
Albert Szent-Gyogyi: “I am deeply moved if I see one man suffering..” but “unable to multiply one man's suffering by a hundred million”
Rick Bass: “images often strike us us more powerfully” than numbers
Samantha Power: atrocities
Spammers have found way to create emotional link to victim
Suggested that spammers make typos on purpose to find most gullible
(6:55)
experiment: which jam would you like to get? Which poster?
Chris Hsee

6.5 risk assessment

how do emotions affect your belief regarding the risk of death?
Paul Slovic: whatever was mentioned in the newspaper the month before that makes people believe they are going to do from it
terrorism is out of control (vs driving) and intentional, causes fear
perception of risk higher when
emotions

Week 4: Special Guest: Lalin Anik: Lionel Messi meets Salvador Dali: A motivation(al) story

gave up swimming of 20 years
hard to be motivated to work so hard
first motivated by physical, then competing, then mental
8 year old not motivated by money to swim all day
money is also not best incentive for adults
social motivation
experiment partner with Global Giving
kickstarter.com: more likely to donate if request has 50% than 0%
wikipedia
Time
Lionel Messi soccer player would play well in crowd but not do other task, say cooking
social presence of others can motivate us if we are familiar with task
if not familiar with task, raise adrenaline, disable performance
a task that is hard to incentivize: creativity
creative tasks (e.g, painting) start as hobbies, intrinsically motivated
then make decision whether to use this to pay bills
US Army, how prosocial (caring about other people),
"Work is not man's punishment. It is his reward and his strength and his pleasure." - George Sand

Week 5: special guest: Leslie John: Using people's biases to do good

buy gym membership that is not used
fail to take prescription medications on time
harmful behavior such as risky sex
employer subsidizing gym not efficient to go to gym
instead, capitalize on two biases to lose weight:
we tend to overestimate very unlikely events (e.g., lottery), represent disproportion effect on judgment
instead of paying $1 to lose weight, gave people 1% chance of winning $100
cost same but difference on behavior is extraordinary
each participant chose lucky number
chose one lucky number every day
you only get $100 if you attained weight loss goal that day
sent text message “congrats for winning lottery but sorry you didn't make your goal, so no money”
loss aversion explains why investors hold on to stocks far too long
gave dieters chance to put down own money towards losing weight
incentives lost weight but gained back (some/all?)

week 5: Hedy Kober: self control: how to get better

SC is what you exercise when you try to change something about how you would otherwise think, feel, behave
one option comes naturally (e.g., eat cake)
examples of temptation
self control associated with long term benefits: health, happiness, success
marshmallow test with kids: eat 1 now or wait 2 in 15 minutes
self control better predictor of school performance than IQ
self control as mental muscle (useful muscle)
technique
muscle with limited capacity
train self control
motivation to change

Week 6: special guest: david pizarro: the surprising way disgust shapes our thinking

emotions motivate action
when fearful run away from lion and think they are everywhere
universal basic human emotions
gross, give us disease, contaminate
helps avoid disease
easy to make people disgusted, compared to other emotions
universal triggers: feces, urine, blood, vomit, rotten flesh, pus
these things make us sick
people value things they own (say, a coffee bug), but this effect is wiped out by disgust
- disgusting product (clean tampons in box) touched cookies box, made cookies less valuable
also works on people
WWII propaganda made people disgusted at Jews
are some people more convinced?
Negative attitude toward social groups?
Disgust sensitivity scale
scale predicts behavior
eat nutritious meal worms
eat chocolate shaped like poo
scale predicts political orientation: liberals are harder to disgust, conservatives easier (N=30K) even after controlling for some factors
predicts voting records at state level: mccain vs obama
replicated results internationally
small effect, but surprising relationship
can shift?
Disgust with odor, then asked about various social groups
odor made people evaluate gay men, but did not affect other groups
maybe self report is not accurate? Measure physiological measures
reminder about hand sanitizer/swine flu changes moral evaluation about unrelated item
also affected political orientation self report
when should emotions influence thinking?

Special Guest: Peter McGraw

what makes things funny?
Humor research lab, UC Boulder
Consequences of humor: Humorous people are well liked, leisure time, friends, money, marriage, divorce
humor is response experienced in one of three ways, or all three
Freud's theory: release of sexual or aggressive tension
Plato and Socrates: when bad things happen to other people
Hobbes: laughter that in response to sudden glory over enemies
Incongruity
Problems with theories
suggest benign violations
Mark Twain: source of humor is sorrow, not joy
tickle and play fighting
distance: tragedies can become funny with distance of time, but if it was mild, it needs to be recent
mixed emotions: alternative explanation for something that seems wrong
individual differences
what is not funny: in one study only people who saw both the situation as wrong and not wrong laughed, but not those who saw it as wrong, and not those people who saw it as not wrong
comedians transform bad into good (violations into benign violations)
humor is attention getting, wrong things get our attention
humor helps people cope
Special Guest: Noah Goldstein: Persuasion: Provincial Norms

Special guest: Todd Rogers: Behavioral Science and Election Participation

standard “will you vote” message 10 years ago
random tests
2008 primary in PA
inspired by implementation intentions
whether a person votes is public, for whom is private
should emphasize “not enough (young) people are voting” or emphasize lots of people. High turnout is more effective. People conform to behavior of others.
How to refer to people? Voters of people who can vote
accountability
research doubles or triples impact of dollars spent on voter mobilization
Barrack Campaign used this research in 2012 but not Romney
http://www.hks.harvard.edu/about/faculty-staff-directory/todd-rogers

Office hours week 2

2:50: keep Coursera free price but change perception, “For first year if you give us feedback, we will waive cost.”
3:00 money as gauge of seriousness
4:00 guilt of payment (for theater in place with bad weather) changes behavior
7:00 Duke, Dan, and others invested 3000 hours into just the video lectures
11:00 Coursera will not be able to transition much from free to paid
13:00 people would not pay for online education because it has zero marginal cost
26:00 being poor is like having a small suit case, have to remove things to add things, trade-offs are exhausting
28:00 people make money by hour, can choose how many hours, e.g. carpenter, think about opportunity costs differently, think 3 hours for new bicycle, use hours of labor instead of money
30:00 animals affected by advertising
33:00 discounts should not matter, but original price serves as anchor
35:00 discounts should be temporary and explain why the discount is there special for the customer

Week 3 office hours

illegal downloads
altruistic cheating
15:40 moral compass
18:00 generalizing dishonesty
24:00 gender difference,