A Beginner's Guide to Irrational Behavior by Dan Ariely

These are lecture notes for Dan Ariely's class "A Beginner's Guide to Irrational Behavior" on Coursera
Lecture notes
  • 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

      • influenced by

        • environment

        • defaults

        • complexity

      • path of least resistance

    • create stories to justify actions

    • branded or generic drugs

      • campaign was not successful to convert customers to generic

      • looked like they hate generics

      • forcing choice caused most to switch to generic, looks like they like them

    • xxxxxxxxxxxx??

    • jams

      • 6 jams vs 24 jams

      • more jams, more approach

      • less jams, more purchase

    • if wanting to make employee not save for retirement

      • make it opt in

      • long, complex form

      • stress importance of decision

  • 1.3 Do We Know Our Preferences?

    • Experiment

      • asked person to list 3 or 10 reasons they love significant other

      • asked how much loved

      • those asked 3 declared more lovens

      • people who were asked 10 fell short, felt stuck, and questioned themselves

    • 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

      • scale#1 0 to >9 more per day: answer on left, think I am below the norm/bad

      • scale#2 0 to >9 more month : answer on right, think I am doing well

      • then ask whether to call dentist


    • financial advisor asks to think about retirement

      • #1: think about bad finacial situation

      • #2: vacation in bahamas

      • ask risk to invest

    • a momentary mindset can have a long-term effect

    • decoy effect aka asymmetric domminance

      • two or three choices

      • free vacation to Rome

      • free vacation to Paris

      • free vacation to Rome, but coffee is not free

      • adding “minus” option makes comparison easy. Otherwise

    • economist.com subscriptions

      • web $59

      • print $125

      • print and web $125

      • MBA students chose 16%, 0%, 84% when given three

      • when option removed, new choses were 68% and 32% (choices reversed)

    • it is hard to make evaluations

    • decisions are influenced by choice sets

    • Darwin Economy (book), Robert Frank

      • biggest lion seal gets to mate

      • #2 biggest doesn't mate much

      • goal for lion seal is to be slightly bigger

      • big seals die from heart disease and hurt females

      • race for better position can threaten whole system

      • This happened in housing market in US. Good schools are in good neighborhoods. People push to better homes leading to fights and divorce (?).

    • Study of physical attraction

      • who do you want to date?

      • decoy person introduced “slightly uglier”

      • when going to bar, bring wingman who is slightly uglier

  • 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

      • we have many decision biases

      • our intuitions are often wrong, and we don't recognize our faults

      • we need to rely on empirical evidence from experiments to accurately analyze our behavioral (analogy to measure table in visual illusion)

    • FDA requires rigorous experimentation before drug can be put on market

      • still, cough medication for children turned out to be bad idea

      • some back surgery turned out to be useless

      • physicians think they know what is good, but intution is not good enough

    • “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

      • He wanted 2L coke, store was out, offered 2x1L for same price, he went far in cold rain to get it

      • this affected his consumption behavior

      • some people when they hear name of loved one (e.g., parent or spouse) will do the opposite of what that person wants (e.g., work hard), even unconsciously

      • he triggered this subliminally

      • some people build up resistance to messages such as “work hard” or “eat healthy” and do opposite

      • he found sometimes more effective to sublimilly trigger “exercise” than “eat healthly” because of backlash habit

    • brief brand exposure

      • people commonly briefly exposed to many brands

      • chose Apple and IBM

      • same product category, equally well known, equally respected

      • subliminally exposed

      • thought Apple associated with creativity

      • people exposed to Apple were more creative than IBM or neutral

    • 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?

      • Previous research

        • Everyone wants warm and kin dpartner

        • Men want looks

        • Women want earning

        • research paradigms behind this knowledge

        • based on hypothetical

        • evaluating photographs

        • what about after met potential partner face to face?

      • Speed dating

        • 12 men and 12 women went on 4 minute dates

        • a week earlier they fulfilled survey

        • showed same preferences in survey

        • however face-to-face the sex differences disappeared

      • meta-analysis consistent: sex difference is not important

      • do people know what they want?

      • (10:24) “ignoring sex differences, do people who believe they value a certain characteristic actually prize it more than others do?”

      • to what insight do we have into what motivates romantic interest?

      • Regardless of stated preferences, people acted the same

      • people are complicated (many dimensions) and requires recipricol relationship, so looked next at cereals

      • with sugar in cereals, people behaved consistently with preferences

      • so something special about dating domain

      • maybe different in marriage, so sample 500 single people age 41, follow up 2.5 years later, reported on current or desired partner

      • recommends meeting face to face, even briefly, instead of focusing on online dating

  • office hours 1

    • 1:23 Rationality & Irrationality

      • not crazy vs normal

      • economic definition of rationality

        • people have complete and transative preferences

        • known preferences in sorted order

        • no violation of transitivity: if like A more than B, B more than C, don't like C more than A

      • economics is descriptive and prescriptive (for government, etc.)

      • if assumption of economics is violated, then recommendations may not be valid

      • second version: we don't understand what drives our behavior

        • we are likely to make mistakes

        • in standard economic theory, people should not be altrustic

        • if people think they are driven by logic instead of emotions, people will be trapped


    • 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?

      • Loss aversion

      • short term or long term?

      • When punishment goes away, reward behaviour continues


    • 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?

      • Capacity for creating is limited

      • Lots of potential to create misery


  • extra video: what is behavorial economics?

  • 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?

      • Barter (e.g., chickens for broccoli

      • money helps markets work efficiently

      • money is as important invention as wheel

    • 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.

      • People said, “If I can't buy a Honda, I buy a Toyota”--same category

      • Correct answer would have been X vacations or Y lattes.

    • Imagine

      • Being paid each week in cash in envelope. This shows horizon.

      • Now imagine paid in year

      • now credit card and student loan

    • Tradeoffs are obscured in our complicated economy

    • When problems are complex, we take shortcuts.

    • Experiment:

      • #1 Sony for $700 or Pioneer for $1000: $300 vs quality. People preferred Pioneer

      • #2 Sony for $1000 and $300 for only CDs and DVDs to spend or Pioneer for $1000

      • In the first case the money could have been spent on anything, but people preferred the Sony in #2.

      • When made concrete in domain (CDs, DVDs), people got excited because easier to imagine.

    • 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

      • most people would walk 3 blocks to save $8 on pen, but not $8 on $1000 camera

      • Adding $2k to $40K car to get leather vs $2K to $500 office chair

      • renovations involves many quick decisions with large sums of money

    • 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

      • use cash (best) or debit

      • receive notification whenever money is spent

      • increase salience: think of gas (watching meter at pump) vs electricity (nothing to see)

    • to decrease pain to focus attention on enjoyment

      • use credit cards

      • keep payments hidden

      • prepay before consumption

    • what are characteristics of ideal gift?

      • Removes pain of paying

      • people want things but don't feel right about paying


    • pain of paying involves

      • opportunity cost

      • “hassle” component

      • moral tax and associated guilt

      • method of payment

      • timing of payment

    • chips in casino

    • pre-paid money in certain category (e.g., gift card) is easy to spend

    • America Online used to charge by hour

      • 20 per hour plus $2.95 for each additional hour or x per hour

      • then in 1996 went to unlimited

      • thought

        • people over 20 hours were constrained by marginal cost, would use more

        • people under 19 were not constrainted, would not use more

      • they planned for small increase

      • actually demand dramatically increased (4x)

      • before watching the usage clock was annoying

  • 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

      • partitions spending

      • makes financial decisions more manageable

    • two approaches for helping people think about money

      • assume rational and can effectively manage money between categories

      • OR, optimize existing mental accounting techniques, even if they are not rational

  • 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

      • day center center introduced a small fine

      • parents increased lateness because they could pay for it instead of feeling bad

      • after removing fine, lateness continued

    • 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

      • we try to make complete contracts but it's hard to do

      • marriage is kind of incomplete contract

      • in effort to write complete contracts, social norms suffer

      • complete contracts enforce the letter of the law, not the spirit

    • 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

      • e.g. book

      • $10 book + $10 shipping, or $20 book + $0 shipping. $0 book + $20 shipping

      • worst is $10 + $10

      • best is $0 book + $20 shipping

    • way to split bill with friends

      • bad: split bill according to what each had

      • split the bill by number of people

      • have one person pay and alternate who pays

        • because pain of paying is not linear

        • someone gets benefit of treating, good feeling

        • feeling of free


  • 2.9 micropayments

    • micro-pricing breaks up cost of purchase into smaller components

    • paying penny 100 times equals paying $1.00 once?

    • Experiment,

      • Three conditions

        • cartotoons $$

        • news sports $

        • “post modern lit” free

      • everyone got $10

      • some were in micropayment on demand condition, micropayment at end, dedudct from prepay, subscription

      • people who got subscription paid much more than micropayment

      • micropayment were miserable, reading postmodern lit

      • people who prepaid (#3) paid more than paid at end (#2)

    • 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

      • psychology of money is topic where intutions are not always correct

      • we think we are experts



  • 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

      • give people in US and Canada $20

      • tell them how to spend it by 5pm

      • measure happiness


    • (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

      • similar to money, but about spending time

      • people who spend time on others make them feel they have more time

    • 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

      • view print advertisements

      • proxy for how view sex in general

      • watch, either highly sexual or not sexual

      • other condition: red ribbon, resource transfer from men to women

      • reherse ten digit number to distract, helps spontaneous reaction

      • women didn't like sexual ad except without the red ribbon condition, in which case it was like the moutain scence

    • experiment #2

      • emotional and attention resources instead of monetary

      • also measured mooder

      • proofreading task, find misspellings, etc. in paragraph

      • reading one of three times: loyalty, disloyalty, neutral: working together at university senate

      • viewed advertisements again


  • 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 spots

      • late for meeting

      • benefit of going to meeting?

      • cost of parking illegally?

      • Risk of getting caught

      • CBA for crime

    • no morality in rational model

    • in shredding experiment varied payment $0.10 to $10.00. Result is cheating is independent

    • getting caught

      • shred half, submit half

      • shred whole

      • shred whole, pay selfp

      • result is independent

    • 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

      • recall ten commandments

      • gave same math/matrix task

      • no one remembered all

      • some people invented commandments

      • result: zero cheating

      • it did not just affect religious people

    • even self-declared Atheists swearing on Bible

    • reminds people about their own morality

    • repeated with honor code instead of Ten Commandments

      • same result despite that the two schools (MIT/Yale) did not have honor codes

    • Princeton has strong honor code, weak long lesson on honesty, song, etc.

      • waited two weeks after crash course on morality

      • however, results were the same as MIT/Yale, so Princeton students quickly forgot

    • 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

      • to move signature to front, but they said no because it's for verification not for priming morality.

      • Dan suggested both signatures, but IRS said confusing.

      • Dan asked about putting box “give X money to fight corruption”

    • Insurance company

      • they think few people invent crimes but lots of people exagerate by 10-15%

      • costs $24B/year to industry

      • while waiting on hold, play religious music

      • put images of eyes (watching) on form

      • what if sign first

      • declaration of religion

      • guy from insurance company showed Dan form how much you drove

        • if customer declares more miles, premium goes up

        • 20K forms

        • on half of forms, moved signature form to top

        • result: diff of 2400 miles on average

    • how to get people to cheat more?

    • Fridge experiment

      • Dan put 6 packs of Coke in fridge

      • what is half life of Coke?

        Within 72 hours all gone

      • alternate: 6 x $1 on plate

      • no one touched dollar

      • (Students could have put dollar in vending machine)

    • 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

      • paid $20 before test and asked to pay back what the didn't deserve

      • hired acting student to sit in front and 30 sec in raised hand, “I solved everything”

      • cheating is obvious

      • he got away with it

      • more people cheated

      • two interpretations: CBA (there was no cost) or social proof (people like me are cheating)

      • so second variation actor asks “can't I just say I solved everything?” reduces cost but does not give example of cheating: cheating decreased

      • in third variation student wore outfit from rival school (other social group/outgroup). He walked away with money. Cheating decreased.

    • 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

      • advisor and advisee

      • advisor sees jar of money closer than advisee

      • #1: closer to real value, both got paid more

      • #2: COA: advisor got paid more as advisee overestimated

      • #3: sunshine policy: advisee discounted advice but not enough

    • doctor advised Dan to get black tots tatoos on burned side of face to look like stubble

      • Dan trusted this doctor, worked with him a lot

      • Dan asked for pictures

      • what happens when hair grows white

      • laser

      • Doctor gave him guilt try “do you want to look assymetrical?”

      • deputy told Dan he was looking for third subject for academic paper

      • temptation to remove drunk guy from study

      • easy to rationalize

      • OK not to have drunk guys, but must enforce the rule before the study or before looking at data

      • experiment artwork sponsored gallery mri

  • 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

        • in classical economics, absolution of confession means you should cheat more

        • confession adds to cost (have to talk to someone about)

        • or, feel pure and don't want to disturb feeling of purity

      • 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

      • what about clear moral transgressions such as lying or cheating?

      • Same shopping at store

      • then ostensibility unrelated task: computer-based visual perception task

      • people are good at this task

      • paid more when answering on lower side, and paid regardless of correct, so incentive to lie

      • people who just purchased in green store cheated more compared to conventional store

      • people in conventional store were honest

      • students took out more from envelope when unsupervised

      • students in green store overpaid themselves by 83 cents more compared to conventional store


    • 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

      • asked either

        • to write solutions and evaluate their own solutions and researcher's solutions

        • use 50 words to come up with solution, seeded with words they thought was solution,

      • shows that ideas are not objectively better, not idiosyncratic fit, must be pride of creation

    • 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

      • above certain level, performance goes down

      • shown with rats in maze

      • increased electric shock


    • Dan tested three sizes of bonus in India.

      • One bonus was very large

      • best performance seen in middle-pay condition

      • originally Dan planned to use loss aversion to increase stress, but second person ran away with money, so he had to move to another village and not prepay


    • 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

      • push two keys on keyboard or math-matrix task

      • with mechanical task, performance increase

      • with math task, performance decreased


    • “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)

      • watched videos, compared last five minutes of game to last five minutes of first half, compared to other players

      • so far looks better

      • percentage looks better, but actually just tried more

      • self-fulfilling prophecy because other players pass more to clutch players

      • defense knows this and tries harder, so looked at free throws

  • 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

      • far in the future

      • affects other people first

      • we do not see it progressing

      • we don't see a particular person suffering

      • individual efforts to mitigate it are a drop in the bucket


    • how to motivate?

      • Money

      • make it easy

      • reputation, prestige

      • points (leaderboard)


    • 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:

      • pay

      • charge

      • guilt: tell kids, parents, or doctor

      • competition

      • create obstacle: can't open fridge

      • cover pill with chocolate

    • $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

      • one big reward

      • smaller, regular rewards

    • 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

      • You know you will be tempted

      • you bind your current self to prevent future self from misbehaving

    • 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

      • taught pigeon to push buttons of two colors and got small reward now or large reward later

      • then show both buttons at one

      • 10 seconds for pigeon is a long time

      • pigeon chooses immediate reward

      • then when only immediate button is shown and selected, the delayed reward button shows up: pigeon chooses that one (changes choice)

      • Ulysses contract: red button turns off tempting green button

      • yes, rats and pigeons use self control stratgies


    • 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

      • as resist temptation, becomes harder

      • suggests doing tempting tasks earlier in day

    • 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

      • data sketchy

      • heroine addictions

      • addicts wrote self-incriminating letter addressed to person they wanted least to find out

      • sent letter if agreement was violated

      • drug addicts wanted out, so tested for three weeks every day

      • program canceled for violation of human rights


    • 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

      • sexual preferences

      • willingness to take risks

      • immorality

    • 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

      • imagine standing next to train wreck, going to kill four people who are on track, standing far away at lever, lever can redirect train to kill one person on other track

      • do nothing: kill four

      • pull lever: kill one

    • second version

      • standing on bridge

      • train is coming

      • still going to kill four people

      • guy nearby is wearing backpack

      • can push one guy down and stop train

    • 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

      • domestic vs foreign

      • racial

      • AIDS stigma

      • identifiable victim effect

      • unborn

      • face

    • 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?

      • Measured how much jam ate, whether hung up poster

      • decision made emotionally (just choose) or cognitively (ratings of experts)

      • emotions predicted higher appreciation

      • consumption experience is about emotion

    • Chris Hsee

      • some speakers look more beautiful or sound better

      • at the store there side by side, magnifying small differences

      • people choose sounds a little better but looks much uglier

      • think about decision environment vs consumption

  • 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

      • event is salient in memory

      • we have emotional response

    • emotions

      • are a basic part of human nature

      • can overtake cognition

      • can work for us or against us

  • 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

      • tell you about behaviors of everyone else who sees this charity

      • eg:10% of people who saw this charity give to this cause

      • 70% is the key point

    • kickstarter.com: more likely to donate if request has 50% than 0%

    • wikipedia

    • Time

      • Google gives 20% of time to employees

      • 3M has 15% of time on initiatives of own choosing

      • freedom and autonomy

      • Best Buy

    • 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),

      • security offers who were intrinsically motivated were more creative

      • being intrinsically motivated was not enough

      • also needed to be prosocial to be productive

      • they had access to new ideas

      • where able to work more thoroughly

    • "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:

      • overweighting small probabilities

      • loss aversion

    • 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

      • if didn't meet goal, lost money

      • if they did meet goal, got money back plus match

    • 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

      • text while driving

      • yell at someone who bumps into you

      • watch lecture instead of veg out

    • self control associated with long term benefits: health, happiness, success

    • marshmallow test with kids: eat 1 now or wait 2 in 15 minutes

      • lots of variability

      • outcome in test predicted future success

    • self control better predictor of school performance than IQ

    • self control as mental muscle (useful muscle)

      • if you exercise right technique/strategy, you can do more

      • self control has limited capacity (say, within day)

      • train yourself to have more self control

    • technique

      • reward: after doing taxes, go to nice restaurant

      • contract ahead of time (Ulysses contract) vs penalty: if do not go to gym husband donates to charity she hates

      • even kids who couldn't wait, experimenter could teach strategies to wait longer

      • adults do not prefer marshmallows as much as kids

      • show pictures of food, smoking (to smokers), and teach them how to self regulate

      • think of reasons not to eat chocolate cake/smoke: this helped

      • changed brain activity

        • increased pre-frontal cortex associated with self control

        • decreased others associated with craving

    • muscle with limited capacity

      • imagine in gym exercising a muscle, it gets tired, can't lift box later in day

      • same with self control

      • pace yourself: if you know you will be tempted later, do not use resources earlier

      • positive emotions (e.g., funny movie) reverse depletion

      • don't believe in depletion

    • train self control

      • cognitive behavioral therapy, changes prefrontal cortex, 30 mins per day for smoking, a direct method

      • indirect method, open doors and cabinets for a week with non-dominant hand

      • going to gym

      • refraining from sweets

      • using hand grip


    • 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

      • cognitive

      • emotional

      • behavior: laugh

    • 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

      • aggressive (violation element)

      • has to be someone you trust (benign element)

    • 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

      • feel good, bad things are less threatening

      • make fun of bad things, reappraise them into benign violations

    • Special Guest: Noah Goldstein: Persuasion: Provincial Norms

      • Tony Lilttle, fitness guru, sells on infomercials

      • increase in sales attributed to changing “operators are standing by, please call now” to “if operators are busy, please try again”

      • seems suicidal because of losing customers

      • “standing by” means idle, bored, low sales, poor demand

      • “busy” lots of agents answering calls, popularity, high demand

      • play on herd mentality, when uncertain look to others on how to behave

      • “social proof” principle

      • hotel towels

        • reuse towels to safe environment

        • effective: 3/4 of people reuse at some time during stay, though not every time

        • replaced signs

          • standard environment message

          • social proof message: “Join fellow guests in helping to save the environment. In a study conducted Fall 2003, 75% of the guests participated...” 20% increase in towel reuse

      • Principle seems simple, but why don't people use it?

      • When desirable behavior is the norm, be sure to convey.

      • Some companies use it

        • “Ford F-series truck is the best selling truck in America”

        • Pepsi challenge: people prefer Pepsi

        • Wendy's fries

      • new Arby's Bacon Cheese sandwich

        • say why it is so good, why customer will like it--intuitive

        • missed opportunity

        • internal market testing leads to decision to launch this product, but this information is not communicated to customer

      • which herd do people follow?

        • In next experiment, instead of “75% of guests who stayed in this hotel” change to “who stayed in this room #321”

        • same 75% number

        • now 33% increase (compared to 25%)

      • is this rational? No. And the people who stayed in the room before make it seem gross

      • influencers tend to fail to point to the right herd, similar, shares context of audience

      • for example, Santa Monica is better than California

  • Special guest: Todd Rogers: Behavioral Science and Election Participation

    • standard “will you vote” message 10 years ago

      • very rational

      • “easy to vote” suggests cost is low

      • “issues at stake are important” suggests impact high, consequences high

      • “close” pivotal

      • civic duty



    • random tests

      • easy=no effect

      • importance=no effect

      • pivotal vote=no effect

      • civic duty=no effect

      • content doesn't matter as much as mode of contact

      • more personal is more effective

      • canvassing door to door is more effective than robocall

    • 2008 primary in PA

      • control, not called

      • standard GOTV (voter mobilization script)

      • standard GOTV+do you intend to vote

      • standard GOTV+do you intend to vote+when will you vote, how will you get there, where will you be beforehand, solicits concrete plan

    • 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

      • people have multiple identities

      • people behave consistently with identify solicited

      • experimental survey: “to vote” or “to be a voter” (verb or noun)

      • e.g., “how important is it to be a voter in tomorrow's election”

      • emphasizing identity is powerful

      • Bryan, Walton, Rogers, Dweck, PNAS 2011

      • Should say “please be a voter”

    • accountability

      • telling neighbors who voted (accountability)

      • letter includes “threat” you may be called to discuss your “experience at poll”

    • 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

      • legal punishment does not work

      • what works: make it easier and cheaper to buy legally, make it more complex to download illegally, paying artist directly feels better

      • easy for people to believe illegal download is good, record companies bad

    • altruistic cheating

      • cheating for others

      • charity justifies dishonesty to get people to do good things

      • when someone else benefits, it's easier to justify --- like robin hood

      • dishonesty in politics

    • 15:40 moral compass

    • 18:00 generalizing dishonesty

      • across cultures

    • 24:00 gender difference,




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