Dan Ariely | Payoff (Episode 561)


Behavioural economist Dan Ariely, author of Predictably Irrational: The Hidden Forces That Shape Our Decisions and the upcoming Payoff: The Hidden Logic That Shapes Our Motivations

How do we restart ourselves when we have a bad day?

  • “What the hell” effect
    • We don’t enjoy middle ground: you’re either good or bad
    • If you break your diet in the morning, the rest of the day if thrown out of the window
  • Religion
    • Catholic confession and absolution
  • Every day is a new start
  • New year
  • Working out helps to change your mood
  • Having a clean slate is crucial
    • That is why confessing and asking for forgiveness is important

On how awareness affects people

  • Keeps them honest
    • On a self-check out experiment, people left three times more money if the box had a picture of eyes on it.
  • Working in front of a mirror makes people act differently
  • Humans delude themselves easily
  • Students study in public to increase their accountability
  • People act based on their role in an environment

Structured procrastination and progress

  • People make to do lists of small things to cross out but don’t do much
  • Checking boxes gives us a sense of progress
  • In a digital world the journey of thinking is lost
    • We edit on top of our previous work and lose the evidence of our though process
  • Small tasks don’t give us long term rewards
  • Implementation intention
    • We have fuzzy plans for our life
    • You only thing about specific details a few days before the event
  • The things that are more difficult are never done

How to plan events and be productive?

  • A calendar to structure the big and small plans
  • You are faced with accountability
  • The problem is that we can’t always predict the time it will take for a task
  • The calendar is better for meetings
  • If someone asks you to do something in a year, ask yourself if you would do it next week
    • You’ll always be busy, so if you don’t have the time now, you won’t have the time for it next year
  • Calendar hacks
    • For the first two hours of the day, people are highly productivity capacity (from 9 to 11)
    • If you write 500 words a day, you could produce two books per year
    • Prioritize things that are important to us and stick to it

How to prioritize

  • Don’t leave things to your own judgment
  • Have rules to frame your day
  • If you were to follow only one of the commandments, which one should you chose?
    • The Sabbath, because having a day without electronics is very beneficial
    • You don’t need a commandment to tell you not to kill or steal
  • Make rules like: Every day from 9 to 11, I will close my phone and email notifications to write
  • Creating an identity makes rules easier
    • For example people who identify as vegetarians will find it easier to avoid meat
    • It can work for companies, marketing and parenting
    • Understanding the process increases commitment and caring

Why do people cheat and lie?

  • We have an internal judgment about what we feel good and bad about
  • Rationalization
    • We don’t really care if we get away with it, but we care if we can’t live with ourselves
    • A vending machine experiment was done where the machine would give you candy and your money back.
      • Nobody reported the defect
      • People took about 3 or 4 candy
      • Take rationalized by saying: a machine took my money and candy so this is karma
    • Laws are made as if people planned to be dishonest instead of rationalization and slippery slopes
    • Lying isn’t common because it involves intentions
      • Because of rationalization, people delude themselves
    • Our brain adapts to dishonesty
      • Your brain adapts to change
    • People lie for social reasons all the time
      • We exaggerate and say niceties to smooth over uncomfortable things
      • We do it unconsciously
    • It’s hard to judge people’s action from the outside
      • When we look at criminals, we see the last point, but we don’t see the slippery slope that lead to that

What can we do to reserve the process of being dishonest?

  • There’s need to be a decision point and create a rule to eradicate the behaviour
  • Conflicts of interest are very corrosive
    • You don’t want to be paid to have an opinion
    • It’s hard to see your bias
    • If you’re a hammer, everything looks like a nail

Is lying cultural or in human nature?

  • It’s both
  • It doesn’t matter where you live, everybody lies the same amount
  • Culture changes what is considered morally acceptable
    • In Kenya it socially acceptable to bride municipality
    • In France infidelity is not viewed the same way it is in America

How did he get interested in behavioral economics?

  • He was hospitalized and witnessed things he did not agree with morally
  • We think by giving people more information, behaviour will change
    • It does not
    • We reduced smokers by “villainizing” second hand smokers, increasing taxes and banning it from some markets
  • His mission is to do good social engineering
  • There’s a ton of improvement to make
  • We are going backwards, because entities that surround you want you to do things in our short term interest rather than long term interest

How expectations change our behaviours?

  • Placebo effect
  • We don’t see with our eyes, but because our brain interprets the information
    • We see what we expect to see
  • We try to predict the future, but our prejudice influences us

More about motivation and payoff

  • Motivation in the work place is hard
  • There are a lot of things that influences motivation
    • Paying people doesn’t always work
    • Bonus season is the worst because it’s an evaluation
    • It ranks employees and make them competitive
  • If employees are motivated, everybody wins
  • Productivity increases when you are motivated

What can’t we predict our motivation?

  • By being in the flow you don’t think about your motivation
  • To have a good idea of what motivates you, you need to work in different work places over a long time and evaluate without bias
  • Experiences on motivation takes time and a lot of resources
  • Human nature is a mystery



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