YouSaid · the spoken record

Dan Ariely

lines on the record: 102
first: 2019-04-01
most recent: 2019-04-01
sittings or episodes: 1
sources: podcast

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“Every waking hour plus coffee to try and even sleep less. And that range is completely up to me. But this range is very large for everybody, everybody in the knowledge economy has a large range, and that range is only going to increase. And this is why I think it is so important to invest One of the things that shocks me about human capital is that when you look at companies annual reports, if a company buys a warehouse, it's an investment. If they invest in human capital, it's a cost. Where does it show, right? It doesn't show as an investment. And I think we need to change it. And a couple of times I went to talk to investors about irrational capital. And I say, imagine that we were on day one and you get to design annual reports.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Relationship with other people in the lab, it's doing things for charity for themselves, it's trying to be more courageous in all kinds of ways. So in the year we can talk about how that one worked. But those, I think, are the principles of what separates compensation. From saying to somebody, I really care. And if you think about what creates, let's go back to the topic of goodwill. Think about the gap between the minimum you need to do to keep your job. The max you could do if you're truly excited that's goodwill, right? And as a university professor, for me, the gap is very large, right?”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“And the task is supposed to get people out of their comfort zone and get them to experience something that they might not and reflect on it to see whether it made them happy or not. So these things involve doing things for themselves and doing things for their families. And I mean, there's all kinds of adventures there. And the idea is that everybody in the lab were about 40 people are going to do it at the same time. We're in card number two. So card number three will come soon. And that's a very different type of gift. But I think it communicates in the same way, right? It communicates forward-looking, not backward-looking. It communicates, I care them as a person. And some of the missions, I hope nobody would listen, but some of the missions are, for example, to try to sleep early for a whole week just to experience something that we all know we need. It's about increasing the social.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Still an amount, so this year I try to do something that is very, very cheap, just to make sure that it's not a cost. So what I did was I created my own version of a card game, and these are all scratch cards, and everybody has 40 cards, everybody has this pack of cards, and every Friday, sometimes every Friday, sometimes every other Friday, I tell them it's time to scratch the next card. And then they have a task.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Up to two weeks, and I said, I'll send you there. I'll pay for it. And people, you know, cheap hotels, coach travel, but people ended up wanting to do all kinds of things all the way from drumming to cartoons to meditation to yoga to watching some rituals in Indonesia. And it was an amazing year, right? It was another proof to the people that I care about them. And people kept on going and coming back and anticipating and sharing. It was incredible. Now, that was last year. And then this year I wanted to do the opposite. So I wanted to basically do something that that year was about $3,000 on average per person. Not too high.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“One of the best gifts I gave people for the end of the year, I asked everybody in the center. So here's the principle. I wanted to get people to recognize that I care about them as people, not just as working bodies, that it's forward-looking, and I wanted them to remember the gift. Seems like good principles for design, and gift certificate doesn't answer any of those things. It only answers the criteria of let me do the thing that needs the least amount of work. So what did I do? I asked each person to write me half a page telling me something they want to learn, somewhere in the world.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“The principle is that it's about caring, trust, and moving forward. Not I owe you backward. So think about friendship or romantic relationship. We have a very incomplete contract in a marriage for better or worse. We all make it work. It works in, you know. 40%, 50% of the cases, which is shocking that works in that high percentage. But you think about the contract, it's basically saying we're looking forward. There'll be ups and downs. We'll make it work. So the companies that Use compensation in that regard Predict will be much more successful. And I'll give you an example of what I do in my research center.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is there a way to them say there are certain forms of compensation structures that your hypothesis would be those companies will do better because they're motivating their employees better than other companies?”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“What is the time horizon of payment? The time horizon usually you've done something for me and I'm paying you back. The books are closed, right? It's backward looking. It's not I'm paying you now you owe me. It's like you did something I'm paying you back it's short time and it's backward looking a favor is very different, right? It's open-ended and it's future But if I gave you a new pen, right, it wouldn't be you've done this for me, I'm giving you that, it will be forward looking, it would create something. So companies want to create something that is future-oriented, right? You don't want to say, oh, I've just paid you for the past, we're done. It's about this deep connection that has to do with we're together. So that's an example of a study that fits very much in.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“From that. And the pizza condition was between them. And I suspect that if the pizza was more real, gift-like, it maybe would have been even better than a compliment. And if it was more transactional and valid only on Tuesday at 8 without black olives or something like that and so on. By the way, I told this story. I was visiting a big insurance company in Israel and I told them that story and motivation the next day, the CEO sent 5,000 pizzas to employees and I met him a few weeks after that and he said he was shocked by how much positive comments he was hearing weeks after that. And you know you talk about people who could get pizza, right? But there's something very different about it. And here's an important thing. If I pay you”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“No excitement whatsoever. We did fix a few things. But okay, so I told you what happened to the money, went up and then backfired. What happened to the complement went up slightly more than the money? and slowly went down over the next few days but never backfiring creating a total just benefit”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“But what happened the next day? And remember, the next day is important because that's goodwill. And in the money condition, it went up by about six percent on the first day, went down by 12% the next day. It actually backfired. And went slightly up toward the control condition on the next two days, not catching up to the control condition. And in general, Intel paid $30 to lose about 5-6% of productivity, which is a huge on your production facility, that's a big deal. With this data, I went to Intel's management in California. I said, look, clearly your intuition about what motivates people is wrong. Your system that you created has been costing you about 6% of productivity and costing you money on top of that. So I said maybe your intuition is wrong about employee motivation. Maybe we should examine also the bonuses you give to top management. Maybe they are not motivating there as well. How excited do you think they were to let me?”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Ahead of time in the morning. And then what happened on that day? And it turns out all three methods were better in the control condition. By about 6%. The money was slightly worse, 1% worse than the other two, but all of them worked, right? So any incentive you do, it basically works.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Home too complex, so we send them a voucher for pizza, not the same, and then we did a compliment. So here's what happened. People came on that day. Quarter of the people told nothing, the control condition, a quarter of the people were told if you produce 1,300 computer chips, you'll get $30, a quarter were told if you get to that goal, you'll get a voucher for pizza, and a quarter were told you'll get a text message from the boss saying nice job.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Pay attention, right? So sometimes you say your contract is to do X would you do Y? You're a janitor and somebody falls. It's not in your description of your job, but you still do it. But here we have a chance to examine goodwill, right? On the first day you come, you get paid and you get a goal. The next day you don't. So you have both of them. So I approached Intel and I asked him if they would allow me to do an experiment. And eventually we did the following things. We had their condition, the money on the first day. We had the control condition with nothing. We had a pizza condition. I really wanted to send people a pizza and was the idea to get people to be heroes in the eyes of their family. It's a gift and it's not money and it's social. It goes to the whole family. It turns out HR at Intel is unable to send people pizza at home, too complex. Amazing computer chips, no problem. Pizza.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“You come back after four days off and you say, Hey, please aim for 1300 chips, computer chips today, and you'll get $30. Now that system was very interesting for me because it has both a goal and a target on the first day and nothing on the next three days. And one of the things I want to measure is goodwill. And if you think about what goodwill is, goodwill is when you're not rewarded for something exactly, how much do you pay?”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“An example of a piece of research that fits very well. So, this was a study in a production facility at Intel. This is a factory where people come for four days on and they have four days off, four days on, four days off, and on the days that they work, they work for 12-hour shift, long days. And the people at Intel said, you know, after four days off, maybe people don't come back that excited about work. Maybe we need to kind of get them to start the right way. So let's get them to start by giving them a target. and giving them a bonus, $30.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Shift a little bit to some of your research and how that does or doesn't overlap. So even start with the obvious one that I would have thought of, which is compensation. Look at companies and how they compensate people compared to others. I know you've done a bunch of work on compensation as a form of motivation. Why don't you talk a little bit about that work and then how it does or doesn't factor in to these models?”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“In the mindset. What is in the mindset is feeling trusted or getting examples of not being trusted for the worst side. So those are the things that end up mattering a lot.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sorry to say to WeWorks and the likes, you know, it doesn't seem to make a big difference. The big difference seems to come from things some way things we know like autonomy and trust and transparency and feeling that the company has a mission. If you look at the things that really matter, they are certainly not the things that are easily measurable. Like if it was quality of furniture, you could go and measure it more easily. If it was just bonuses, you could measure it easily. If it was just health benefits, you could measure it. The things that seem to matter is the emotional connection. And I think that the reason for that is that if you get to a different level of salary or benefits or whatever, you get used to it and you don't think about it very often. How many days a year do people go to work and say, this is my salary, right? It's just not that much.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“So think about something like health benefits or benefits in general. Should matter. It turns out they don't score that high. I mean, it's not negative, but it's not very positive. Or another thing I was sure the job titles would be really good, that people would love going to places with more job titles. Turns out not a big deal. Quality of furniture.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Does much worse than the SP, right? Everything I could measure does just as well, like even if you say, Oh, this attribute doesn't do much better, it's still quite amazing. By the way, there's also a signal on the downside. So you could ask the question, what happened if you buy the bottom 20% to those things perform worse than the S&P? And the answer is absolutely. So it has a signal both on the top and the bottom. And it turns out that the dimensions that end up mattering, some of them surprised me.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“And it turns out, you know, the results, because you've seen some of the data, but it turns out that all of those strategies but one, all of these building blocks at one beats the S&P on that time period and the one that does worse is like tiny bit worse. Not all of them do as well as others. There's a range. But one from those does slightly worse. The rest of them do just as well or better than the S&P. And this for me was an important step because it says I can invest in principle without looking at quarterly reports, yearly reports, nothing about ratios of whatever I can just look at how companies treat their employees. And not only that, It's very hard for me to find something that I could measure.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's hold these holdings until we get new data. Maybe we got the new data in January 2007. And maybe one company improved in quality of coffee and we reached to the top 20 in one company dropped. And we keep on having a portfolio of quality of coffee, quality of furniture, benefits, all of those things, almost 80 of them. And what we could do with this portfolio is to say, how much does it make? How much does it make compared to the S&P? for example. And the reason this exercise is important is it tells you what the building blocks are. We're going to think about other strategies to create from those dimensions, but to start with, you say, let me look at everything I could measure on human capital, which one matter and by how much.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I saw the companies from the best quality of coffee to the worst quality of coffee. And I say, let's build a portfolio. The top 20% of the companies who treat their employees best in terms of coffee quality. And let's just buy those stocks at the stock prices of January 1st, 2006 when you have the data. And let's hold that portfolio.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“And how companies do on them. And I play the following game, right? So, this is a backtest, but you know, it's really a simulation, right? So I say, imagine it was January 2006. And I got the first set of data. The first data is 2006. And I saw that the companies on each of those dimensions separately. So I take one dimension, let's call it quality of coffee. We actually don't have quality of coffee in the data set, but I'm just, as an example, right? You have quality of coffee.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“I start looking for data and I look and I look and I look and eventually I get this data set on hundreds of companies. and how they treat their employees. Kinds of ways you can think about quality of coffee or quality of furniture or difference in salary between men and women. Think about lots of these dimensions, almost 80 of them. 80 dimensions. And the data goes from 2006 until today, right? So hundreds of companies. Of these dimensions”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“So that was kind of step one of my familiarity, at least a little bit with companies. And then the other thing, the second thing that happened was that I became interested in motivation. And from time to time, I got invited by companies to do research internally on motivation. I did some experiments on bonuses, experiments on gifts, all kinds of things on that. And then people often ask me the question, so I could go to a company and change motivation within a company or change a bonus structure and get people to perform better. And I would get questions from my Wall Street friends of saying, you know, can you identify the companies who are doing well on this and not? And I decided to take that challenge seriously. So about three years ago, I started looking for data that could teach us something about human capital, about how companies treat their employees.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“So I was a very happy PhD student. Then I got my first job as a faculty member at MIT and I joined also the media lab. And the media lab is a really fun, exciting place that looks at technology. And I started becoming interested in both technology, but also companies who adopt them and don't adopt them and what are the processes and so on.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. So, what happened is that the amateur golfers don't care. They don't have expectations. So they get the real ones, they get the fake ones, they don't care. The ones who are not expert like the top experts, but they're good golf players, their expectation was that the fake clubs. Would not work as well, and again, it was a self fulfilling prophecy. And the reason I like this research so much is that for me it's a fascinating way to think about the mind-body relationship, right? The mind does play a big role. We can change our natural killer cells, right, in terms of stress. We can change our physiology. this connection that we have between our expectations and our beliefs and what happened to us in reality is just an amazing unclear story and I think the amount of human potential in there is very very large.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“But some. Okay, some must be. We gave people Callaway. Calloway is a trick. Gave them Callaway clubs. And we told them that some of those clubs are real and we told the other half are. Fake, and we saw what happened to their golf performance. This was hitting a putting, not just something you can more easily measure their performance. And what do you think? Does it matter if the clubs are said to be, they're all real clubs, by the way, we didn't buy fake ones, but it did matter. And who do you think were more affected by it? Good golfers or beginner golfers?”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is released. So, in one study, we checked what happens when we give people expensive medications and cheap medication. And we show that the expensive medication create higher belief and therefore they're also more effective. So we gave people electrical shocks and we saw how much the painkiller that we gave them could reduce the pain from electrical shock and the expensive painkillers did better. But here's another version of this. We gave How many of your listeners you think are golf players? A lot?”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Little bit like Pavlov's dog. So, if you remember the story with Pavlov's dog, you have bell meat saliva. Bell meat saliva, bell meat saliva, and then eventually the saliva shows up to the bell. You don't need the meat anymore. And that's kind of the story that our mind often predicts the future and change our physiology to fit with that future. So you're going ready to go to dinner, your brain says, hey, dinner, dinner, dinner, and you start secreting saliva. stomach juices and so on and this is what happens with pain so somebody comes and gives you an injection to relieve pain and your mind says oh pain relief is coming let's secrete internal opioids we have opioids that are very very similar to opium just internal into our brain and we could secrete them and you sadly cannot close your eyes and say please please please can i have this substance but if a physician injects that your level of belief is going to control how much of that substance”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Placebos really work, right? People don't recognize that placebo really works. And placebo is basically the idea that the mind can change your physiology and change your physiology in a way that solves the problem. So the Pygmalion effect is one example. You take teachers and you say to them, half of these kids are just not that good. The kids sitting here on the left are just not that smart. The kids sitting on the right are really smart and intelligent. And then you wait until at the end of the semester you find exactly what you told them, even though you told them random. You randomly assign kids to that. Not very ethical, but it works. And that's because what happened is the teachers act on their beliefs, right? So a kid who is supposedly not that smart says something and they read into it not being so smart, oh, it's a mistake. The kid who is very smart to say, oh, maybe there's something in there. Encourage them more and so on. Another part of placebo, the self-fulfilling prophecy.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“It changes by the day depending on what I'm thinking about and so on. But if I think about what did I for me find that was the most deeply interesting for a long time, I think it was some of our findings on placebos.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“I think most of the traditional research is more driven by curiosity than my problems. That's what I did, I think, in the beginning part of my academic career. Sometimes it's motivated by problem, right? I care about pain or I care about something, but it's not often very specific problem. But over the years, I've become more and more interested in solving problems. I'm a big fan of research, a big fan of science in general, but my own preference is to help things quicker and not to wait until... We have the perfect solution”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Different, right? So, one is you're deeply curious about something, another you're trying to find a problem. You create a hypothesis And is this just traditional research? You're just sort of find an experiment, you test it, you do enough of it so that it's statistically significant.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“and say hi honey I mean this new job they're matching a dollar for a dollar what do you think I should do what do you think we should do what happened when you make this call you get brownie points right you're saving for the whole family now does your significant other remember this three months later who cares right the five minutes in which you make this decision you get brownie points and people people save more anyway lots of things like that so that's an example of a research project that starts with a problem I don't think people save for emergency Let's help them out.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, what happened is that we have this tremendous asymmetry, and what his father was trying to do in his way and what we were trying to do with the coin was to basically make things visible. By the way, since then, we've done lots of experiments on changing visibility of money. And every time we do it, we see an improvement in how people behave. We've shown this with opening savings accounts for kids. We've shown it with 401k retirement. So just as an example, think about 401k. You go to a new job, you sign up for 401k. Does your spouse say thank you for the money that you're going to put away? Maybe in 30 years, but the rest of it is not visible. So we just ask people to call the significant other.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Every time we save or by insurance, we don't get any positive reinforcement, not from ourselves and not from the people around us. So think about the time when people used to save in goats. If you saved in livestock, you could come home from the office and you can see how many goats your neighbor has and you could compete Now you can't compete anymore. So, this whole category of saving and insurance is invisible. Think about what do you know about what your neighbors are saving? Nothing. What do you know about what they're”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, anyway, I sit in this place that they sell funeral insurance, and the father comes in, and he buys funeral insurance for a week. Just to be clear, it means it will only protect him if he dies in the next seven days. These are very poor people. They only sell funeral insurance for a week or for a month. There's nothing longer than that. And he gets the piece of paper and in very ceremonious way gives it to his son. And as he does this, I think to myself, what is this father doing? Why the ceremony? Why does he bring his son? And I realized the following. Think about a very poor family where the breadwinner of the family direct some money into savings or insurance. What is the family going to see tonight? Less. At that level of poverty there'll be less food, less water, less kerosene, less something tonight. Less terrible poverty will be less this week, this month, and so on. But the notion is that”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it wasn't tracking, it's a good hypothesis, but it's actually a more interesting story. So I'll tell you how I started thinking about this. So I was in Sueeto, a different slum in South Africa, and I was sitting in a place that sells funeral insurance. And in South Africa, funerals are very, very expensive. People in Sueto spend up to two years sometimes of income on funerals. It's the biggest celebration of their lifetime, right? In the US spend crazy amount of money on weddings in South Africa its funerals. And by the way, from a rational perspective, funerals do make more sense because with weddings you don't know how many you'll have.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“To save. We tried text message, we tried text message from their kids, we tried 10% match, 20% match, we tried loss aversion, and we also tried the coin. We gave them a coin with 24 numbers written on it. And we asked them to put the coin somewhere in their hut, and every week take a knife and scratch the number for that week, week one, two, three, and scratch it like a minus if they didn't save and up and down if they saved. And it turns out that the coin almost doubled savings compared to everything else, including 20% to match.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“A very different example is research that is directed toward some objective. So in this next example, this is an example where we did a study in Kibera. Kibera's Islam in Kenya. And we were trying to get people to save a little bit of money for a rainy day. So here it's not about curiosity about something that is happening. It's basically saying people in Kibera have bad things happening to them multiple times a year. They are not set up for this and they leave hand to mouth. When something bad happens, they have to borrow interest rate in the black market is 10% a week. And then, of course, things just deteriorate. How do we help them save? So that kind of research is not driven by curiosity about, hey, I see a phenomena, what's going on here? It's driven by, hey, I see a behavior that I want to change. How can I do it? By the way, the end story of that was kind of interesting for us. I'll just deliver very quickly. We try to incentivize them in different ways.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Silence and he goes to sleep. And I knew he got his seven injection. So I called him and I said, what's going on here? I want another injection too. And she said, no, no, she just gave implacebo. She just gave him IV fluid. And, you know, it's one thing to read about placebos. It's another thing to experience pain, pain from burns, to know that the person next to you is experiencing similar pain and to know that they are quietly going to sleep after that. So that's an example of something that I experience something. It was bizarre and strange and interesting and I wanted to look more deeply into it and that led to lots and lots of papers on that. So that's one example.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“Many times it can start at almost a random place about curiosity. So the first thing that needs to happen is some curiosity. And that curiosity can happen from I see something bizarre and I say, why does that happen? So an example for this is that when I was still in hospital, we had the ration of how many painkillers we could get. We would get six shots of morphine a day. That was our limit. And, you know, of course, me and all the other patients, we would track how many injections I got, how many I have left, want to make sure I have enough for tonight to sleep. And because I'm a little obsessive, I would count my medications, but I would also track other people's just to make sure they're not getting too much. And one night, the guy next to me, Ronnie, screams at night and he asks for a painkiller, and the nurse goes to his room.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“I've expanded to looking at all kinds of places where we have an intuition about what's the right thing to do for people and what this intuition fails and we might want to do something differently. And my path since then has been to basically try to identify where our intuitions are wrong and what should we do differently given that our intuitions are different than what then reality is different than our intuition.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“I found other ways to examine pain, electrical shocks, pressure, all kinds of things like that. And I basically found out that the nurses were wrong. I found out that if you have a period of pain and you make it longer, you don't actually remember it as worse. But if you change the amplitude, the intensity, you can make it much worse. And the nurses were doing the wrong thing. They were trying to minimize time, ripping the bandages off quickly and maximizing momentary pain. And that was the absolutely worst thing they could have done. In that initial insight gave me the idea that there are many intuitions that we have about what's the right thing to do that might be faulty. And it was true in pain with the nurses who were professionals, it might be in other areas. And I kept on doing lots of research that came out of my life in hospital. I kept on doing experiments on hopelessness and on placebos and so on. But more generally,”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I would argue with them. Anyway, long story short, they kept on doing what they thought was right. I kept on complaining. And then when I left the hospital and I started studying psychology, I had a professor who lost both of his legs in a landmine. This was in Israel to a landmine. And we started talking about pain. He had experienced lots of pain. I experienced lots of pain. And I told him about this thing and he encouraged me to start doing research on this. So, you know, I didn't burn people. Instead, I found...”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source
“My pleasure. I don't know how someone becomes a behavioral economist. Why don't you just start with your path? So I was badly injured and burns 70% of my body. Very tough, almost 18. Very, very tough injury. I was in hospital for about three years. In life in hospital gets you to think about lots of things. For me, the beginning was mostly thinking about how to minimize the pain from bandage removal. So imagine most of your body is covered with burns. You need to take it off. Somebody needs to take it off just to put ointment and then wrap it again and do the same thing again the next day. And the question is, how do you take off the bandages in a way that creates the little amount of pain? And the nurses in my department had the theory that the right way to do it is to rip the bandages off quickly. And I hated that approach.”
2019-04-01 · Capital Allocators · Dan Ariely – Investing in Irrationality (Capital Allocators, EP.93) · IDENTIFIED FROM THE TRANSCRIPT · source