#33 Dan Ariely: The Truth About Lies

On this episode of the Knowledge Project, I’m joined by the fascinating Dan Ariely. Dan just about does it all. He has delivered 6 TED talks with a combined 20 million views, he’s a multiple New York Times best-selling author, a widely published researcher, and the James B Duke Professor of Psychology and Behavioral Economics at Duke University. For the better part of three decades, Dan has been immersed in researching why humans do some of the silly, irrational things we do. And yes, as much as we’d all like to be exempt, that includes you too. In this captivating interview, we tackle a lot of interesting topics, including: The three types of decisions that control our life and how understanding our biases can help us make smarter decisions How our environment plays a big role in our decision making and the small changes we can make to automatically improve our outcomes The “behavioural driven” bathroom scale Dan has been working on to revolutionize weight loss Which of our irrational behaviors transfer across cultures and which ones are unique to certain parts of the world (for example, find out which country is the most honest) The dishonesty spectrum and why we as humans insist on flirting with the line between “honest” and “dishonest” 3 sneaky mental tricks Dan uses to avoid making ego-driven decisions “Pluralistic ignorance” and how it dangerously affects our actions and inactions (As a bonus, Dan shares the hilarious way he demonstrates this concept to his students on their first day of class) The rule Dan created specifically for people with spinach in their teeth The difference between habits, rules, and rituals, and why they are critical to shaping us into who we want to be This was a riveting discussion and one that easily could have gone for hours. If you’ve ever wondered how you’d respond in any of these eye-opening experiments, you have to listen to this interview. If you’re anything like me, you’ll learn something new about yourself, whether you want to or not. *** Go Premium: Members get early access, ad-free episodes, hand-edited transcripts, searchable transcripts, member-only episodes, and more. Sign up at: https://fs.blog/membership/ Every Sunday our newsletter shares timeless insights and ideas that you can use at work and home. Add it to your inbox: https://fs.blog/newsletter/ Follow Shane on Twitter at: https://twitter.com/ShaneAParrish Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:08Shane Parrish?

  Welcome to the Fernham Street Podcast called The Knowledge Project. I'm your host Shane Parrish, the curator behind Fernham Street Blog, which is an online community focused on mastering the best of what other people have already figured out. The Knowledge Project is where we talk with interesting people to uncover the frameworks you can use to learn more in less time, make better decisions, and live a happier and more meaningful life. On this episode, I have Dan Ariely. Dan is the James B. Duke Professor of Psychology and Behavioral Economics at Duke University. He publishes widely in leading scholarly journals in economics, psychology, and business. His work has been featured in a variety of media outlets, including The New York Times, The Wall Street Journal, and The Washington Post.

• 0:50Shane Parrish?

  He's the author of numerous books, including Predictably Irrational, and one of my favorites, The Honest Truth About Dishonesty. I'm so happy to have Dan on the show. I hope you enjoy this conversation.

• 1:09Shane Parrish?

  I'm a huge fan of your writing and thankful for the work that you've done to bring our subconscious biases to the forefront. Let's start there. Daniel Kahneman, the famous psychologist, once said something like, "I've been studying all these biases for my whole life, but I don't think I'm any better at avoiding them." Dan, has studying these biases and error helped you avoid it? Are you... what do you do to...

• 1:32Speaker 01

  First of all, I don't think that Danny was truthful in his answer, but I certainly think that studying decision-making helps and helps a lot. And you can think about kind of three categories of decisions. You can think about small decisions, like when you go and buy coffee, are you influenced by decoy effect? Or influenced by the fact that they are small, medium, and large to get the medium and so on? And those things are very hard to override. From time to time, I can override them, but they're hard to override. So that's, that's one category. There's another category of big decisions. Decision that we stop and we think, something like buying a house, or buying a car, or having kids, buying a new computer.

• 2:17Speaker 01

  Things that are, you know, we don't, we don't do in the spur of a moment and we think a little bit more. And there, I think that we can actually make much better decisions and people who know decision making can do much better. So, so even Danny, Danny Kahneman, he has some work on commuting. And one of the things that they show is commuting is a really miserable thing to do and people don't get used to it. Now, if you, if you understand this, then you might buy a house that you don't have to commute as much. Right? So on, on big decisions, I think there's a lot of room for improvement and knowing how people make decisions and what traps we fall into is, is helpful. And then there's the decisions are habits.

• 3:01Speaker 01

  And habits are small decisions, but we make them enough times that they become as important as big decisions. And this is also, I think, a place where if you understand decision making, you can, once a year, maybe in the beginning of the year or the end of the year, you can, you can look at your decision strategies. You could look at your habits and you could say, are these habits the kind of habits I would like to have? Or are these habits the kind of habits I don't want to have? And, and make a decision, not on each one specifically, but, but in general, about decision making. So that's, that's one, one thing. The second thing is that, you know, one of the big lessons in social science is that

• 3:43Speaker 01

  we make decisions as the function of the environment that we're in. And if we're in one environment, we make one decision. If we're another one, we'll make a different decision. And if you understand this, it means that we have a lot of flexibility in deciding what our environment would be like. So imagine that you and I went right now to your kitchen. And we said, let's re-engineer your kitchen to, to be a healthier place. And we looked at how you organize your pantry, and how you organize your refrigerator, and you know, where's your shopping list and all kind of things. We could probably come up with quite a few little tricks that would get you to redesign your environment in a way that would make the healthy choice,

• 4:28Speaker 01

  also the easier one. And I think that people who truly understand the importance of the environment spend a lot of time thinking about what environment would actually maximize better behavior, and it's not too difficult to do.

• 4:42Shane Parrish?

  What sort of environmental changes can we use in an organization to improve our ability to make decisions?

• 4:50Speaker 01

  So, it depends on what you want. So let's think about health first. So we said something about the refrigerator, right? The people who designed the refrigerator put the drawer for fruits and vegetables at the bottom, and they made it opaque. And that makes sense to put in the bottom for humidity and temperature perspective, and it makes sense to make it opaque because it gets dirty. But it also means that people don't open it as much, and the most expensive food that we get, the most perishable is also usually goes rotting. So one thing that we do, for example, is when we buy fruits and vegetables, we put them in front and center, right?

• 5:35Speaker 01

  It's true that somebody designed a special drawer for them, and if we were a perfect human being and every time we opened the refrigerator to think what we want to eat, we would bend all the way down and check it, but we don't. So therefore, we need to design, reuse the refrigerator in a way that makes it front and center the things we want to work more on. So that's on the health side. Let's think on spending side. And credit cards, and Apple Pay and Android Pay are designed to get us to spend more and think less. Do we want to use them? Not necessarily. A system that we have been using for a while and seems to make a lot of sense is to basically say, let's use a prepaid card. And let's put on that card

• 6:19Speaker 01

  all of our discretionary spending, coffee, restaurants, theater, and so on.

• 6:25Speaker 01

  And not only that, we, we learned that it's not a good idea to put that money on a monthly basis. Because if you put it on a monthly basis, you run out after three weeks. The right approach is to put it on a weekly basis. And even there, you want to start the week on Monday. Because if you start the week on Friday, you'll end up spending too much on the, on the weekend. So now you have a tool that basically reminds you how much discretionary spending you, you have, how much you want to spend, and you basically get it on a weekly basis. Every day you get a reminder, it tells you how much, how much you have left, and it's a much more valuable approach. And, and, okay, so that we, we said health, we said money, let's, let's think about work.

• 7:08Speaker 01

  And one of the things we know again is that people are productive in about the first two hours of the day. Almost everybody is productive for the first two hours of the day, not when you wake up, but kind of eight to 10, nine to 11, and then we have a lull. And some people in the afternoon and the evening have another little bit of productivity. But, but if you understand that, you understand that you don't want to have things that don't require your full capacity later on. So what I do is I come to the office. I make myself an espresso. And I sit next to my computer. And I don't open Facebook, and I don't open email.

• 7:52Speaker 01

  And I basically think about what is the one thing today that I really want to achieve. And I just start working on that. Right? So, so if you think about all of those examples, these are not examples about me saying I'm kind of can work on my personality in, in some way. It's basically saying, let me, let me redesign the environment in a way that will make it more likely that I'll, I'll take good actions.

• 8:20Shane Parrish?

  Does this transfer over to how we go about making more strategic decisions about whether to launch a new project or allocate resources to something?

• 8:29Speaker 01

  So, so you know, deciding, it's more about the execution than about the decision of what to do. Right, but but the answer is basically, yes, if you want to think about what's your possibility of actually running it, an important component is can you actually get to it? Will you actually be able to do it? So so those things are are important. So you basically, in almost every product design, I find that the behavioral economics perspective is very useful, right? Can I give you one one example of something we're just working on now? Of course. So so we just started a company called Shaper.

• 9:11Speaker 01

  And the the project started a few years ago when we said, let's create something to help people lose weight. And then we said, OK, so how how would we help people? And the first insight was to say, let's do something that has a physical reminder. Now, when you look at your house, how many things remind you about being healthy? Basically, nothing. So we said, let's look, let's start with the bathroom scale. The bathroom scale is the one thing in your house that reminds you about being healthy. So we said, let's re-envision the bathroom scale. And then we said, OK, what do we know about the bathroom scale? And we know three things about the bathroom scale. We know it's a good thing to step on the scale every morning, and not so good to step

• 9:55Speaker 01

  on it in the evening. And it's good to step on it in the in the morning, not because we weigh less than in the evening, but because in the morning, when we step on it, it reminds us that we want to be healthy. And that reminder ends up being important. The next thing we know is that weight fluctuates a lot. Weight can fluctuate easily, three or four pounds a day. For people who are obese, it can fluctuate up to 10 pounds a day. And this fluctuation causes two things. The first one is gain aversion. So usually, in behavioral economics, we think about loss aversion. Losses loom larger than gain. People suffer from losses. But with weight, it's the opposite, right? It's gaining weight that is miserable, and losing weight actually feels quite good.

• 10:38Speaker 01

  But imagine somebody who just their weight fluctuates. One day, they lose a kilo or pound. One day, they gain a kilo or pound. The overall effect is miserable, right? Just because of of gain of gain aversion. And then the last thing is that we expect changes to happen quickly. So people think that after a day or two of a diet, their weight should should go down. When in fact, that's not how the body reacts. Weight could you could go on a four day diet and nothing good would happen. In fact, your weight will just go up. It takes about 10 days to two weeks to to show up. So we said, OK, given that, what should we do? And we decided to create a scale with no display.

• 11:22Speaker 01

  And we said, let's separate the act of stepping on the scale from the act of getting feedback. So create a scale with no display that if you step on it in the morning says congratulation, you've done the right thing. And then we do give people feedback, but we do give them the feedback in a five point feedback scale. You're just the same, nothing has happened, you're within one cent deviation, slightly better, slightly worse, much better, much worse. It's a running average of the last three weeks. And that scale basically allow you that feedback mechanism allow you to understand the relationship between cause and effect, what you do and what happens. So we just finished a large study. Some people got the regular scale and those people gained a little bit of weight every

• 12:06Speaker 01

  month. And some people got our scale and they lost 0.7% of their body weight every month for five months. The the people with the regular scale gained about 0.3% of their body weight every month for five months. So so think about what it means, right? It means we have this thing called a bathroom scale that many of us have, but we haven't really looked at it very carefully. And if we look at it carefully from the perspective of social science, we can actually think about how we improve it. How do we make it better? How do we make it more effective?

• 12:38Shane Parrish?

  How do we step out of that frame for ourselves and objectively look at ourselves through that lens? Like, it it seems to me that it would be easier to study other people and point out possibly what they're doing wrong, whereas when it comes to our own habits, we're not conscious of that. Are there tips or tricks that we can use to become conscious of our own habits?

• 12:59Speaker 01

  Yeah, so it is hard because we don't know what influences our own behavior, right, and we're not aware of all of those things. So you remember the famous study on organ donation, right, the opt-in and opt-out, right, so you, you, there are some people who get...

• 13:17Shane Parrish?

  The default, yeah.

• 13:18Speaker 01

  That's right, and the study is very, it's amazing, right? People who get opt-in, basically they have to opt-in, they don't opt-in and they don't donate. People who have to opt-out end up not doing anything also and then ending up donating. And it's a big, it's a big effect, it's a shocking effect in terms of size, but imagine the next step of it. The next step is that you go to the people at the DMV and some people have an opt-in form and some people have their opt-out form. And when they come out of the DMV, you say, "Can you explain to me why you did what you did? Why you chose to donate or don't, not to donate in the opt-in, on the opt-out?" And what you would think is that people would have some insight about why they're doing

• 14:03Speaker 01

  what they're doing. The answer is people have no insight. In fact, what they do is they have a tremendous story about why what they did is the right thing, right? So people, people who are...

• 14:16Shane Parrish?

  We rationalize.

• 14:17Speaker 01

  That's right, exactly. And we're so fast in rationalizing. So people who are in the opt-out condition basically say, "You know, my parents raised me to be a caring, wonderful human being and I'm just following in their footsteps and I'm doing exactly what they wanted me to," or something like that, right? So they're basically creating an internal, it's all internal, it's all about them. People who are in, and people in the opt-in also say, "Oh, you know, I'm really worried about the healthcare system, I'm, you know, will somebody pull the plug a little too early?" Something like that. And the thing is that we don't tell ourselves stories that say, "I made this decision because

• 15:02Speaker 01

  of the default." So what happened is that we are so quick in telling ourselves stories about why what we did was actually the right thing. That we convince ourselves, we kind of hide this, not just, um, not just from other people, but from ourselves, and we end up thinking that we are eh making, making the right decisions.

• 15:26Shane Parrish?

  That makes a lot of sense. Um, can we go back to the, the notion of behavioral economics?

• 15:32Speaker 01

  Sure.

• 15:34Shane Parrish?

  What is a behavioral economist?

• 15:39Speaker 01

  So, so the, the, the thing, maybe the easiest way to think about is in contrast with standard economics. So standard economics is a study, an area of study that assumes that people are perfectly rational. Right? People always know what's the right thing. People examine all their options. People have no emotions. Uh, they always, always, always made the right decision and so on. And, and that's a, you know, it's a beautiful perspective on human life, right? It's wonderful to wake up in the morning and say, oh my goodness, people are just wonderful. People are always making the right decision. That's so exciting. That's so wonderful. And behavioral economics, eh, doesn't assume that people make the right decision. It's more of a, of a science that doesn't start with assumption.

• 16:24Speaker 01

  Eh, instead in behavioral economics, you say, let's just put people in different situation and let's see what people do. And some of people behave rationally, but often they behave irrationally. And, and now there's a question of what do you do with this data? So one of the unique things about economics as a social science is that it's not just a descriptive study, it's a prescriptive study.

• 16:49Shane Parrish?

  Hmm.

• 16:49Speaker 01

  economists don't just tell us, here is how the world, here is how people behave. They also say, and here is how we should create economic system, hospitals, education systems and so on. And if you assume that people are rational, perfectly rational, you would come with different prescriptions on how to create a tax system, for example. And if you look at how people actually behave, you would come up with very different eh recommendations of what systems you should build. So, standard economics start with some very strong assumptions, behavioral economics doesn't. And then because of that, standard economics continues in having recommendation that are really good for people who are perfectly rational, whereas behavioral economics makes recommendation that are good for normal people.

• 17:35Shane Parrish?

  How replicable are the behavioral economics studies in general? Do they transfer across time? And do they transfer across countries, across cultures?

• 17:50Speaker 01

  So depends, depends what and depends how basic the finding is. And so, so for example, if you think about visual illusion as a metaphor. Visual illusions basically are the same everywhere, right? If you see the Ponzo illusion or the illusion with the circles surrounded by small circles or large circles, it doesn't matter how old you are, how young you are, where you're from, it's, that's, that's, that's, that's the illusion you would get. And some, and some decision making are like that. For example, the power of relativity, right? If you have a cup of, of, of coffee next to a bigger cup of coffee.

• 18:33Speaker 01

  People would, would value the smaller one as less valuable when it's next to a, a big one compared to when it's next to a small one. We, we just are comparative creatures inherently and we do it, we do it everywhere. That things become more sensitive in culture as we get to more complex behaviors. So when you get a, you get to questions like how happy people are in their marriage, right? That's, that's a very, very culturally influenced question. Or how much do people want to give to charity, right? That of course has a very big cultural component of how much you care about your culture or

• 19:18Speaker 01

  not. I will tell you that most of my research is not cross-cultural. But I did do some of my research on dishonesty. I did it cross-culturally. And my research on dishonesty is very simple. I'll give you one example. And I give people a die, a six-sided die, and I say, please toss that die, and I'll pay you based on whatever it comes up on. It comes on six, I'll give you six dollars. Five, I'll give you five dollars, and so on and so forth. But I say, you can get paid based on the top side or the bottom side. Top or bottom, you decide, but don't tell me.

• 19:59Speaker 01

  So people get the die, and they toss it, and let's say it came with five on the bottom and two on the top. And now that they had it tossed and they see the results, I say, okay, and what did you pick, top or bottom? Now, in this situation, if you picked bottom, you should say bottom, and you get five dollars. If you picked top, you have a dilemma. If you say the truth, you get two dollars, but if you lie, you get five dollars. And what we see is that, you know, lots of people lie a little bit, okay? Now, this experiment, I ran in all kinds of countries.

• 20:41Speaker 01

  So I grew up in Israel, and the first place I went to test was in Israel. And I was sure that the Israelis would cheat more, but no, they cheated just the same. Then Francesco Gino, my friend, said, "Come to Italy, we'll show you what the Italians can do." The Italians cheated just the same. We tried Turkey, we tried South Africa, Kenya, Germany, Sweden. We tried Portugal, we tried the UK, we tried Canada, because the Canadians always think that they're better. Anyway, we tried lots of places, and we didn't find any difference with our die task.

• 21:25Speaker 01

  Now, everybody who's traveled, like have gone to Kenya, you know, you know that cheating is very different in these places. Kenya is a very corrupt country, there's no question about it. And, but here's the thing. Our task is kind of general and abstract, and it's not embedded in any cultural context. And because of that, it doesn't show any cultural differences. Now, that doesn't mean that cultural differences don't show up. Of course, they show up, but they show up only for tasks that have...

• 22:01Speaker 01

  The complexity that comes with being embedded in a social context. So, for example, when it comes to questions about would you bribe a policeman, huge cultural differences. When it comes to questions about changes in would you not pay your taxes, huge cultural differences. And my kind of conclusion from all of this

• 22:31Speaker 01

  was that culture matters, but it matters in silos. What happened is that deep down inside, just because you grew up in Kenya or in another corrupt country, it doesn't mean that you become corrupt as an individual. It just means that culture come and says, there are some domains in life in which this is just how we behave. This is just how you do business, right? It's not, it's not, you basically as a society, take this domain and say, this domain is not in the moral life. We have a social rule that overrides your instinct and how to deal with this.

• 23:07Shane Parrish?

  The Honest Truth About Dishonesty was one of my favorite books. How did that come about?

• 23:14Speaker 01

  So, so it started with, first of all, thanks for the compliment. I hope you didn't say it.

• 23:21Shane Parrish?

  Dishonestly.

• 23:25Speaker 01

  So, so it started like many other things with a personal observation on my own. And I was in a flight and they had the Menza test. And, you know, I looked at question one and I kind of thought I knew what the answer was and I flipped to page 137 to see what the answer was. And I caught myself that I wasn't just looking at the answer to the question I solved. I looked to the answer for the next question.

• 23:52Speaker 01

  And then when I got to the next question, I really solved it very easily. And at the end of this, at the end of this process, I proved to myself that I was very smart, but. I also realized I probably cheated myself.

• 24:05Shane Parrish?

  Right.

• 24:06Speaker 01

  And I started thinking about cheating and when I came back to the university, I got some of my students around and we started thinking about this and we designed the first experiment. And this was a few months before Enron came about. And when Enron came about, if you remember, the belief was that there were like three bad people. And that was the problem. And on the other hand, we had this experiment we just completed when we saw that most of our students were cheating a little bit.

• 24:33Shane Parrish?

  Yeah.

• 24:34Speaker 01

  And we said, you know, what's going on here? Is it the case that there are a few bad apples? Or is, are we correct that there are lots and lots of little rotting apples? And so that really was kind of a combination of a finding that happened at the right time. And Enron, and because it wasn't just Enron, it was, it was more companies that, you know, came, came with the same approach. We realized it was an important social decision to, to look at. It's an important social phenomenon to look at. And, you know, unlike my other books, the rest of the books, I think it's relatively easy. People, people actually call me and they say, oh, we've read this, we want to implement something and so on.

• 25:20Speaker 01

  With dishonesty, it's very tough. Like I would spend, I would go to talk to the government every time they would have me, just trying to get them to understand conflicts of interest and so on. You know, it was the first time that I wrote a book and I felt like I was really, I was trying to sell it to people and, and people were just not interested in, in people. I mean, it's, it's a lovely book and people enjoyed reading it and so on, but, but not doing anything about it. Right? Especially at the level of government and big banks. And, you know, you know, it's kind of interesting that when you talk about, you know, how to get people to save more, it's easier to get people to do something, how to get people to be healthier.

• 26:02Speaker 01

  But when you talk about honesty, almost no company is interested in taking like a real, real effort into trying and improve it.

• 26:10Shane Parrish?

  Why are we so dishonest with ourselves?

• 26:13Speaker 01

  Yes.

• 26:16Speaker 01

  I think it, part of it is the inability to see it in ourselves in a deeper way. And part of it, it looks less human. I think, you know, saying, "Oh, this person, you know, they are tempted by cookies." We understand their humanity, you know, it's human. But when you say somebody is, "Oh, you know, they never tell the truth about why they are late for a meeting." It feels like a more judgmental personality trait. And I think people have a really hard time admitting that their friends, their significant others, their colleagues, their companies have problems of this type.

• 26:56Shane Parrish?

  Are we protecting our ego? Like, what's at the core of this?

• 27:00Speaker 01

  Yes, so that's exactly the point, is that the amount of dishonesty that we exhibit ends up being a balance between wanting to benefit from dishonesty, but not wanting to feel that we're thieves or dishonest people. So we cheat up to the level that we would feel uncomfortable about it. So it's very much about us wanting to be dishonest, but look at the mirror and feel good about our actions.

• 27:33Shane Parrish?

  Is there a way you can test this if you're hiring people?

• 27:39Shane Parrish?

  To figure out where that line is for them, like, how dishonest are they? With the assumption that everybody is dishonest a little bit.

• 27:46Speaker 01

  Yeah, so you can probably do it. The thing about it, you remember, we talked a minute ago about the fact that there are different domains?

• 27:55Speaker 01

  So we did a study that we never published it, we should go back to this. It was very heartbreaking. We gave MBAs resumes of potential job candidates. And in those resumes, those people were either told, said that they were, it was said about them, that they were either dishonest in their personal lives, like to their significant other. They were dishonest at work, but for selfish reasons, like embezzling, right? They, you know, exaggerate expense reports, stuff like that. Or they were dishonest at work, but for work.

• 28:37Speaker 01

  So they cheated, for example, on negotiation to get the company a better deal.

• 28:44Speaker 01

  And what happened was that the MBAs did not care about the personal transgressions.

• 28:51Speaker 01

  And they didn't like the people who were cheating and were selfish. But they actually wanted to hire the people who were cheating for the company.

• 29:01Shane Parrish?

  Which creates a culture of cheating in the company, right?

• 29:05Speaker 01

  That's right.

• 29:06Shane Parrish?

  That's really interesting to me. I mean, what sort of things can we do to more accurately adapt to the feedback of the world? And so I guess by that I mean not lying to ourselves as much? Or letting in more of reality than our ego might be comfortable with?

• 29:27Speaker 01

  Yeah, so I don't know. I'll tell you, this is like more like personal anecdotes than research. So I've been doing this research for fifteen years, more or less. And we also did a movie called Dishonesty, The Truth About Lies, that is on Netflix. And I think it's quite good. But thinking about this topic for fifteen years has definitely changed my own behavior. And I think that honesty is a little bit like dieting. It's not that something that you read once and then you get to fix it. It's something that you have to fight with every day, right? There's conflicts of interest, there's service providers, there's your own behavior. I mean, it's just everywhere.

• 30:12Speaker 01

  And what we need is we need a heightened awareness and vigilance. And we also need to realize we're not going to solve it, right? It's not something that we'll get rid of, dishonesty. But it's something that we need to figure out where are the important points for society? And can we at least eliminate it or reduce it? So at least reduce it. And I can tell you that as somebody who does this research all the time, it's with me, right? So I get a request to do X or to do Y, or I got the request to be an expert witness. So whatever it is, I always think about my own conflicts of interest. Somebody asked me for a recommendation, you know, and so on. So.

• 30:54Speaker 01

  So I think it's a, it's something that we need to be reflective about and think about and just incorporate it into our thinking much more than we do right now. Right now, we're just assuming that we're honest people and that is enough to protect us.

• 31:10Shane Parrish?

  Is there anything that you do specifically that allows you to step outside your ego a little bit that we can walk away with?

• 31:18Speaker 01

  Well, so, so, so one simple recommendation is to think about yourself as an advisor, not about your own interest. So, um, what would you advise somebody like you to do? And when you advise somebody external, then you're not as influenced by your own biases, right? And, and you could do, you could do a better.

• 31:45Shane Parrish?

  So you have more of an outside view than an inside view?

• 31:48Speaker 01

  That's right, exactly. Another one is to, is to think about something in the long term, right? Is to say, what would happen if you had to make a decision about a thousand of those things? Right? What decision would you make, right? It's sometimes easy to say, oh, I'm making this just for one time, but you say, oh, what if this was the kind of standard decision that you would, you would make? And then the third one is to say, what would happen if this was a larger decision? Would you still make the same one? Right? So by, by both thinking about it not as a one time, but as a multiple time and not as a small decision, by a large decision, you're bringing into context that is more, more extensive and you're less likely to basically give yourself a discount and say,

• 32:32Speaker 01

  we're just doing it for one, for once.

• 32:36Shane Parrish?

  And all of that is aimed to you basically switching a little bit from maybe your subconscious defaults to more of a conscious state of mind. One of my favorite things that you ever did that I remember is pluralistic ignorance.

• 32:54Speaker 01

  Yes.

• 32:55Shane Parrish?

  Can you explain this to me?

• 32:58Speaker 01

  So pluralistic ignorance is the idea that when we are in the company of other people and we look at the behavior of other people as indicating what the right thing to do is and what other people are knowing and therefore we interpret our own behavior in that way. So here's the classic example. You put people in a room and you fill the room with smoke. And when there's one person in the room, you measure how long does the smoke coming from the vents get the person to say, "Okay, time to leave, something bad is happening."

• 33:31Shane Parrish?

  Yeah.

• 33:32Speaker 01

  And then you increase the number of people in the room. And what happened is that when you increase the number of people in the room, the smoke comes from the vents and people look at other people and they say, "Oh, everybody else is sitting." I'm sitting too, but I'm sitting because I don't know what to do. Other people are sitting probably because they know that nothing really bad is happening and therefore people just stay there for much, much longer. So we look at the behavior of other people, we say, "We are confused, we're not sure what to do. Other people know what to do, other people are not acting because they don't want to act. It must be that this is the right thing and therefore let's do the same." And I try to do this in the first day of my class. So when I teach a small class, there's no problem.

• 34:16Speaker 01

  But when I teach a large class, the problem is that people don't ask questions. And you know, you look at everybody else and you say, "Nobody else is asking a question." It must be that other people understand this. So I start the class by taking a paragraph from some postmodern literature text generator, something, you know, crazy that you don't understand what's going on. Every sentence looks like it's constructed appropriately, but there's no flow, there's foucault and de Rida from time to time. And I just add some words about economics and behavioral economics and Becker from time to time. And I just read this for five minutes. And you know, and it's the first class, it's first class.

• 35:01Speaker 01

  People sit in, 500 students, and I say, "Let me start by explaining to you what behavioral economics is." And then I just read this nonsense for five minutes. And then I stop and I say, "Why didn't you stop me?" And I said, how many of you would would have stopped me if there was like only one person in the room? Right? If you were sitting with me in the room, everybody would have stopped me on sentence two and say, what are you, what are you thinking? And so anyway, so that's my attempt to teach them about pluralistic ignorance and to get them to ask me more questions. And I say, you know, if you don't understand something, don't look at other people, just ask. Assume that you'll help other people, that other people don't understand just as much as you do. So the moment you don't understand something, just ask.

• 35:42Shane Parrish?

  I feel like I lived that when I worked in an organization at least once a day in a meeting where you would get out and everybody would go, I have no idea what just happened there. And everybody in the meeting is thinking the same thing, but nobody.

• 35:54Speaker 01

  Yes, has the guts to do this.

• 35:56Shane Parrish?

  Nobody has the guts to do it. Wh- what would you say is a good tip or trick that we can use to prompt ourselves, maybe to do that, or if you're facilitating a meeting to check in with people?

• 36:09Speaker 01

  Yeah. So, so a couple of things. So one is to say, this is the trick I sometimes use. I say, I try to blame it on my Israeli heritage. And I basically, sorry, maybe this is inappropriate to say, but you know, I'm from Israel. I don't know exactly the rules. And then I ask something. Right? So it's not me. It's it's a different, it comes from a different reason. Don't blame me for doing this. And another thing that I do, this is a very different situation. I like rules. I like having rules because rules make us not think about each case specifically.

• 36:52Speaker 01

  Right? And so one of my rules is when I see people in a party that have something green in their teeth, I tell them. Right? Like if somebody has spinach in their teeth, I tell them. And you know, I don't want this situation every time. Should I tell them? Should I not tell them? I just said, let's have a rule and I always tell them. And I always tell them I have a rule. So I say, excuse me, I have a rule that when I see people with spinach in their teeth, I tell them that they have spinach in their teeth and you have something in your teeth. And by the way, a hundred percent of the time, people are happy with this with this comment because they prefer to know than not to know. But but having rules actually protects us. Right? Imagine you invited me to do something and I said, I'm sorry, I have a rule.

• 37:37Speaker 01

  I don't give more than ten talks a year, or I don't do X or Y or Z. And you would not feel good saying, oh, would you please break your rules one, once for me? Right? The moment you have a rule, you basically are elevating something for, for yourself and for other people. You're creating a standard from it and it, it helps you protect yourself. So if you think about religions, right? Religions basically function like, I mean, they, they create rules and, and that's incredibly important for, for the survival of the decision. So I think we do need, we do need to think about the areas in our lives when we don't behave well and try to create rules for them.

• 38:16Shane Parrish?

  Why rules and not habits?

• 38:18Speaker 01

  Okay, so, so habits, so actually you can think about habits, rules and rituals as a continuum. And, and habits are those things that we do without thinking, right? When you think about the standard definition of a habit is something you do without, without thinking. So you, um, bite your nails or, uh, you know, slouch or whatever, whatever it is. And you can't have a habit of running, right? You don't go running and then you say, oh, where am I? I have no idea I was, I was running. So, so for things that are deliberate and take actions, you need, you need something more than a habit. But now you have rules and you have rituals and, and there are differences between them.

• 39:00Speaker 01

  And rituals basically create a higher order meaning. And so actually both rules and rituals have one nice feature, which is that violating them one time violates the principle. Right? So imagine you have a rule that says, I always recycle. If you always recycle, one day not recycling is breaking your rule. Or think about somebody like a vegetarian. If you're a vegetarian, you know, you never eat meat. It's not that you say, I mostly don't eat meat. You create this rule that says, I never do, I always do. That helps you understand better where you are on, on this, on this range. And it helps you live according to your, your standards.

• 39:45Speaker 01

  So if you said, for example, I'm going to eat dessert on only one out of every four days, odds are that you would cheat yourself, that you will end up eating more dessert than you wanted. But if you had a rule that says, I never eat dessert, or I only eat dessert on Saturday, that will be easier for you to to keep it.

• 40:05Shane Parrish?

  Yeah.

• 40:06Speaker 01

  And then the most interesting one is rituals, where rituals are, it's not, the the behavior itself is, becomes rewarding. Right? So if you think about ritualistic hand washing, for example, or whatever it is, and you don't have to wait for the outcome, but the the ritual itself makes the behavior better.

• 40:31Shane Parrish?

  I think I've seen that with, just anecdotally with friends who, the difference between people who say, oh, I'm trying to eat healthier versus I don't eat dessert. And then, so if you're saying you're, you don't, you know, you're trying to eat healthier, then every time you have to make this decision to eat healthier. Whereas if your rule is, I don't eat dessert, it's almost like the decision is made for you and then your your default path changes and you have to make the exception to it.

• 41:01Speaker 01

  Exactly. And tha- and that's why it's so much easier, right? So so whenever, whenever you can create a rule for behavior, and even even if you give up some flexibility, it's probably a good idea.

• 41:14Shane Parrish?

  What's your take on the field of evolutionary psychology? The group of ideas that try to derive an evolutionary understanding of why we do the things that we do and think the things that we think? Has it been illuminating to you?

• 41:29Speaker 01

  So, so I think the the answer is absolutely yes. I think, you know, there's, there's no question that, you know, we've evolved. There's a lot of question, biology plays a big part in our psychology, in our behavior, in our drives. And so I think it's incredibly interesting and incredibly important. The the challenge is that some of the things are just really hard to study from an evolutionary psychology perspective, right? So we can, we can speculate, but. You know, for for finches Darwin had sixteen types. So he had a whole range of them and you could evaluate them. If you look at the ratio between, I don't know, what testicle size and promiscuity. There's lots of animals, you can you can look at a lot of them.

• 42:14Speaker 01

  But when you look at behaviors that are uniquely human, we just don't have that variance, we just don't have the range. So it's much, much harder to to to to make any point in a satisfactory way. So I would say that some of it is very convincing. Some of it is a really interesting source for hypothesis and ideas. But as science, it doesn't always excite me.

• 42:40Shane Parrish?

  Switching gears a little bit, just because I know we're time constrained here. What what do you read yourself besides literature relevant to your work? What would I find on your nightstand?

• 42:51Speaker 01

  So right now, I'm reading a book called Sex Before Dawn. Have you read this book?

• 42:58Shane Parrish?

  No.

• 42:59Speaker 01

  I highly recommend it. It's a it's a book that really talks about the evolution of humanity and the role of the agricultural revolution in our in our in our behavior. And what they're emphasizing a lot, sexual behavior. But the book basically says that before the agricultural revolution, we didn't care so much if it was my kids or your kids or how it how it worked. And then we got the agricultural revolution and then we had mine and yours. All of a sudden, there was territory, there was property. And property became incredibly important.

• 43:42Speaker 01

  And now we had men and women and kids and our kids and not kids. And I'm thinking about this with the new rules about inheritance and, you know. So the way the the reason this book has been important for me is to think about property.

• 43:58Speaker 01

  And you know, we had this obsession with property. Like if somebody is on their, they're starving. They're not allowed to break and enter and steal something to eat. Right, so somehow in the hierarchy of what we hold sacred, dying from hunger or being hungry is not as important as keeping property. And you know, and how did we, how did we get there that property is so, so central? Um, so, so that, that book has been really interesting for me in terms of kind of thinking about how we got to this world where property is so central and important? And can we get out of this, right? Is this the right, is this the right approach?

• 44:41Speaker 01

  And I, I met with somebody recently who told me that, you know, our kids are our kids, but if we mistreat them, the state can come and take them away from us. But our house is our house and we can mistreat it any way we want and nobody can take it away from us. And you know, it's, it's kind of interesting, you know, with kids, we, we don't view ourselves as owners of the kids. We, we view ourselves as the caretakers of the kids. Uh, but with property, we are the, the owners and rather than the caretakers. And, and should we, should we think about, you know, think about people who come to great wealth? Are they the owners of that property or they're the caretakers?

• 45:22Speaker 01

  Uh, people who have, I don't know, an amazing estate with woods and so on. Are they the owners or the caretakers? What, where, where are the boundaries of those things? So anyway, so that, that for me was a really interesting, uh, book and got me to think a lot about property. And I'm not sure what I'll do with it, but I'm, I'm thinking a lot about it.

• 45:42Shane Parrish?

  Did, did it change how you think about intellectual property at all?

• 45:46Speaker 01

  Uh, I haven't, I haven't thought about intellectual property, but, um, and intellectual property is very tricky. I can see both, I can see both ways. Um. You know, I I personally don't mind so much when people download illegally stuff that I that I did, because, you know, I have a income as a university professor. But I think it's bad for society, because less and less people are able to make a living based on on things they create as intellectual property. So so I can see I can see both ways. I'm I'm not sure on intellectual property, I'm not sure where the lines stand.

• 46:26Shane Parrish?

  How do you juggle all of this? I mean, you're speaking, you're writing, you're teaching, you're doing research, you're running a lab. How do you how do you organize that? How do you keep that all together?

• 46:38Speaker 01

  So so one thing I don't, I I I work very hard, I don't necessarily keep it in order, and I I have I work with amazing people. So one of my rules is to only work with people I love. And when when I when I meet people I really like, I usually just hire them, and then I worry less about what to do with them. Like, you know, I don't I usually don't have a project, and I say, I need somebody with skill X.

• 47:08Shane Parrish?

  Hmm.

• 47:09Speaker 01

  I usually meet somebody I really like, I say, I really want to work with this person, let's start working with them, and we'll figure out what to do with them. And and because of that, the the group of people I work with are just incredible fit for me, right? I think they're incredible individuals, and and it's a it's a joy, and there's never a day that I'm not happy to to see them, and they're also incredibly capable and getting better and better all the time. So I my style of running, for example, the research lab, we're about forty people here. My style is to hire very good people, and to tell them that I'm here when they need me, but I don't need to supervise them.

• 47:52Shane Parrish?

  Hmm.

• 47:53Speaker 01

  So I say, when you need me, I'm here, I'm I'm at your disposal, I'm I'm at your service, rather than you at my service.

• 48:01Speaker 01

  And when you need me, just let me know. Uh, but when you're able to do things without me, just go for it.

• 48:08Shane Parrish?

  Has that always worked out?

• 48:10Speaker 01

  Um, not always, but I would say almost always. You know, you have a couple of glitches from time, from time to time. Uh, but, but mostly, mostly things are working incredibly well.

• 48:24Shane Parrish?

  If I were to ask your best friend, what holds you back, how would they respond?

• 48:28Speaker 01

  Uh, what holds me back?

• 48:30Shane Parrish?

  Yeah.

• 48:31Speaker 01

  Uh, they would probably say sleep.

• 48:34Shane Parrish?

  You're not a big sleeper?

• 48:36Speaker 01

  Well, you know, that's, I, I, I, I'm not the big sleeper, but that's, that's the. I don't sleep a lot, but, oh, you mean, what do I need more of? Because, you know, if, if I had two more hours of work a day, I'm saying, if I could reduce sleep. What, um, so I think, um.

• 48:54Speaker 01

  What are the things that are holding me back? I think just really, uh, uh, not, not much. Uh, uh, I, I, I would say that, um, you know, I've, I've, I gamble with my time a little bit. So, you know, I get lots of requests to do things. Today, I think I got four requests to give talks in different places. And, and one of the things I do is I take risks. I, I do things that, you know, don't seem like they're the right thing to do. Uh, but that they don't maximize anything logical or rational or so on. And, and from time to time, those things turn out to be incredibly interesting and worthwhile.

• 49:37Speaker 01

  And, uh, and I get this positive feedback loop of gambling with my time and things are successful. And then I gamble with my time some more and, and, and so on. So, uh, I think, I think I take, I take lots of risks with my time. And to so, mostly takes, it mostly pans out well.

• 49:56Shane Parrish?

  Are those, how do you think about those risks? Are they time boxed? Are they like, how do you juggle opportunity cost?

• 50:03Speaker 01

  Yeah, not, not very well. So, so I do, I do play some wild cards. Next, uh, month, uh, somebody invited me to come and, uh, paint me. An artist I made, so I met and she's going to make a painting of me and she's become a very, very creative artist in my, in my mind. So, you know, it's not that I don't have anything to do and I don't have plans to be in L A that day, but you know, I'm going to try it out and see what I can learn about, about art. Or, you know, in payoff, in this little Ted book I wrote, I, I wrote about all kinds of injured people who, who write me.

• 50:46Speaker 01

  And, you know, in the last two years, I, I'm not just responding to people with injuries who write me, but I also went to spend a day with people with different injuries. Right? And it's not, it didn't start with, it, it's not the kind of research I know how to do. It's not small lab scale studies. But I went ahead and I spent a day with people with different injuries and I didn't know where exactly it would lead. And it was difficult and painful and some of it was inspiring, but I was on this journey on trying to learn and understand what resilience is.

• 51:24Speaker 01

  So, I basically kind of take invitations for, for different things and, and see where, where it leads me. And, and I, I do have to say that in, in most cases it has been, you know, sometimes it's been just a day or a flight or something. I say, okay, you know, that was it. And sometimes it leads to something more interesting down the line.

• 51:45Shane Parrish?

  What did you learn about developing resilience?

• 51:49Speaker 01

  Okay, that's a, that's a long story, but I'll give you the short version of it. The, the short version of it is that the, the people that I think are incredibly successful are people who create a short-term goal that they can measure and see progress on.

• 52:08Speaker 01

  So for example, there's a guy called Ryan. He became a quadriplegic after a bicycle accident. And he basically asked his caretaker to put his clothes on the floor. And he kind of wiggles himself into his clothes. And it can take him up to forty-five minutes. And he measures how long it takes him. And when he makes it in below forty-five minutes, he feels successful. And when he takes him longer, he feels unsuccessful. And then he reexamined his strategies. And, and you could say, you know, couldn't he just get somebody else to, to dress him? And the answer is absolutely yes, but no. It's, it's part of his daily challenge.

• 52:50Speaker 01

  It's how he defines his day and what he's able to do. And it's not just daily, but he gets to see a sense of progress and some, some control. So, so that's, that's a, that's an example.

• 53:05Shane Parrish?

  I want to end with, what message would you like all of your students to take away? If you could have one message that they all walked away with and all thought about in the same way? What would that be? What would you tell them? What would you hope that they take away from your teachings?

• 53:21Speaker 01

  Can I do, can I do two?

• 53:23Shane Parrish?

  Of course.

• 53:24Speaker 01

  Okay. So, so the first one would be to, to take this idea of redesign the environment very seriously. Right? Don't be a slave to the environment that somebody else created for you. And redesign the environment that is most likely to yield good, good results. And this includes productivity and health and, and money and so on. And, and the second one would be to doubt your intuitions. You know, we often make decisions. We, we have to admit that most of the decisions we make are not based on data. They're based on intuitions. Here's what I think would happen. And it's not healthy psychologically to doubt your intuitions all the time.

• 54:08Speaker 01

  But it's really important to have a, a sense of questioning your intuitions from time to time. And if you could do that, I think we could do, we could do much better. So those would be my, my two choices.

• 54:23Shane Parrish?

  I love that. Thank you so much, Dan. This has been a great conversation.

• 54:27Speaker 01

  My pleasure. Lovely.

• 54:33Shane Parrish?

  Hey guys, this is Shane again. Just a few more things before we wrap up. You can find show notes from today's show at fs.blog/podcast. You can also find out information on how to get a transcript there. And if you'd like to receive a weekly email from me filled with all sorts of brain food, go to fs.blog/newsletter. The newsletter is all the good stuff I found on the internet this week that I've read and shared with close friends, books I'm reading, and so much more. Lastly, if you enjoyed this or any other episode of The Knowledge Project, please consider subscribing and leaving a review. Every review helps us make the show better, expand our reach, and share our message with more people. And it only takes a minute. Thank you for listening and being part of the Farnum Street community.