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How to change your behavior for the better

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    Hi.
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    You might have noticed
    that I have half a beard.
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    It's not because I lost a bet.
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    Many years ago, I was badly burned.
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    Most of my body is covered with scars,
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    including the right side of my face.
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    I just don't have hair.
    That's just how it happened.
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    It looks symmetrical, but almost.
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    Anyway, now that we discussed facial hair,
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    let's move to social science.
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    And in particular, I want us to think
    about where is the potential for humanity
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    and where we are now.
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    And if you think about it,
    there's a big gap
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    between where we think we could be
    and where we are,
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    and it's in all kinds of areas.
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    So let me ask you:
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    How many of you in the last month
    have eaten more than you think you should?
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    Just kind of general. OK.
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    How many of you in the last month have
    exercised less than you think you should?
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    OK, and for how many of you
    has raising your hands twice
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    been the most exercise you got today?
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    (Laughter)
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    How many of you have ever
    texted while driving?
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    OK, we're getting honest.
    Let's test your honesty.
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    How many people here in the last month
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    have not always washed your hands
    when you left the bathroom?
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    (Laughter)
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    A little less honest.
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    By the way, it's interesting how we're
    willing to admit texting and driving
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    but not washing our hands,
    that's difficult.
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    (Laughter)
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    We can go on and on.
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    The problem, the topic is
    that there's lots of things
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    when we know what we could do --
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    we could be very, very different,
    but we're acting in a very different way.
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    And when we think
    how do we bridge that gap,
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    the usual answer is, "Just tell people."
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    For example, just tell people
    that texting and driving is dangerous.
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    Did you know it's dangerous?
    You should stop doing it.
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    You tell people something
    is dangerous, and they will stop.
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    Texting and driving is one example.
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    Another very sad example
    is that in the US,
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    we spend between seven
    and eight hundred million dollars a year
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    on what's called "financial literacy."
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    And what do we get
    as a consequence of that?
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    There was recently a study that looked
    at all the research ever to be conducted
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    on financial literacy --
    what's called a meta-analysis.
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    And what they found is that
    when you tell people,
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    you teach them financial literacy,
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    they learn and they remember.
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    But do people execute? Not so much.
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    The improvement is about
    three or four percent
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    immediately after the course,
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    and then it goes down.
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    And at the end of the day,
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    the improvement is about 0.1 percent --
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    not zero, but as humanly close
    to zero as possible.
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    (Laughter)
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    So that's the sad news.
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    The sad news is, giving
    information to people
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    is just not a good recipe
    to change behavior.
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    What is?
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    Well, social science
    has made lots of strides,
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    and the basic insight is that
    if we want to change behavior,
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    we have to change the environment.
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    The right way is not to change people,
    it's to change the environment.
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    And I want to present a very simpleminded
    model of how to think about it:
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    it's to think about behavioral change
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    in the same way that we think about
    sending a rocket to space.
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    When we think about
    sending a rocket to space,
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    we want to do two main things.
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    The first one is to reduce friction.
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    We want to take the rocket
    and have as little friction as possible
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    so it's the most aerodynamic possible.
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    And the second thing is we want
    to load as much fuel as possible,
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    to give it the most amount
    of motivation, energy to do its task.
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    And behavior change is the same thing.
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    So let's first talk about friction.
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    In this particular case study
    I'll tell you about,
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    there's a pharmacy, an online pharmacy.
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    Imagine you go to your doctor.
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    You have a long-term illness,
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    your doctor prescribes
    to you a medication,
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    you sign up for this online pharmacy
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    and you get your medication
    in the mail every 90 days.
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    Every 90 days, medication,
    medication, medication.
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    And this online pharmacy
    wants to switch people
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    from branded medication
    to generic medication.
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    So they send people letters, and they say,
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    "Please, please, please,
    switch to generics.
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    You will save money, we will save money,
    your employer will save money."
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    And what do people do?
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    Nothing.
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    So they try all kinds of things
    and nothing happens.
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    So for one year, they give people
    an amazing offer.
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    They send people a letter, and they say,
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    "If you switch to generics now,
    it will be free for a whole year."
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    Free for a whole year. Amazing!
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    What percentage of people
    do you think switched?
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    Less than 10 percent.
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    At this point, they show up to my office.
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    And they come to complain.
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    Why did they pick me?
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    I wrote a couple of papers
    on the "allure of free."
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    In those papers, we showed
    that if you reduce the price of something
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    for, let's say, 10 cents to one cent,
    nothing much happens.
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    You reduce it from one cent to zero,
    now people get excited.
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    (Laughter)
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    And they said, "Look, we read these
    papers on 'free,' we gave 'free.'
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    Not working as we expected.
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    What's going on?"
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    I said, "You know, maybe
    it's a question of friction."
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    They said, "What do you mean?"
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    I said, "People are starting with branded.
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    They can do nothing and end with branded.
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    To move to generic, they have to choose
    generic over branded,
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    but they also have to do something.
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    They have to return the letter."
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    So this is what we call
    a "confounded design."
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    Two things are happening at the same time.
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    It's branded versus generic,
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    but it's doing nothing
    versus doing something.
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    So I said, "Why don't we switch it?
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    Why don't we send people a letter
    and say, 'We're switching you to generics.
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    You don't need to do anything.
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    If you want to stay with branded,
    please return the letter.'"
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    (Laughter)
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    Right?
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    What do you think happened?
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    Lawyers, lawyers happened.
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    (Laughter)
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    It turns out, this is illegal.
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    (Laughter)
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    By the way, for brainstorming
    and creativity,
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    doing things that are illegal
    and immoral, it's fine,
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    as long as it's just
    in the brainstorming phase.
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    (Laughter)
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    But this was the purity of the idea,
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    because the initial design was
    the branded had the no-action benefit.
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    In my illegal, immoral design,
    generic had the no-action benefit.
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    But they agreed to give people
    a T-intersection:
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    send people a letter and say,
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    "If you don't return this letter,
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    we will be forced
    to stop your medications.
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    But when you return the letter,
    you could choose branded at this price,
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    generic at this price."
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    Now people had to take an action.
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    They were on even footing. Right?
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    It wasn't that one had
    the no-action benefit.
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    What percentage do you think switched?
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    The vast majority switched.
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    So what does it tell us?
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    Do people like generics,
    or do we like branded?
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    We hate returning letters.
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    (Laughter)
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    This is the story of friction:
    small things really matter.
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    And friction is about taking
    the desired behavior
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    and saying: Where do we have
    too much friction
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    so it's slowing people down
    from acting on it?
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    And every time you see
    that the desired behavior
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    and the easy behavior are not aligned,
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    it means we want to try and realign them.
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    That's the first part.
    We talked about friction.
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    Now let's talk about motivation.
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    In this particular study,
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    we were trying to get very poor people
    in a slum called Kibera in Kenya
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    to save a little bit of money
    for a rainy day.
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    You know, if you're very, very poor,
    you have no extra money,
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    you live hand to mouth,
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    and from time to time, bad things happen.
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    And when something bad happens,
    you have nothing to draw on, you borrow.
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    The Kibera people can borrow at sometimes
    up to 10 percent interest a week.
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    And then, of course,
    it's really hard to get out of it.
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    You live hand to mouth,
    something bad happens,
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    you borrow, things get worse
    and worse and worse.
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    So we wanted people to keep
    a little bit of money for a rainy day.
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    And we thought about
    what is the motivation,
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    what is the fuel that we need to add?
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    And we tried all kinds of things.
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    Some people, we texted them
    once a week and said,
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    "Please try to save 100 shillings" --
    about a dollar -- "this week."
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    Some people, we sent a text message
    as if it came from their kids.
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    So it said, "Hi Mom, hi Dad,
    this is little Joey" --
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    whatever the name of the kid was --
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    "Try and save 100 shillings this week
    for the future of our family."
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    Right? I'm Jewish, a little bit
    of guilt always works.
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    (Laughter)
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    Some people got 10 percent.
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    "Save up to a hundred shillings,
    we'll give you 10 percent."
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    Some people got 20 percent.
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    Some people got also
    10 percent and 20 percent,
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    but they got it with loss aversion.
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    What is loss aversion?
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    Loss aversion is the idea
    that we hate losing
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    more than we enjoy gaining.
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    Now, think about somebody
    who is in a 10-percent condition
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    and they put 40 shillings in.
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    They put 40 shillings,
    we give them four more,
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    they say thank you very much.
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    That person gave up six.
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    They could have gotten six more
    if they gave a hundred,
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    but they don't see it.
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    So we created what we call pre-match.
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    We put the 10 shillings in
    at the beginning of the week.
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    We said, "It's waiting for you!"
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    And then if somebody puts 40 in,
    we say, "Oh, you put 40 in,
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    we're leaving four,
    and we're taking six back."
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    So in both cases, pre-match or post-match,
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    people get 10 percent.
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    But in the pre-match,
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    they see the money they did not match
    leaving their account.
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    So we have text, text from kids,
    10 percent, 20 percent,
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    pre-match, post-match.
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    And we had one more condition.
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    It was a coin about this size,
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    with 24 numbers written on it.
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    And we asked them to put the coin
    somewhere in their hut,
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    and every week, take a knife
    and scratch the number for that week --
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    week one, two, three, four --
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    scratch it like a minus
    if they didn't save
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    and scratch it up and down if they saved.
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    Now, think to yourself:
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    Which one of those methods
    do you think worked the best?
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    Text, text from the kids,
    10 percent, 20 percent,
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    beginning of the week,
    end of the week, and the coin?
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    I'll tell you what
    the average people think.
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    We've done these studies of prediction,
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    both in the US and in Kenya.
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    People think that 20 percent
    will get a lot of action,
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    10 percent less,
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    the rest of it will do nothing --
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    kids, coin, doesn't matter.
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    People think loss aversion
    will have a small effect.
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    What actually happened?
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    Sending a text reminder once a week
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    helps a lot.
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    Good news!
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    This program lasted six months.
    People forget. Reminding people is great.
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    Ten percent at the end
    of the week helped some more.
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    Financial incentives work.
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    Twenty percent at the end of the week --
    just like 10 percent, no difference.
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    Ten percent in the beginning of the week
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    helps some more.
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    Loss aversion works.
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    Twenty percent in
    the beginning of the week,
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    just like 10 percent in the beginning
    of the week, no difference.
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    And the text message from the kids
    was just as effective
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    as 20 percent plus loss aversion --
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    which is amazing, right?
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    It's amazing how motivating
    messages from kids were.
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    And one conclusion is
    we don't use kids enough.
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    (Laughter)
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    And, of course, I don't mean
    in a child labor sense.
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    But if you think about
    parents and their kids,
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    we are the best that we can for our kids,
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    and we think about the future,
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    and I think we should think
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    about how to use that amazing
    source of motivation
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    to get parents to behave in a better way.
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    But the big surprise
    of this study was the coin.
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    The coin basically doubled savings
    compared to everything else.
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    And now the question is: Why?
    What was it about the coin?
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    So I'll tell you how I started
    thinking about the coin,
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    and then we'll come back to it.
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    So you know, when I do research
    on, let's say, buying coffee,
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    I don't need to go anywhere.
    I can sit in my office.
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    I've bought enough coffee.
    I know how it works.
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    The details, I'm familiar with.
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    When you do research in some
    of the poorest places in the world,
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    you have to go and visit
    and see what's going on
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    and get some insight
    about how the system works.
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    And on that particular day,
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    I'm in a place called Soweto
    in South Africa,
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    and I'm sitting in a place
    that sells funeral insurance.
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    You know, in the US people spend
    crazy amounts of money on weddings?
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    In South Africa, it's funerals.
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    People spend up to a year
    or two years of income on funerals.
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    And I sit in this place --
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    by the way, before you judge the South
    Africans as being irrational with this,
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    I just want to remind you
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    that spending a lot of money
    on funerals compared to weddings,
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    at least you know for sure
    you only have one.
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    (Laughter)
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    OK, so I sit in this place
    that sells funeral insurance.
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    And this guy comes in with his son --
    his son is about 12 --
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    and he buys funeral insurance for a week.
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    It will cover 90 percent
    of his funeral expense
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    only if he dies in the next seven days.
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    Right? These are very poor people,
    they buy small amounts of insurance
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    and small amount of soap and such.
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    And he gets that certificate,
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    and in a very ceremonious way,
    he gives it to his son.
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    And as he gives it to his son,
    I think to myself, why the ceremony?
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    What is this father doing?
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    Now, think about the breadwinner
    that decides on that particular day
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    to direct some money
    into insurance or savings.
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    What is the family going to see tonight?
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    They're going to see less.
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    Right? At that level of poverty, there'll
    be less food, less kerosene, less water --
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    something less tonight.
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    And what his father was doing
    and what our coin was trying to do
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    is to say, yes, there's less
    food on the table,
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    but there's another activity.
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    You see, what happened is, there are
    many good, important economic activities,
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    like savings and insurance,
    that are invisible.
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    And now the question is:
    How do we make them visible?
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    So let's go back to our rocket model.
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    We have to, first of all,
    look at the system
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    and see where there's little things
    we can fix, with friction,
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    where is there
    that we can remove friction?
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    And then the next thing we want to do
    is to think broadly about the system,
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    and say: What other motivations
    can we bring in?
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    And that's a much more difficult exercise,
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    and we don't always know
    what would work best.
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    Is it going to be money?
    Is it going to be loss aversion?
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    Is it going to be
    something that is visible?
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    We don't know, and we have
    to try different things.
  • 14:18 - 14:21
    We also have to realize that
    our intuition sometimes misleads us.
  • 14:21 - 14:25
    We don't always necessarily know
    what would work the best.
  • 14:25 - 14:27
    So if we think about this gap
  • 14:27 - 14:29
    between where we could be
    and where we are,
  • 14:29 - 14:33
    it's a really sad thing to see this gap
    and to think about it.
  • 14:33 - 14:35
    But the good news is,
    there's lots we can do.
  • 14:36 - 14:39
    Some of the changes are easy,
    some of the changes are more complex.
  • 14:39 - 14:42
    But if we'll attack each problem directly,
  • 14:42 - 14:45
    not by just providing
    more information to people
  • 14:45 - 14:47
    but trying to change the friction,
  • 14:47 - 14:48
    add motivation,
  • 14:48 - 14:50
    I think we can ...
  • 14:50 - 14:52
    Can we close the gap? No.
  • 14:52 - 14:55
    But can we get much better?
    Absolutely, yes.
  • 14:55 - 14:56
    Thank you very much.
  • 14:56 - 15:00
    (Applause)
Title:
How to change your behavior for the better
Speaker:
Dan Ariely
Description:

What's the best way to get people to change their behavior? In this funny, information-packed talk, psychologist Dan Ariely explores why we make bad decisions even when we know we shouldn't -- and discusses a couple tricks that could get us to do the right thing (even if it's for the wrong reason).

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Video Language:
English
Team:
TED
Project:
TEDTalks
Duration:
15:13

English subtitles

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