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I'll tell you a little a bit about irrational behavior --
I want to talk about one particular problem which is self control.
There were two sisters, in Northern Carolina,
the Delaney sisters,
and when the youngest of them got to be 100 years old
they asked her "What was your secret for longevity?"
-- they had an interview with the New York Times --
"What was your secret for longevity?"
and they said they had two secrets.
The first one was that they said they decided never to get married.
They said they did not want a husband to drive them to an early grave.
And my wife is sitting here
so I am going to skip this particular insight,
but the second thing they said was that they did not want to go to hospital
because hospital is a place where you get diseases.
And there is a lot of wisdom in what they said.
I was in hospital for a very long time
and like many other people I got some new diseases
while in hospital.
I got burnt, I was in the burn department,
but I got an infected blood transfusion
and I got a disease as a consequence of that.
It's bad enough to be in hospital, in general,
it's worse to get a liver disease
it would affect my recovery, it'd slow down the operation,
it rejected transplants, all kinds of bad things,
but it was also the case that the doctors didn't know where it came from.
They didn't know what was the essence of the problem.
Fast forward years from time to time my liver would act up,
about seven years later I have some kind of episode.
I check myself into hospital and they tell me the good news:
they know what the problem is, it was hepatitis C.
It that was a particular virus that I got at the time
and they did point they had -- they've isolated the problem
and not only that. It that was a new FDA trial for that;
they were trying a new medication
call Interferon, to see whether this would work on hepatitis C.
And they ask me whether I want to join the clinical trial.
And of course I wanted to,
who would want to die from liver cirrhosis?
So I join this trial,
and what they told me when I joined
was how annoying and difficult Interferon really is.
And here was that -- for me these injections of Interferon
kind of symbolize the complexity of human life.
Imagine that you are standing there with an injection,
and you have to inject your thigh
three times a week, for a year and a half.
And you knew that if you did it for a year and a half,
you might not have liver cirrhosis 30 years from now.
But you also knew that if you did it right now,
you will be really miserable for the next 16 hours:
vomiting, headache, fever, shaking,
now think for a second whether you would do it?
Like, would you do that? Would you be able to take on
the short terms consequences of a loss,
for a potential probabilistic long term gain?
If you think about it this is kind of an ancient problem
for human behavior: It's this question, Adam and Eve.
You would say:
"Who would give eternity in the garden of Eden for an apple right now?"
It seems crazy!
But here's the modern version of this question.
"Who in their right mind would risk their life while texting?"
Please rise your hands if you have texted while driving.
I'm guessing that most of the rest of you are just lying!
There was a study a couple of weeks ago that asked the question of
"What happens in states that restrict texting while driving?"
Accident rate actually goes up! Why?
Because instead of texting like this, people start texting like this!
Anyway the problem is much more general
than texting. Right?
This is about health.
Think about dieting, really good for the long term,
not so fun right now.
Exercising, not so good now, good for the long term.
Financial savings, not fun now, good for the long term.
Safe sex! The same applies.
And it turns out that when we face these problems
we just fail regularly, systematically and consistently.
Here is one way to think about it.
Imagine I offered you a choice between half a box of chocolate right now
and a full box of chocolate in a week.
Half a box of chocolate now, and a full one in a week.
And imagine that you actually have a sample.
So it's not just hypothetical,
but you could see it and smell it and feel the chocolate.
Under those conditions,
how many of you would wait another week for another half of a box of chocolate?
Rise your hands. Ok! We have a few patient people here,
maybe 20% and I am sure if it would be for real there would be less of you that would be --
-- but the majority said, "Give me the chocolate now!"
Now imagine I push the choice to the future,
and I said what would you rather have,
half a box of chocolate in a year,
or a full box of chocolate in a year and a week?
Now, notice it's the same question,
it's the question whether you are willing to wait another week for another half a box of chocolate.
How many people now are willing to wait?
--because in the future we are wonderful people!
We will exercise, we will diet, we will save!
The problem of course is we never live in the future.
We always live in the present. And in the present, we are very, very different people.
Fast forward, I took these injections for a very long time,
and it was a very miserable period of my life,
and when I finished, the doctors told me two things.
First of all they said that the medication worked,
it eradicated the virus from my system. That was good news!
The second things they said was that in this whole FDA protocol,
I was the only patient who took their medication on time.
The question is, how could I do it?
Do I have better self-control, do I look better to the future than other people?
Do I care more?
And the answer is none of those!
The answer is that I designed a trick for myself.
And my trick is based on the fact that I love movies.
If I had time, I would watch lots and lots of movies,
sadly I don't have that much time.
So I basically had a deal with myself, that I'd only watch movies after I inject myself.
So on Monday, Wednesday, Friday, which were injection days,
I would go to school, I would stop on the way to a video store,
I would rent some videos I really wanted to watch,
I would carry them in my backpack the whole day anticipating watching them,
then I would get home in the evening, I would put a video in,
I would inject myself, I would get a bucket and a blanket for the side effects,
I would inject myself and start watching the video immediately.
Now if you think about it this is kind of a strange idea.
'Cause if you think about things in life that are important or not,
livers are really important. (Laughs) It's somewhere up there.
Injections, side effects: not that important in the big scheme of things.
Movies are even less important!
So what happened?
The problem is that we see the problem, we see the world,
it's not like this, it's not that we say
that livers are important and side effects are not,
we also have a time horizon for this.
And when we add a time horizon,
because livers are important but they are far in the future,
we discount them dramatically, like we did for the chocolate in a week.
And because the injections are now, we exaggerate their importance dramatically.
So let's think about it, did this trick with the movie
help me care about my liver,
did I wake up every morning, feeling energized to do something about my liver?
No! I did what we call reward substitution,
I replace the liver with movies.
I started behaving as if I cared about my liver.
I cared about it because there was something else in the way
that was immediate and appealing.
And even though it was not as important as the liver,
it became a substitute for the reward.
Now, the reality is that we face problems
with self-control all the time,
all these problems I describe are really basic human problems.
Can we get people to wake up in the morning and feel energized about solving these problems?
Can we use reward substitution? Maybe.
Think for example about something like global warming.
If you were going to design the problem that people would not care about,
it would be global warming.
It has all the elements for human apathy.
Long term in the future, will happen to other people first,
we don't see it progressing, we don't see any other individual suffering,
and anything we would do is a drop in the bucket!
All the elements that create human apathy rolled into one!
Can we get people to wake up in the morning and feel energized about global warming?
Maybe a very few fraction.
But perhaps the key is in creating reward substitution!
Getting people to care about other things that would be linked to behaving well,
and getting people to behave nicely for the wrong reasons.
So, if we think about self-control I told you a little bit about reward substitution,
I want to tell you about one other approach.
And this is what I'd call self-control contracts or the Ulysses' contracts.
So if you remember the story about Ulysses and the sirens,
Ulysses knew that if the sirens would come he would be tempted.
So, he tied himself to the mast, he got the sailors to put earplugs in their ear,
so even if the sirens would come he would not be able to be tempted.
That's a different version of the self-control mechanism,
and it's quite more sophisticated!
It says, "We know that when the time comes, we will be tempted,
so we are going to do something now that would eliminate temptation from our path".
Imagine for example that you go to a restaurant,
and you've vowed to be on a diet.
What are the odds
that if the waiter comes with chocolate soufflé,
you will resist temptation?
Not very high!
Would you be willing to do a Ulysses contract, which is to say to the waiter:
"Here is a dollar, don't show me the dessert tray."
Before we look at this, let's go back for a second,
and think about whether animals can do that.
So imagine you are a pidgeon or a rat,
and imagine that you learn two things.
You learn that the green button,
means one pellet of food immediately,
and the purple button means 10 pellets of food in 10 seconds.
So you learn this one, you learn this one, now we put them together.
The question is,
you are a rat or a pidgeon, what would you choose?
And just to kind of get a feeling of scale, for a rat 10s is like a week for us.
What do you think they choose?
They choose the green one.
Sadly, they take the 1 pellet, they forego the 10 pellets.
It gets slightly worse, you start the trial,
the purple button comes up, some times passes
and then the green button appears.
If the rat or the pidgeon can just hold off, they can just sit on their hands,
they can wait, they can distract themselves,
they would get 10 pellets of food.
They press the green one and they forego the 10 pellets of food.
But here is kind of a good news!
The good news is that if you introduce a red button,
and the red button is not connected to food,
and pidgeons and rats don't like pressing them,
but the red button is going to eliminate the appearance of the green button.
The purple button appears, they press on it, the red button appears.
If the rat or the pidgeon would press that,
the only thing that would happen is temptation would not come!
What do you think? Do they do it?
They do it!
Not all the times, but they do it quite often.
And I think that's very optimistic because if they can do it,
you know -- maybe -- we can do it too!
So here are a couple of examples.
This is a clock that one of students in the Media Lab has designed.
It's called Clocky. It has two big wheels as you can see,
and when the alarm starts it also starts running in the room.
Now here is what happens!
When you go to sleep, in your mind, you are the kind of person
who wakes up at 6 o'clock in the morning and goes for a run
before going to the office or to school.
When you wake up at 6 in the morning you are not the same person, (Laughs)
you are a person that stays in bed until 8.30, you know,
thinks about running the next day. (Laughs)
This clock eliminates this problem, because if you set it up the night before,
the next morning you have to get up!
The clock is hiding, under some table,
it's running around, there is no way not to do it.
Here is another one, this was a really interesting idea
that never took off commercially,
but I really like it, it's called "snooze and loose"!
It's an alarm clock that is connected to your bank account --
-- and you also connect it to a charity you hate.
Every second between the time the alarm starts on
and the time you turn it off,
your money goes to a charity you hate. (Laughs)
Now imagine trying to snooze under those conditions!
Another example is "Stikk".
Stikk is a really nice website
that allows people to create self-control contract
between themselves and other people,
people they like and don't like, organizations...
You can control how much Facebook you see
and how much emails and how much you eat,
and all kinds of other things.
Another interesting website is this one,
it's a software that people can download to their computers
and then they assign it to other people and it tells those other people,
whenever that person looks at pornographic material online.
It also tells the other people if you uninstall the software.
So what is the point?
The point is that temptation is everywhere!
We are kind of designed not to be able to think about our long term longevity,
and that's very sad,
that's kind of Adam and Eve problem.
And it would be nice if we could all design
our own instruments to overcome this problem.
It would be nice if we all could come up with the Ulysses solution for that.
The problem is we can't all do that, it's not as easy, it's not so simple!
Luckily, I think there is kind of the good news about it,
it's we can create other mechanisms.
We can create things like Clocky, we can create things like Stikk,
we can actually create interfaces and mechanisms that would help people
to achieve and to live like we want to live in the long term.
I give you one example like this that we have tried out.
So it turns out that in the history of mankind, no man has ever woken up
and said: "Today I feel like colonoscopy!"
Some of you know the feeling more than others,
and it turns out that what do men do
if they wake up and today is the day for colonoscopy?
They make up other things to do!
"Oh, I am really busy in the office".
"I don't feel so well",
and everybody suffers, the health care system suffers,
the individual suffers and this is not really good.
Imagine I gave you a Ulysses solution type of mechanism!
Imagine I told you,
"Look I am scheduling for you a colonoscopy, on December 15th,
and I am giving you an option now, to write me a check for 500 dollars.
Now if you show up on time I will give you the money back,
if you don't show up on time I'll take the money away from you!"
Now, what would happen?
If you write me the check, it's because you understand that on December 15th,
you will wake up not feeling like going, but you also understand
that you would hate to give up this money.
And the more money you would give me the more you would hate
not to show for the appointment,
and there is a lot of mechanisms like these,
and a lot of opportunities for people to basically create conditions,
that will force us to behave in the long term in the way we want to behave.
So that's what it is, what it's all about!
I think there are free lunches.
You know that this expression,
"There are no free lunches."
And the expression, "There are no free lunches" is based on the idea that everybody is optimal,
everybody is already doing the rational things.
But what if we are not doing the rational things?
What if we are systematically wrong?
What if we have systematic biases?
It means that there are ways, there are mechanisms,
there are things that we can do to get everybody better off
we can get individuals better off:
we can get health care system off,
we can get the relatives off and other things
that are the big hopes of behavioral economics.
By understanding how people are wrong,
we can try and think about how to fix the world.