Choiceology with Katy Milkman
Summary: Can we learn to make smarter choices? Wharton professor Katy Milkman shares stories of irrational decision making--from historical blunders to the kinds of everyday errors that could affect your future. Choiceology, an original podcast from Charles Schwab, explores the lessons of behavioral economics, exposing the psychological traps that lead to expensive mistakes. Season 1 of Choiceology was hosted by Dan Heath, bestselling author of Made to Stick and Switch. Podcasts are for informational purposes only. This channel is not monitored by Charles Schwab. Please visit schwab.com/contactus for contact options.
The rapid heartbeat. The shaking hands. The flushed face. The symptoms of pre-performance jitters are common. For some people, nervousness before a big test or important presentation is normal and temporary. For others, it can be debilitating. Typical suggestions for managing nerves tend to involve deep breaths and calming thoughts. But what if there were a better way? In this episode of Choiceology with Katy Milkman, we look at the science behind the state of arousal commonly referred to as stage fright, including new research into better ways to manage unpleasant emotions.
“In every job that must be done, there is an element of fun. You find the fun, and snap, the job’s a game!” So says Julie Andrews’ character in the Disney film Mary Poppins before she launches into the famous musical number “A Spoonful of Sugar.” In this episode of Choiceology with Katy Milkman, we look at the science behind the intuitive strategy of making difficult or boring things easier by adding that “element of fun.” But while Mary Poppins was focused on making the tedious task of cleaning a room a bit more enjoyable, you’ll see that this approach isn’t limited to housework. You’ll hear Nancy Stahl’s dramatic story of a life-threatening medical event. Her prognosis was grim, but thanks to grit, determination, and some pioneering work in gamifying rehabilitation by Professor Lynne Gauthier, Nancy made a remarkable recovery. Next, Dan Ariely recounts an incredibly difficult long-term treatment that he was able to endure and complete, thanks to a strategy known as temptation bundling (a term coined by Katy Milkman through her research into the phenomenon). Finally, Ayelet Fishbach joins Katy to discuss research into myriad ways that adding enjoyable elements to difficult or tedious tasks can improve outcomes in everything from math education to exercise to job satisfaction.
Have you ever bid in a competitive auction—say, on eBay—and won the item, only to see a similar item for sale elsewhere at a lower price? If so, you may have fallen prey to the winner’s curse. In this episode of Choiceology with Katy Milkman, we look at bias that can lead people to overpay in auctions and other types of negotiations. We begin with the story of Havre de Grace. This prize filly had an exceptionally successful career as a racehorse before being auctioned as a broodmare. Expectations were high for the sale because Havre de Grace had such a strong thoroughbred pedigree. But the way the auction proceeded surprised everyone in the room. Glenye Cain Oakford was at the Fasig-Tipton November Mixed Sale and paints a vivid picture of a dramatic bidding process. She is an award-winning journalist, writer, and videographer based in Lexington, Kentucky. Max Bazerman has contributed important research to the study of the winner’s curse. He joins Katy to discuss the ways in which this phenomenon can affect purchasing decisions around everything from jewelry to oil leases—and how the bias can diminish your ability to negotiate successfully.
Have you ever purchased a car or a motorcycle or a boat, based on some particular quality it had that made you fall in love? Maybe it was candy apple red. Maybe it had sleek lines. Maybe the engine made a pleasing purr. Hopefully that decision was a happy one. But what happens when the red sports car spends most of its time in the shop? Or the sleek motorbike is hard on your back? Or the purring boat engine is a gas-guzzler? In this episode of Choiceology with Katy Milkman, we look at how our preferences tend to shift when we evaluate a choice on its own versus side-by-side with other possible options. The episode begins with Vivienne Wagner and her family’s decision to adopt an adorable puppy after seeing a popular movie that featured the breed. (You know, the spotty dogs—over a hundred of them.) It’s a cautionary tale about a lovable but incredibly difficult pooch named Barkley and the perils of selecting a family pet in a vacuum. Max Bazerman is an authority on the phenomenon of shifting preferences when decisions are made separately or jointly. He joins Katy to discuss the ways in which our evaluation tendencies can impact activities ranging from hiring an employee to communicating with a spouse. He also discusses strategies to be more deliberative while making important decisions.
If you’ve ever signed up for a frequent flyer program, chances are good that you were awarded a certain number of bonus points to start. Those bonus points feel like a nice little gift, but they also serve another purpose: to increase your motivation to participate in the program. In this episode of Choiceology with Katy Milkman, we explore how your proximity to a goal can affect the way you behave. You’ll hear the fascinating story of Brian Zinn and his decade-spanning quest to unravel an elaborate riddle. When Brian was a college student, he stumbled upon a book called The Secret: A Treasure Hunt. In it were 12 cryptic puzzles—arcane verses and mysterious images that, when paired and solved, would point readers to 12 treasures buried in undisclosed locations around the United States. The treasure hunt was a harmless pastime during Brian’s college days, but when he rediscovered the book years later, it became something of an obsession. You’ll learn about his escalating adventures attempting to locate one of the book’s hidden treasures. Since the publication of The Secret nearly 40 years ago, only three of the 12 treasures have ever been found. Next, Oleg Urminsky joins Katy to reveal the behavioral mechanisms that drive us to increase our efforts as we approach a goal, or perceive that we’re approaching a goal. Urminsky’s research led him to demonstrate surprising shifts in behavior using a simple coffee card loyalty program. Oleg Urminsky is a professor of marketing at the University of Chicago Booth School of Business.
An unprecedented global health crisis has overwhelmed healthcare systems, disrupted economies and financial markets, and radically altered our daily lives. And while social distancing is the responsible thing to do to slow the spread of disease, it also heightens the emotional challenges we face during these scary and uncertain times. In this special bonus episode of Choiceology with Katy Milkman, we look to the science of happiness to see how we might mitigate the adverse impacts to our mental health and well-being—and maybe even cultivate good new habits that can help us when the crisis is over. In 2018, psychologist Laurie Santos introduced a new course at Yale—its subject, happiness—which quickly became the storied university’s most popular class ever. Katy interviews Laurie to find out what insights from the course apply to our current situation and to solicit advice on happiness-improvement steps we can be taking now. Laurie Santos is a professor of psychology and head of Silliman College at Yale University. A version of her “happiness class”—The Science of Well-Being—is now available online for free through Coursera. Laurie also hosts the hit podcast The Happiness Lab.
We are inundated with decisions in the modern world. What to wear, what to buy, what to watch, where to work, what to eat, who to call, where to live, what to study, when to exercise, how much to save, etc. And every decision, no matter how small, requires mental effort. But when a particular option is suggested to us ahead of time, the cognitive load is much smaller. In this episode of Choiceology with Katy Milkman, we explore the subtle power of default options. We begin with a simple experiment, offering free hot chocolate to random college students. A small shift in the way we present the option of a whipped-cream topping leads to a measurable change in the students’ preferences. Next up, a rather more consequential example. It’s the story of the web browser wars in the mid-1990s. You’ll get an insider’s perspective on the epic battle between Microsoft’s Internet Explorer browser, and Netscape Communications’ Navigator browser. Netscape had a substantial head start in the browser space, pioneering many of the features we take for granted in web browsing today. But Microsoft employed a simple strategy to grow their user base for Internet Explorer and quickly gained market share. The end result of this strategy was a seismic shift in the industry. You’ll hear from Eric Sink, a lead developer on the Internet Explorer project. To examine the science behind defaults, Katy invited behavioral economist Shlomo Benartzi to join her to discuss the ways that choice architecture and defaults can have a major impact on our behavior, particularly around retirement savings programs. Finally, Katy offers practical advice on how to leverage defaults to reach your goals—and how to avoid the defaults that might trick you into less desirable options.
Many episodes of this podcast deal with cognitive biases that can hinder our decision-making abilities. In this episode of Choiceology with Katy Milkman, we look at a different kind of error: how completely irrelevant information can negatively influence our judgments, making them varied and unpredictable. This variability of human judgment—or noise—is the topic of an upcoming book by Nobel Prize-winning economist Daniel Kahneman, with Cass Sunstein and Olivier Sibony. You’ll hear an interview with Kahneman later in the episode where he explains his preoccupation with the substantial and expensive effects of noise. He proposes ways to reduce the problem of noise for industries, businesses, and individuals who need to make more objective judgements. But first, we’ll dive into the world of wine judging. G.M. “Pooch” Pucilowski will take you on a guided tour of the California State Fair Commercial Wine Competition. You’ll hear about the criteria for judging different varietals—and the accompanying challenges that wine judges face as they swirl, sniff, and sip through dozens and sometimes hundreds of different wines. After years of coordinating and observing the judges, Pooch noticed a large amount of variability in the results. This may not be surprising, since taste is subjective. But after some tweaks to the process, he even began to notice that judges were inconsistent with themselves! Enter vintner and retired oceanographer Robert Hodgson. Pooch teamed up with Hodgson to devise a way to study and improve the consistency of wine judging and push for a more objective competition. The results were promising, but not without controversy. G.M. “Pooch” Pucilowski is a speaker, writer, wine judge, and educator. He runs wine appreciation classes through his University of Wine. You’ll also hear about the potential role of chemical analysis and artificial intelligence in improving the results of wine judging from James Hutchinson, formerly of the Royal Society of Chemistry and currently CEO of KiwiNet. And finally, Katy explores the potential of leveraging noise to produce better decisions by employing the wisdom of crowds—and even “the crowd within.”
In an episode of the television series Seinfeld, Jerry does a standup bit where he talks about staying up too late at night. He says, “I’m Night Guy. Night Guy wants to stay up late,” to which he then replies, “What about getting up after five hours of sleep?” The answer? “That’s Morning Guy’s problem.” This illustrates a challenge that we all face: How do you stick to positive long-term goals in the face of negative short-term temptations? In this episode of Choiceology with Katy Milkman, we look at strategies to help keep Night Guy in check, so that Morning Guy can wake up well-rested. The episode begins with two short tales of temptation. The first is the mythical story of Ulysses (Odysseus) avoiding the tantalizing but dangerous songs of the sirens. The second is an account of Victor Hugo’s struggles to complete his novel The Hunchback of Notre Dame in the face of his own procrastination. In both stories, the protagonist employs a clever strategy to reach his goals. For another illustration, we turn to Dean Karlan. Dean is a founder of StickK, a website and app that helps people commit to achieving goals using contracts with real stakes. The idea for StickK came about through Dean’s personal struggle to lose weight. He decided to leverage what he’d learned about human behavior as an economist. He drew up a contract with a friend--someone who was also struggling with his weight--that would oblige each of them to pay the other thousands of dollars if they failed in their quest to shed pounds. Dean Karlan is a professor of economics and finance at the Kellogg School of Management at Northwestern University. He is also the co-author of More Than Good Intentions: Improving the Ways the World’s Poor Borrow, Save, Farm, Learn, and Stay Healthy. To look at the science behind commitment strategies, Katy is joined by behavioral economist and best-selling author Dan Ariely. You’ll hear how commitment devices can be used to help people overcome procrastination, save money for the future, and eat more vegetables. You’ll also hear about some of Dan’s favorite studies, in which these commitment devices improved post-operative outcomes for heart surgery patients and helped students better manage their workloads. Dan Ariely is the James B. Duke Professor of Psychology and Behavioral Economics at Duke University. He is also the author of Predictably Irrational and The (Honest) Truth About Dishonesty.
Benjamin Franklin is one of the most revered figures in American history. He accomplished more in one lifetime--as a publisher, scientist, and politician--than most of us dream of. One argument for his success is that he was a creature of habit. His grueling daily schedule focused on repeating several habits of self-improvement. He hoped to achieve a perfect version of himself by automating certain positive behaviors. Whether or not he always stuck to his daily schedule of self-improvement is debatable, but his intuition about the importance of habit was right on the money. In this episode of Choiceology with Katy Milkman, we look at the power of habit in shaping our behavior--for the better and for the worse. We begin with firefighter Stephan Kesting. Stephan takes us through several of the drills that firefighters repeat over and over again in order to internalize certain behaviors. These behaviors can save lives in disaster scenarios. Stephan’s preparedness was put to the test early in his career when he and his team were called to a massive fire. You’ll hear how habits developed through intense training made all the difference in a life-or-death rescue operation. Stephan Kesting is an officer in the Delta Fire Department in Delta, British Columbia. He is also a black belt instructor in Brazilian jiu-jitsu. To look at the science behind habit, Katy invited two top scholars to share their insights into this phenomenon. First, Wendy Wood explains why we have habits, how they’re formed, and the reasons they’re often difficult to change. Wendy Wood is the Provost Professor of Psychology and Business at Dornsife College at the University of Southern California. She’s also the author of the new book Good Habits, Bad Habits: The Science of Making Positive Changes That Stick. Next, you’ll hear from Angela Duckworth on how habits relate to self-control and persistence. She offers strategies that leverage the power of habit to help mitigate self-control challenges. Angela Duckworth is the Christopher H. Browne Distinguished Professor of Psychology at the University of Pennsylvania and the author of Grit: The Power of Passion and Perseverance.
If you’ve toured through any old world cities, you’ve probably marveled at ancient buildings that have stood the test of time. You might think to yourself, “They sure made things to last back in those days.” And while the Notre Dame Cathedral or the Parthenon or the Tower of London may seem like proof of the superior workmanship of a bygone era, what you don’t see are all the other buildings erected during the same period that have since crumbled or been torn down. In this episode of Choiceology with Katy Milkman, we look at a bias that often clouds the way we evaluate success and failure. We begin with the scientific awakening of Joseph Banks Rhine in the 1920s, during the peak of the spiritualist movement. Rhine was trained in science and wanted to apply the scientific method to his research into paranormal phenomena. Science taught him to be skeptical, so when Rhine’s research results seemed to demonstrate the existence of extra-sensory perception, or ESP, he believed he had found proof of a new aspect of human nature. The findings led to academic accolades and substantial financial support, until others tried to replicate his results. Next, we present a survey on musical acts and college drop-outs to demonstrate how easy it is to discount important information—when that information is not readily apparent. To look at the science behind this bias, Katy has enlisted two scholars to help explain it in different contexts. First, Sendhil Mullainathan provides useful examples of the bias in the world of investing and hiring. Sendhil is the Roman Family University Professor of Computation and Behavioral Science at the University of Chicago Booth School of Business. He’s also the co-author of the book Scarcity: Why Having Too Little Means So Much. Then, Emily Oster talks about the ways that doctors and parents sometimes unintentionally ignore important information when attempting to solve problems. Emily is a professor of economics at Brown University. Her most recent book is called Cribsheet: A Data-Driven Guide to Better, More Relaxed Parenting From Birth to Preschool.
In this episode of Choiceology with Katy Milkman, we look at how framing a decision based on what you stand to lose versus what you stand to gain affects your tolerance of risk. Luis Green was a contestant on the popular TV game show Deal or No Deal. The game is largely one of chance, but there are moments during play where the contestant has an option to accept a cash offer to quit. At one point in the game, Luis was offered $333,000 to simply walk away. A guaranteed win! It seems like an obvious choice. But as you’ll hear from the story, there are other factors that influenced his decision. Katy illustrates these factors with a version of a famous experiment. Volunteers are presented with two differently worded but mathematically identical scenarios. A simple shift from framing the scenario as a potential gain to one of potential loss results in starkly different choices from the volunteers. Next, Katy speaks with special guest Daniel Kahneman about the underlying theory that explains human behavior in these types of situations. Daniel Kahneman is a professor of psychology and public affairs emeritus at the Woodrow Wilson School and the Eugene Higgins Professor of Psychology Emeritus at Princeton University. He was awarded the 2002 Nobel Prize in Economics for his pioneering research with Amos Tversky. Their work helped establish the field of behavioral economics. Kahneman is also the author of the bestselling book Thinking, Fast and Slow. Finally, Katy speaks with Colin Camerer about some of his favorite studies on risk seeking in the domain of losses, as well as practical approaches for avoiding this less-than-ideal behavior. Colin Camerer is the Robert Kirby Professor of Behavioral Finance and Economics at the California Institute of Technology, where he teaches cognitive psychology and economics
Say you have a colleague who is struggling to complete a project at work. You might offer them some tips and tricks based on your own experience with similar projects. And it’s reasonable to expect those tips might be helpful to your colleague. But what if it turned out that the act of giving that advice might provide a measurable benefit to you as well? In this episode of Choiceology with Katy Milkman, we look at how giving advice can benefit the giver—as much or even more than the person receiving the advice. We begin the episode with Mike Mangini. Mike is a talented drummer, best known in the world of progressive rock. He has toured and recorded with numerous artists, including Steve Vai and Extreme. He also spent many years teaching drums privately and at the Berklee College of Music. It was in the process of teaching that he developed a system to codify his approach to playing drums. That system helped Mike navigate an intense audition for one of the biggest progressive rock bands in the world. From the heady world of arena rock, we move to more practical examples of the power of giving advice. You’ll hear several people offering advice on a number of challenges—and then hear them realize the usefulness of their own advice in real time. Next, Katy speaks with both Lauren Eskreis-Winkler and Angela Duckworth about the science behind advice giving. Lauren had the initial insight into this phenomenon. She and Angela, her doctoral adviser, ran a large-scale field experiment, along with Katy and Dena M. Gromet. The study demonstrates the measurable power of the advice-giving effect. Lauren Eskreis-Winkler is a postdoctoral fellow at the Wharton School at the University of Pennsylvania. Angela Duckworth is the Christopher H. Browne Distinguished Professor of Psychology at the University of Pennsylvania and the author of Grit: The Power of Passion and Perseverance.
Think back to a situation where you’ve been really pressed for time. Chances are good that the pressure of a deadline or an appointment caused you to be (a) hyper-focused and efficient or (b) panicked and prone to errors. Now think of a situation where you had plenty of available time. While you were probably much less stressed, it’s also likely that the superpowers of hyper-focus didn’t come so easily. In this episode of Choiceology with Katy Milkman, we look at how not having enough time or money or other resources affects behavior and decision-making. We begin the episode with Howard Scott Warshaw. Warshaw was a very successful game developer at Atari during the company’s heyday in the 1980s. He worked on several best-selling titles, including the hit game Yar’s Revenge. However, he is probably best known for creating E.T. the Extra Terrestrial video game. Some consider it the worst commercial video game ever released. The reason E.T. was so unsuccessful as a gaming experience and a commercial product may have more to do with Atari’s development timeline than with Warshaw’s concept or design. Next, we test our hypothesis about resource scarcity with a simple bean-bag-toss game. Half of our players were given five bags to throw, while the other half were given only one. You may be surprised to find out which players were more accurate, on average, with their tosses. Katy then jumps into the science of scarcity with Sendhil Mullainathan. Mullainathan explains that while scarcity taxes the mind and can lead to poor decision-making, it can also pay dividends with increased focus. Sendhil Mullainathan is the Roman Family University Professor of Computation and Behavioral Science at the University of Chicago Booth School of Business. He is also the author of Scarcity: Why Having Too Little Means So Much. Anuj K. Shah is a colleague and research collaborator with Sendhil Mullainathan. He joins Katy to discuss simple strategies to help offset the mental load of scarcity. He is an associate professor of behavioral science at the University of Chicago Booth School of Business.
There’s something satisfying about the close door button in an elevator, especially when you’re in a rush. However, it turns out that most of those close door buttons aren’t actually connected to anything; they have no effect. So why are they there? In this episode of Choiceology with Katy Milkman, we explore a quirk in the way people understand their ability to influence certain events. The 2002 Winter Olympics in Salt Lake City were a watershed moment for the Canadian men’s and women’s hockey teams. The men’s team hadn’t won a gold medal in 50 years, and the women’s team had never won gold, coming up short in prior Olympic events. The Canadians were facing powerhouse American teams, so they needed every advantage they could get. Enter Trent Evans. He was part of the Olympic ice-making team, though his allegiance was with the Canadians. During the initial ice making process, he marked the center of the rink with a small artifact in hopes that it would bring good luck to the Canadian teams. That artifact came to be seen by many as a key ingredient to success in the gold medal games. Broadcaster Peter Jordan covered the games for the Canadian Broadcasting Corporation and recounts the subterfuge involved in hiding the good luck charm. Peter was the host of the CBC television series It’s A Living for seven years. Good luck charms and superstitious beliefs are common, but generally easy to disprove. Still, this tendency to overestimate one’s influence appears regularly, even among skeptics. As an experiment, we had several volunteers roll a pair of dice in a simple board game scenario where they were aiming to roll a certain number to win the game. In almost every iteration of the experiment, our highly skeptical volunteers displayed this overestimation of influence. To learn more about the reasons for this behavior, we invited Don Moore to talk about his research on the phenomenon. Don is the Lorraine Tyson Mitchell Chair in Leadership and Communication at UC Berkeley Haas. To close the episode, Katy explores some of the contexts where this bias may impact important decisions in business and in life.