The Prof G Pod with Scott Galloway - Conversation with Dan Ariely — Why People Believe Irrational Things
Episode Date: February 1, 2024Dan Ariely, a professor of psychology and behavioral economics at Duke University, joins Scott to discuss what makes rational people believe seemingly irrational things. He also shares how we avoid ce...rtain facts when we don’t like the solution, as well as how a lack of trust in one area can spiral into others. Follow Professor Ariely on X, @danariely. Scott opens with his thoughts on the podcast space and then discusses why tech companies are still laying people off in droves. Algebra of Happiness: the role of parents. Learn more about your ad choices. Visit podcastchoices.com/adchoices
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Episode 285.
Route 285 is a U.S highway known as the death highway in 1985 microsoft released the
first version of its windows operating system window 1.0 and the breakfast club great teen
movie hit theaters becoming an instant classic true story i have the body of a teenager it's
amazing we can find on ebay developing markets. Go, go, go!
Welcome to the 285th episode of The Prop G-Pod.
In today's episode, we speak with Dan Ariely,
the James B. Duke Professor of Psychology and Behavioral Economics at Duke University
and author of a number of influential books, including his latest, Misbelief, What Makes Rational People Believe Irrational Things.
What is that, like 98% of America right now?
We discussed with Dan exactly that, why people believe seemingly impossible things, as well as how we can avoid certain facts when we don't like the solution.
Professor Ariely is sort of a role model of mine. I just love how he takes behavioral psychology
and makes it compelling,
and I think he's a great storyteller.
I've actually seen him a few times on the speaking circuit.
He's literally like a bit of an aspirational role model.
Okay, what's happening?
I'm headed to New York.
That's right.
The dog's coming into the city.
Little walking around Soho,
little zero bond, little too much alcohol, little lot of alcohol.
I'm having dinner.
Where am I having dinner?
I'm having dinner.
I think I'm having dinner at Babbo.
I'm going to have dinner at Cafe Select, one of my favorite places.
I'll do lunch or breakfast or brunch at either Jack's Wife Frida, which I love, and I'll get pastries from the Balthazar, the Boulangerie
of Balthazar, where I find a $14 brownie. I absolutely love New York. Thrilled to get back
there. And then I'm going to Tulum. Then I'm going to Tulum to be a total privileged douchebag
on mind-altering drugs, minus the mind-altering drugs. I don't really do a lot of that stuff.
I love it down there. Everyone says it's turned and it's gotten.
Whenever TikTok says something that they're over something and that it's so passe, that's
when I start going.
Like something's on its way out.
That's when I move in.
And if you go on TikTok, they'll just convince you that, oh, Tulum was amazing 10 years ago,
but now it's not amazing.
People say the same thing about New York.
I think New York's never been better post-COVID. I think it's just incredible. Okay, on to some serious news.
Elon Musk tweeted that his company, Neuralink, successfully implanted its first chip into a
human brain. According to Elon, initial results show promising neuron spike detection. What do
you think he was going to say? Yeah, we're killing people left and right. It's not working. Anyways,
what is Neuralink? And Elon founded a neurotechnology company that is building a brain-computer interface. The goal is to let those with traumatic injuries, such as loss of Elon, he definitely is an incredible innovator and doing really aggressive, amazing things.
And this feels, I think there's enormous opportunity here.
But I'd also like to point out that he seems to never be the one that goes into space or actually implant shit in his own brain.
Anyways, the FDA approved Neuralink's plans for human trials last May. Nita Farhani, a professor of law and philosophy at Duke University and previous property guest, says the global market for
neurotech is growing at a compound annual rate of 12% and is expected to reach $21 billion by 2026.
I'd like to have my friend Josh Wolf on. He's a venture capitalist who invests in what I
affectionately call crazy shit, like this kind of stuff. And whenever he talks to me about his
companies, I think that's too bleeding edge. But his returns to his LPs would indicate that he's
that's not true. He's done really well. Anyways, moving on, there's some big news in the podcast
space. Smartless, a show hosted by Will Arnett, Jason Bateman and Sean Hayes, is ditching Amazon
for Sirius XM. Bloomberg reported that the three-year deal between Sirius and SmartLess is worth more than $100 million, $33 million a year. Amazon reportedly paid between
$60 and $80 million for the show back in 2021. We haven't seen the big bucks associated with
podcasts in quite some time. In 2020 and 2021, these were the hot years for pod acquisitions,
specifically for Spotify and Amazon that bid the market up.
Back in 2021, Spotify reportedly only brought in $215 million in revenue from podcasts, despite investing more than a billion dollars in them.
And the Financial Times noted that that was only 2% of Spotify's total revenue, and then they absolutely exited the business. The thing about podcasting, people ask a lot of questions about podcasting,
is that I don't think there is a medium that has more income inequality. And that is, I would
bet that the top 170 do 98% of the revenue and 150% of the profits. What do I mean by that?
If you're not in the top 1,000 podcasts,
it is not self-sustaining. The ad market here is very much crowded in kind of the top probably 500 podcasts. So unless you're in the 0.0001%, you're unemployed or it's a marketing vehicle,
not a revenue-producing vehicle. This is a very difficult market. Why? The good news is the
barriers of entry are just non-existent. The bad news is the barriers of entry are non-existent. It kind of went through some different stages where initially it was sort
of a few celebrities who were interested in doing stuff. That didn't pan out. I think the guy that's
really busted this whole thing open is Joe Rogan, both long form. He's very talented at it. He kind
of defines the medium. And I've often said that we should all send 10 cents or some sort of royalty every time we do a podcast to Joe Rogan because he kind of exploded the medium.
What is also interesting about it is that it peaked in 2019.
Everybody wanted a podcast.
And what I found is even some very good podcasters have decided to get out because it's a decent amount of work and you effectively have a medium that's not really
growing as fast as the podcasts were. So in, you know, 20, call it 2015, there were maybe 100,000
podcasts. By 2020, there were a million new podcasts. Think about that. In 2020, obviously,
we're at home a lot. A million new podcasts started. And last year, there were about 220,000
new podcasts. My guess
is we're going to see a net decline in the number of podcasts over the next several years. So there's
some good things about it. It's growing. The podcast medium is growing, I think, at low double
digits. And it's getting pretty good CPMs. At Pivot and PropG, we get about $40 or $45 CPMs,
which is actually really good for anything that I guess technically is digital.
It's even good for television or radio.
Why is that?
Because our audience reaches hard-to-reach demographics.
Specifically on PropG, we reach upper-income young men, which are very difficult to reach and also very attractive to advertisers because they buy stupid things like BMWs and Nikes and coffees. And they are difficult to reach because they're not watching ad-supported
television other than sports. And then on Pivot, we reach kind of the great white rhino of
listeners, and that is very, very powerful tech executives whose software companies are looking
to sell software into. I believe the market's coming back. Why? The key attribute, the key value out of podcasts,
they can be the top 200 are relatively small businesses for media, but they're very profitable
once you hit, you know, a big production team at half a million bucks a year or maybe a million
bucks a year. And then once you hit that, in terms of advertising, 80, 90% of it is gross margin
falls to the bottom line. But even more than that, the reason why it gets higher CPMs is because
it's intimate. What do I mean by that? When someone approaches me, I track this pretty
carefully. I get about one and a half when I go out, when I decide to actually leave
my apartment, which is one of the reasons I'm looking forward to going to New York and Tulum.
For some reason, I actually leave the hut or the apartment, so to speak, in reverse order.
Anyways, I don't get out much. And when I do go out, I get recognized. I'm now up to about 1.3
times a day. Some days I get three people, some days I get zero. And people come up to me,
super nice, super friendly. It's one of the nicest things in
my life. I can tell how they know me based on how they approach me and the tone and the complexion
which they present themselves. If they come up and they're just like, hey, man, hey, Prop G,
high five. It's a video. It's a video. It's something on TikTok or a clip of something or even TV. If it's, they want to like sit down and they kind of put their hand over their heart
and they want to talk about how meaningful something I've done is to them, they read
something I wrote, specifically something about family or relationships. The written word still
moves to the heart faster and in a more impactful way than I think any medium.
If they come up to me and just start speaking to me, they don't even introduce themselves. They
just come up and they're like, Scott. And I say, yes. And I turn around and it's almost as if I
sit there and think, how do I know this person? Because clearly they know me. No, I don't. It's
the podcast. People believe that they know you. And one, you're in their ears for an hour.
And specifically, the operative term there is in. It's very intimate because you're inside of their
ear. You're on their person. And also, they're usually doing something quite intimate or they're
doing an activity that traditionally was reserved for people or things that meant a lot to them.
They're fixing breakfast for their family.
They're listening to it in the car with their son. They're with their dogs on a walk. They're working out. Whatever it might be, it's usually a space or a time and space where they don't
typically have strangers speaking to them. So when you're in their life that way, they feel as if
they know you. And as a result, host readovers get twice the CPMs
of inserted ads. Why? Because if they hear your voice continuing to read an ad,
they're sort of interested in the ad. The skip-throughs or whatever you call it,
the percentage of people who actually listen to the ads, I think is above 70%. And for some
podcasts, it's 80 or 90, which makes no sense to me because people can skip
the ads pretty easily. But people don't seem to mind when it's the host reading the ads. Anyway,
so small but profitable business, still growing, unlike most of media outside of TikTok and kind
of the digital guys. A huge income inequality, high CPMs because it's very, very intimate.
OK, one last story before we get to our
conversation with Professor Ariely. Layoff season and the year of efficiency continues
for the tech sector. In just the first few weeks of the year, nearly 100 tech companies,
including Meta, Amazon, Microsoft, and Google, have collectively laid off around 25,000 employees.
As a reminder, 2023 was brutal for tech companies. Around 1,000 of them cut nearly
260,000 jobs last year. In 2022, we predicted that 2023 would be the year of the Patagonia
Vest recession. But in their last quarters or toward the back half of the year, the big guys
would have their most profitable quarters because while their revenue growth wouldn't accelerate,
it wouldn't decline, and they would be able to reduce costs. And we saw a tripling in the net income of meta. The bottom line is the market
loves layoffs when they're not economically, they're not driven by a recession. And these are
quote-unquote discretionary layoffs. And here's why layoffs or cost reductions, I don't want to
say layoffs, but cost reductions can be so powerful. If you have 20% operating margins, meaning for every $100, you end up with $20 in gross profits,
right? And that's pretty healthy. That's not tech-like margins of 40. Some of these companies
have 40%, but it's not manufacturing operating margins of high single or low double digits.
So let's call it 20% operating margins. You have two choices to
grow shareholder value. How do you grow shareholder value? You grow the company, you more strategically
grow top line revenue or become more strategically advantaged to companies, whatever it might be,
or you just increase earnings. One increases the multiple, one increases the earnings. So
how do you increase earnings? Right? One of two ways. You either grow the top line, right, by five bucks, or if you have 20% operating margins, you reduce costs by
$1. So when faced with growing, when Meta, Alphabet, and Amazon said, all right, we need to
increase, we need to increase our profits by $10 billion, what would be easier? Growing the top-line revenue
by $50 billion or cutting costs by $10 billion? So they said, you know what, it'd be much easier,
given that we've been stuffing so many calories on the esophagus of this company for the last 20
years, to cut $10 billion expenses as opposed to growing the top-line $50 billion. That's probably
the wrong example, cut costs by $2 billion versus trying to grow the top line, 50 billion. That's probably the wrong example. Cut costs by 2 billion versus trying to grow the top line by 10 billion. And I think this is kind of rolling through the economy. And then they've been given this tool called AI and they think, we could probably lose 10 or 15% of our employees
and not notice that the end consumer,
the front end consumer,
would notice that they're gone.
This is all to say that as an entrepreneur
and as a manager,
your job is to grow shareholder value.
Your job is to grow enterprise value.
And there's a bunch of ways to do that.
I mean, example of Prop G,
or we have Prop G Media.
We have several lines of revenues.
We have speaking, we have podcasts, we have books. What else do we have? Oh,
revenue from our newsletter. And up until about two years ago, everything was basically a marketing
vehicle that was sort of break even to drive this incredibly high revenue, high margin business
called my speaking business. Over the last two years,
our speaking revenues have gone from 50% of our revenue to about a quarter of our revenue.
And while that has slowed top-line growth, it has made the enterprise worth more because it's a media company, not an enterprise supporting one-person speaking business. My speaking business
will never be acquired, or at least I don't think it will be. I don't see how a company
would come in and say, we want to buy this company to get your speaking revenues. But they might want to buy a media company that has repeatable assets, that seems to have consistent revenue, and our podcast does generate within a certain confidence interval a certain amount of revenue each month, and it's growing, call it 20, 25% a year. If you were to describe, if you were to try and zero in on what drove an incredible year in the markets in 2023, you'd say, well, it was really just seven stocks that were AI-inspired.
But even more than that, more than that, specifically talking about the operational
efficiencies, if you will, or what was the financial, I don't know, construct or dynamics
that drove so much shareholder value was the following. It was, one, the great taste of reduced
expenses without the calories of reduced revenues. These companies
continue to increase their revenue growth or continue to have revenue growth as they were
decreasing their costs. If you're ever in a situation where you turn around, this happened
at a bunch of companies. Quite frankly, sometimes it wasn't their idea. Salesforce had an activist
investor, Elliott, come in and say, we own a couple billion dollars of your stock now. We'd like you to take a hard look at your costs. Mark Benioff, who is very savvy, what is the rookie move among quote-unquote experienced CEOs when an activist shows up? They circle the wagons and they immediately put up the middle finger and say, how shareholder-driven, and said, sure, guys, what are your ideas? Listened to them and said, yeah, there's probably some fat to cut here.
Cut some fat, didn't lose any revenue growth, and boom, champagne and cocaine, bottom line, explode.
So, as a young entrepreneur, you're going to be totally focused on growth.
That makes a lot of sense.
But adults also focus on costs.
And I know firsthand that venture capitalists love entrepreneurs who throw nickels around as if they're manhole covers.
Keep in mind, you push up revenues or you push down costs.
Both are fantastic ways to grow shareholder value.
We'll be right back for our conversation with Dan Ariely, a professor of psychology and behavioral economics at Duke University and the author of a number of books, including his latest, Misbelief, What Makes Rational People Believe Irrational Things.
Professor Ariely, where does this podcast find you?
I'm currently a duke in my office
in the Center for Advanced Hindsight,
but my mind is scattered all over the place.
I'm thinking about Israel.
I'm thinking about Gaza.
I'm thinking about London. I'm thinking about London,
I'm thinking about what's happening
in American universities, about
Iran, Syria, what's
happening in South America.
So the world is
really troubling these
days. I think if somebody wrote a book
about this particular
era that we're living in, we wouldn't believe
them.
I sometimes assign it to the fact
as I get older, I get more anxious.
I was sort of sleepwalking through life
from sort of zero to 30.
I think from 30 to 50,
I had the right amount of anxiety.
I call it productive anxiety.
And now I'm anxious about everything.
But it feels, these times feel especially anxious.
So it feels...
Let me say one more thing about this.
You know, I view my world, my job,
as trying to promote small improvements.
Big improvements are tough.
Small improvements are possible.
I think that within the realm of social science,
there's lots of opportunities for small improvements.
We can get people to sleep slightly better.
We can get people to save a bit more,
to fight a little bit less, all of those things.
But then these big things happen.
They take us back.
And, you know, it's very hard to say,
okay, we make these small improvements
and these big step back that are,
how do we find the energy to continue and driving these small improvements and these big steps back, how do we find the energy to continue driving these small improvements?
We were speaking off mic about how the Holocaust deniers
are now merging with the October 7th deniers,
people who are questioning whether these events ever really happened.
And that in itself is disturbing.
But what I find more disturbing
is when I hear these people and I see them interviewed, other than the words that come
out of their mouth, their background, their education, it just doesn't fit. You think these
look like normal Americans that you would expect to be rational, and they're not. And that's where
your work kind of comes in, what it means to be
irrational. So let's start there. Give us an overview of what it means to be irrational.
Yeah. So there's lots of ways to be, there's one way to be rational and there are many ways to be
irrational. But what you said is very true about this notion of beliefs. And, you know, my latest book is called Misbelief
exactly because of that. And we see these people and we say to ourselves, five years ago,
we thought that we had the same beliefs. And now we look at the same people and say,
we don't understand how are they and us looking at the world in the same way and coming to such
different conclusions.
And it turns out that there's a psychological machinery that gets people to a state of misbelief.
And as a metaphor, you can think about the cookie.
And the cookie is a weaponized food that is designed to get us to want one
and then eat another one and another one and another one.
And somebody designed the cookie,
not intentionally to create the obesity epidemic,
but somebody designed the cookie
with an optimal combination of sugar, fat, and salt
to get this behavior.
And we have this machinery
that gets us to believe very strange things,
things that you would say,
I don't understand how this happened,
but this machinery is much more complex than the cookie
because it attracts almost all of our psychology.
If you look at misbelief,
it's basically kind of almost like an introduction to psychology textbook where it's about emotion and stress, cognition, personality, social, and all of these elements have a role in the descent of people from having standard beliefs to having some very strange beliefs.
And the basic ingredient that starts this whole path is stress.
And let's take us for a second away from politics and the world around us.
Think about two tribes of fishermen.
One tribe of fishermen fishes in the deep sea.
One of them fishes in the lake.
Those in the deep sea have a much more unpredictable environment. Those that fish in the lake, much more predictable. Which one of them develops more superstitions?
The ones in the deep sea. Why? Because a superstition gives people a sense of control.
I'll clap my hands, I'll pray to a god,
I'll do this and this thing,
and it will give me some sense of control.
And it turns out that when we're stressed,
and I don't mean the stress of saying,
oh my goodness, I'm so busy, I'm not sure how I'll manage.
I mean the kind of stress that says,
I don't understand the world.
I don't understand why the Houthis in Yemen
are all of a sudden attacking Americans.
I don't understand what's happening in South America.
I don't understand why Russia is attacking the Ukraine.
Like, I don't understand what ChatGPT
is going to do for my future work.
When people are living in an environment
that says, I just don't understand the world,
they want a story.
So superstition is one story, but we want a story.
But we don't end there.
It's not just a story.
We want a story with the villain, right?
Because now it's not our fault.
It's somebody else's fault.
And we want a complex story.
And why do we want a complex story. And why do we want a complex story? Because the complex story basically gets to say,
I thought I don't understand how things are.
Now I feel that I understand more than other people.
I understand that there's a cabal,
there's all kinds of things like that.
So people want story with the villain and the story has to be slightly complex.
And that's not the end of the final of misbelief.
It's not the end of the descent that will misbelieve.
This is just a starting condition of what it starts.
And if you think about COVID, I don't know what your feeling is,
but my feeling is that we haven't finished even dealing
with the emotional aftermath of COVID.
I think about kids who are now in college,
who spent the last two years of high school or the first two years in COVID.
I think about people who are restricted, worried, concerned,
lost money, lost faith in other people helping them.
Like think about all of this.
It takes a long time to, to recuperate and we haven't recuperate from COVID.
And now we get these other avalanches that are just making it very tough for us.
Very tough psychologically, very tough to cope.
I want to double click on that.
I, I, I really, I find that really interesting, the notion that we become more vulnerable to conspiracy theory or misinformation or behaving irrationally when we're age groups. But the place I find it most surprising
is with young people, because they're the most educated generation in history. And yet on some
of the biggest issues, I find that they're the most prone to misinformation or conspiracy theory.
So taking that one step further, you know, the thesis I would put forward, it's not what's going
on in Ukraine or even in the Middle East that stresses them. It's what you said, COVID. I think that's remarkably obvious, and I wish I'd thought
of that. But also that the younger generation with Instagram, social media, bulldozer parenting,
my colleague and your friend Jonathan Haidt has written eloquently on this,
that you have the most stressed generation in arguably American history. I mean, maybe young people during World War II, but
you see all the indicators are young people are depressed and anxious.
I think you're absolutely right, but there's another component of it.
And the component is, we've been thinking about the inputs to stress,
right? And you were writing, you write about them.
What's the cure against stress?
What's the remedy?
And the basic remedy against this kind of stress
is resilience.
Now, think about resilience.
What is resilience?
Usually we think about, okay, we go through life,
something bad happens, like in my
case, an injury. Life gets really bad. And then the question is, do you bounce back? How long it
takes you? And do you bounce back to where you were, a little bit below, a little bit above?
That's usually what we think about resilience is coming back from a tragedy. But resilience is not
just about coming back from a tragedy. It's also about just about coming back from a tragedy.
It's also about the way we go about our life
and do we feel that if something bad happens,
somebody will catch us.
I think of it as like an umbrella policy
for everything,
but not with the insurance,
but as a social contract.
And the standard way to think about it
is what is called secure attachment.
So imagine you're a parent,
you have a kid, they're three years old,
you go with them to the park,
and you say, kid, go to the swing.
If the kid goes to the swing
and come back 45 minutes later,
you have a kid with secure attachment.
But if the kid goes,
and every two minutes they look behind their shoulder to see if you're still there, you have not been so successful.
And that for me is the process of resilience. Do we think that as we go about our lives,
whatever we do, do we think that if something bad will happen, somebody will catch us. And I think that that feeling is at an all-time
low. How much time do people spend with their buddies? How much do people spend meaningful
time with their buddies? How many friends do we have that we think will travel 3,000 miles and spend $20,000
to bail us out of jail?
Not that this is the only test of friendship, but the reality is that we're getting into
a situation that we have less and less resilience in society.
And another interesting input is that as economic inequality increases, resilience goes down.
Why? Because even at the level of a neighborhood, people with high income inequality in the neighborhood are less likely to ask their neighbors for help.
So we are less together.
Of course, there's the Democrat-Republican separation. There's all kinds of other things. But we're less together. Of course, there's the Democrat-Republican separation.
There's all kinds of other things, but we're less together.
We feel that there's less things to rely on.
So all of this stress is not just increasing, but we have less resilience.
So we have less things to defend ourselves.
Like our psychological immune system against stress is weaker.
So all of this is creating lots of tension.
And then if you think about it, so we said, you know, misbelief is about stress, cognition,
emotion, and social.
If we jump for a second to the social, think about a young person who hasn't heard much about Israel or Hamas or the Palestinians,
but they heard the phrase from the river to the sea.
And they don't necessarily know what river it is or which sea it is, but that statement
is basically a community statement for them.
We have these people, we're marching, we are a group, we're together.
All of a sudden, it fulfills a need. It fulfills a need. They belong to something. They have a group.
And you said earlier that it's not the people that you would suspect. They're intelligent and
caring and creative and so on. That's right. One of the things I learned through this journey of misbelief
is that we shouldn't discount those people
and we shouldn't discount their opinions.
And what I mean by that, it's not that they're correct,
but those beliefs answer real needs that people have, right?
Yes, we can say, okay, they're descending to the path of misbelief.
They're ending up believing in something else.
But what function do these beliefs have?
Why is it that people have a need to believe
that the world is flat
or the World Health Organization is doing something
or they're Jeep 5?
Whatever it is, nobody wakes Jeep 5, whatever it is,
nobody wakes up in the morning and say,
I want to have some misbelief today.
People have some deep psychological needs and they find these misbeliefs as a remedy for those needs.
Now, it's not the ideal remedy, but it is a remedy.
I love that.
I love the notion that you become more susceptible to
misinformation and conspiracy theory when you're stressed. And that the resilience,
just as you were talking about, you know, it's a lack of resilience. I was thinking,
the thing that popped into my mind is the thing that gives you resilience is deep and meaningful
relationships. And you articulated that, you know, beautifully, the notion of a kid who feels like someone is there for them and doesn't have to be in the proximity, feels more resilient, more trusted.
The thing you didn't touch on that I wonder is part of this is that people no longer trust institutions, which used to serve as a form of security.
Any thoughts?
Yeah, absolutely.
So, you know, of course, the mistrust in journalism
makes it very hard to know who to trust online.
Lack of trust in politicians,
lack of trust in academics,
and lack of trust in physicians.
You know, basically the feeling is that we are on the road.
And even the court system, right?
You would want to believe that if something happens,
there is a sense of justice out there.
And when the sense of justice is eroding,
that's very, very tough.
And one other interesting thing about misbelief is that in my definition, it has two components.
One component is the belief in something that is ain't so, that's the outside.
But the second thing is that it's a very deep belief that colors the way we view the world
in general.
So imagine that I will just take the example of the earth is flat.
Imagine I think that the earth is flat.
It doesn't end there.
It says that NASA is lying and every airline pilot is lying, and every government is deceiving us,
and every school system knows the best,
and the space program is a hoax, and satellites,
and just think about what it is.
And it's all of a sudden not just the belief that the Earth is flat.
It's a lens from which you view life,
and you say, I don't trust any of the institutions.
And that's why it doesn't stop there.
Then it goes to other things and other things and other things.
And then you hear a little piece here and there and you make the picture.
Because if you already don't trust, everything you see creates another level of mistrust.
As a society, we're losing a lot because of it.
Can you explain the concept of solution aversion?
Yes.
So when we get to the cognitive components of how we change our opinion,
there's, of course, a very simple component, which is we watch the news that we like.
You decide if to watch NBC or Fox.
People decide what to watch.
And if you watch TikTok,
TikTok takes you to one of those paths
depending on their algorithm.
But then there's a second component,
which is not about selecting which information.
Like imagine this is all the information you want.
Confirmation bias is about selecting part of it.
It's like, oh, I'm just going to pay attention to this
or just pay attention to this.
Solution aversion is part of another component
which says even when I get exposed to all the information,
I'm able cognitively to discount the information I don't like
and focus on the things that I like.
So this is what is called motivated reasoning.
And maybe the nicest study was done in the context of climate change.
And the idea is that, you know, if I try to argue with somebody who is climate change
denier, let's say, the standard strategy is to say, here's a paper, and here's another
paper, and here's another paper. But what if it's not, the standard strategy is saying, here's a paper, and here's another paper,
and here's another paper.
But what if it's not about the evidence?
These are smart, intelligent people.
They can read.
What if it's about their cognitive system, who says, I am going to ignore this.
I'm going to discount it. I'm not going to pay attention.
And solution aversion basically says that when we don't like the proposed solution,
we reject the evidence.
So maybe what we need to do is we need to start with solutions that we might agree on
and only then try to convince people.
So maybe, not maybe, but a better approach would be to say to people, no, if climate
change was real, let's talk about solutions.
What would be reasonable?
Let's come up with something.
And then come up with something that would not upset them,
that they will be willing to do, and then take it from there.
So there's another, by the way, interesting trick in that regard,
in the cognitive regard, and we call it the illusion of explanatory depth.
And the illusion of explanatory depth basically says
that people think they understand many things in the world,
but we have only a very superficial understanding.
And when you push people,
they basically realize that there's a big gap
between what they think they know and what they know. So I demonstrated it with a flash toilet.
I said to people, do you understand how a flash toilet works?
They said, yes.
Scale it from 0 to 100.
I said, no, it's not.
Great.
Luckily for you, I have all the pieces of a flash toilet here.
Please try and assemble it.
Of course, nobody ever managed to assemble it,
and then I say, how much do you think
you understand flush toilet?
And people say, not so much.
And again, the idea is that when we try to convince people,
we usually go head to head.
But let me ask you, in the last five years,
how many people have you convinced deeply
that they were wrong?
Let's agree that not many.
I worry that sometimes I come on so strong that I just end up cementing their position.
That's right.
I think that's usually what happens.
Usually what happens is we argue with people.
And the other person is not even finished listening to our sentence they're
already counter-arguing they're already thinking why we're wrong so we think we spend an hour
expressing our opinion but the other person spend an hour cementing their own beliefs so we are not
convincing other people we're not convince ourselves the illusion of explanatory depth, basically don't fight people, come
from their side.
Now these coming at people's perspective and exploring that process.
And by the way, another context of course is the war between Israel and Hamas.
So I thankfully have lots of friends from all over the world, some from Arab countries.
And a lot of them contacted me after October 7th wanting to talk.
And I basically say, look, I don't want to talk about history.
I don't want to talk about 1948 and 67 and so on.
Not now.
I also don't want to talk about who is more morally wrong. It's just not
a healthy discussion. I want to talk, what do we do from here forward? What do we think that is the
right thing to do from here forward? And they say, fine. And then I say, what would you like to see
happen? And usually people say, I want an immediate ceasefire and I want Israel to leave Gaza.
And I say, okay, I can't grant it, but let's say you got this.
Let's say you got those two.
So what's next?
And usually they stop.
They say, what do you mean what's next?
This is it.
It's over.
I said, no, no, no, not over.
If there's a ceasefire and Israel left Gaza, does Hamas get to rule Gaza again?
And usually they say yes.
And I say, do we let them arm?
And they say yes.
And I say, nuclear weapon?
They say no.
Air force?
They say no.
Navy? Navy?
So I say, okay, so what do we let them do and then if october 7th repeats
in three months what what do you want the reaction to be then because it's it you know there's no
question that something like this would would happen again and it's not that those approaches
move people from right to left or left to right. They just get us to the right state of being less sure in ourselves.
And I think one of the dangers in polarization and discussion is that too many people are
100% sure.
And what we, like, where is the nuanced understanding of how complex the world is?
And the moment you get to a higher nuanced understanding of,
this is a really complex situation.
There's lots of wrong ways to go forward.
It's very unclear.
I think it's a better reflection of the situation.
And it's also much more likely that we as a public,
we are not decision makers in the politics,
but it's much more likely that we as a public, we are not decision makers in the politics, but it's much more likely
that we as a public would, whatever our desires to pressure the political system, they would be
aimed at the right direction. Well, you talk about this. You talk about a means of combating
misbelief requires a strategy rooted in empathy. And we talked about asking questions. Isn't it oftentimes also really important
to acknowledge points on the other side
and acknowledge the other viewpoint?
Acknowledge the other viewpoint and the suffering.
Like, you know, the discussion is like on both sides.
There were some really wonderful academic papers
showing that both sides
just want somebody to say you were wrong this was terrible this shouldn't have been like this you
were wrong now let's talk about what do we do moving forward but hearing our pain having some
sympathy because because the other way we we just think we're fighting.
Couldn't you hear me? Here's what I just
said. Why can't you acknowledge
anything? But people
treat
discussions as if it's a battlefield.
It's not a battlefield.
At the end of the day
we should come up with a
new joint
understanding of what we are.
And people are just not collaborative in this process.
We'll be right back.
You speak a lot about motivation.
You've written and spoken a lot about it.
What gets us to care about things and act on them?
So lots of things.
I'll tell you, this is slightly out of the context of this discussion,
but in the last seven years, I have been tracking how companies treat their employees,
how the employees feel about the company,
and what it means for the company's performance in the stock market.
So, for example, I'll ask you a few things.
Do you think that companies that pay their employees better
have a higher return to their stocks? I'd like to think yes.
So the empirical answer is no, not much. And what about health benefits? Do companies that
give better health benefits have higher return to their stock? Well, I mean, I'm cheating here.
I know the answer is no,
because McDonald's has gone up 12x
and doesn't have healthcare.
I mean, yeah, the answer is no.
Yeah, so the reality is that there is forking a road
between extrinsic motivation and intrinsic motivation.
And intrinsic motivation is salary and bonuses and chairs and tables and health benefits
and retirement benefits.
And all of those things that are called extrinsic motivation don't end up mattering so much.
This is research that we had data from 2006 ongoing.
So for this period and hundreds of companies.
The things that do matter end up being about intrinsic motivation.
And one of the things that is the most important is, do you feel appreciated?
Now, think about what does it mean to feel appreciated?
By the way, I think that when I heard about this, when we saw the results for this,
I thought about all the waste in the world in which we just don't get people
to feel sufficiently appreciated.
Think about all the people who work with us.
Sometimes it feels to me that people behave
as if we're born with a limited amount of compliments.
And if we gave all of our compliments away, we would die.
But it's not true.
There's an endless amount of appreciation, endless amount of thanks.
And it really matters.
People do lots of things and they want to know that somebody is watching.
They want to know that somebody is watching and it's worthwhile.
Another thing is psychological safety.
Psychological safety is basically people's ability
to express their opinions.
It's a little bit like resilience.
And they feel that nobody would attack them.
Nobody would cancel them.
Nobody would attack them. Nobody would cancel them. Nobody would attack them.
That it's a safe environment to express thoughts and feelings.
Alignment with the company is important.
We work somewhere, but we need to know that we're aligned with the company.
That we care about what it is that they are doing.
That we feel connected.
Bureaucracy, by the way, is one of the things that kills motivation.
Almost nothing kills motivation as much as bureaucracy.
Because when we add bureaucracy, we basically say to people,
we don't trust you, we don't care about your time,
and we don't want you to do anything different. You see an opportunity for improvement, don't care about your time. And we don't want you to do anything different.
You see an opportunity for improvement, don't do it.
Just do what's easy without tackling the bureaucracy.
Of course, all of those are very, very negative in terms of motivation.
So we have extrinsic motivation, intrinsic.
What's really important is intrinsic.
And then within intrinsic, there are these two subcomponents.
One is goodwill.
Think about your current amount of efforts in quality 100.
Not you, but somebody.
Think about your current level of effort at your job in quality 100.
Now ask yourself how much lower you could get and
still not lose your job. For many people, it's quite a lot. And then think about how much up you
can go if you were truly excited about what you do. That range between the minimum you had to do
not to lose your job and the max you could do if you could be very excited. That's I call goodwill.
Because that's the part where the employee controls.
I decide if to sit here and drink coffee or to try very hard.
So that's one, the first component.
Then the second component I call utility embracing.
And think about the following story.
Imagine a janitor in a hospital.
The janitor has a job description.
So water, toilet paper, whatever.
One day, our janitor walks in the hallway,
and they hear a patient crying.
Should they go and check on him?
You say yes.
One day, the janitor walks, and they see a family getting lost in the corridor.
Should we redirect them?
Yes.
In fact, we understand that there's lots of things
that are not in the janitor's job description
that we want the janitor to do.
We want the janitor to take the utility of the hospital.
This is good for the hospital.
It's not good for me right now because it takes time for me and I'll have to go back to my duties later, but it's good for the hospital. This is good for the hospital. It's not good for me right now
because it takes time for me
and I'll have to go back to my duties later,
but it's good for the hospital.
And when you think about it,
there are lots of cases
in which we want people
not to do their job description.
We want people to look around
and say, where else can I be helpful?
What can I do to be helpful
for the organization
that is not in my job description?
So those two components, utility embracing,
opening our eyes and looking around,
and goodwill make a huge difference.
And the thing about it, it's good for everybody.
People who go to a workplace where they love going to
are happier and more productive.
Everybody wins.
But nevertheless, lots of organizations are not doing it the right way.
So on a larger scale, what global societal issues, and I imagine there's a lot to pick from right now,
have occurred as a result of our own irrational behavior?
What are self-inflicted wounds here?
Well, right now, I think one of the big ones is social media,
and it's multiple wounds.
The class action lawsuits in the U.S. against tobacco
are about $200 billion, I think, something like that.
What would the number be if there were class action lawsuits
against social media?
It'll be hard to quantify, but we talked about loneliness
and depression and social polarization and fake news
and people are not getting vaccinated.
You can just name the thing.
Imagine we would quantify that.
That would be much more, I think.
And it's self-inflicted in the sense that,
you know, when I started writing this book,
in the proposal I wrote, it will be a chapter on solutions.
I don't have a chapter on solutions, I have these little sections in the middle called,
hopefully helpful.
Because I think that the real solutions have to be much broader and bigger.
We have to control social media.
We have to create new standards for truth.
I think that freedom of speech is a wonderful idea, but when it can be weaponized in a way
that it is now, we have to reconsider it.
It's one of the biggest problems, I think, of modern society is misinformation and polarization.
Like 10 years ago, if you asked me
what are the big problems facing humanity,
this wouldn't be one of them.
Now, I think that in order to go forward in anything,
we need to unite.
If whatever decision we make, the other half is going to say, I'm not accepting it, or I think this, like, we're not going to move forward in
any meaningful way. So I think that will be number one for me now is the way that our information
systems are working. And we need to do something really big to fix them.
Dan Ariely is a professor of psychology and behavioral economics at Duke University
and a founding member of the Center for Advanced Hindsight. He's also the best-selling author of a
number of books, including Irrationally Yours, Predictably Irrational, and The Upside of
Irrationality. His latest book, Misbelief, What Makes Rational People Believe Irrational and the Upside of Irrationality. His latest book, Misbelief, What Makes Rational People
Believe Irrational Things, is out now. He joins us from the great University of Duke. Professor,
it's always good to speak to you. And I came late to writing books. I wish I'd started earlier.
It's been something wonderful, me. And your book, predictably, I think it was predictably irrational,
was motivation for me to write the book because your agent reached out to me
and said, you remind me of Professor Ariely, and you should write a book.
So thanks for that.
And Jim Levine is an amazing, amazing, amazing guy.
What a mensch.
Yeah, exactly.
Thanks again.
Best of luck to you.
Adder of happiness, something that struck me.
I'm not, I don't know much about Michelle Obama.
I've always thought she was a really impressive first lady and an impressive person. And like most people, I'm very fond or have very, I don't know, positive memories of the Obama administration. Something she friends, that we would hang out and do stuff
together and talk together. I remember I said to my kid, it's time to have, you know, the sex talk.
And I have never seen a look of horror like I saw in his face. And he literally screamed out
reflexively, no. And I think I was sort of upset because I thought, well, we should be able to have
these conversations. And the reality is I'm not his friend. And that might be a conversation that a dad and a son have. It
probably should be. But it's probably not necessarily a conversation a dad and a son
need to have. But I was upset because I thought maybe he'd think of me as a friend who could give
him good advice. I get my kid, my youngest, out of bed every day. I have my boys, and it's a freaking
nightmare. My kid is like me. He's nocturnal. We start this three-hour process called putting him
to bed at about 9.30 p.m., and by 1 a.m., he's finally in bed. I want to get milk. I need to
brush my teeth. Oh, I need to check my phone. I mean, it's just like the like delay and stall tactics that would make any professional athlete, I don't know, whimper or cower in impressiveness.
Anyways, he's very good at stalling around then. And then I wake up, you know, my alarm goes off at 715. I feed the dogs. I come down and I get him. The first thing I go in, I wake up the shades and I say, Nolan. And I turn off the sound machine and he's like, yeah, a little bit longer. And then I go
down and eventually it just digresses to at some point me screaming at him and sometimes even
throwing the covers off of him and not physically dragging him out of bed, but basically dragging
him out of bed. And it's upsetting for me. I don't like it. The reality is you're not your
kid's friend. You're their dad. You're their mother. And that's what you're here for. You're
here to make sure they know their love, but you're here to logistically get shit done,
put guardrails around them, give them values, make sure they have confidence and self-esteem.
And I think a certain amount of discipline and guardrails and forcing them to have a certain
set of objectives such that
they know how to get things done.
They know what's required to get things done.
They know things involve a trade-off and still a certain level of discipline, know that there
is a hierarchy and authority in every situation, including a household.
I think that's really important.
And sometimes it hurts.
And a lot of times it's not as fun.
Sometimes I'd rather just rather have a couple of friends to hang out with. But here's the thing. Here's the thing the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn, and on Monday with our
weekly market show.