by Rolf Dobelli
Marketing strategists recognize the usefulness of the house-money effect. Online gambling sites “reward” you with $100 credit when you sign up. Credit card companies offer the same when you fill in the application form. Airlines present you with a few thousand miles when you join their frequent-flier clubs. Phone companies give you free call credit to get you accustomed to making lots of calls. A large part of the coupon craze stems from the house-money effect.
In conclusion: Be careful if you win money or if a business gives you something for free. Chances are you will pay it back with interest out of sheer exuberance. It’s better to tear the provocative clothes from this seemingly free money. Put it in workmen’s gear. Put it in your bank account or back into your own company.
85
Why New Year’s Resolutions Don’t Work
Procrastination
A friend, a writer, someone who knows how to capture emotion in sentences—let’s call him an artist—writes modest books of about a hundred pages every seven years. His output is the equivalent of two lines of print per day. When asked about his miserable productivity, he says: “Researching is just so much more enjoyable than writing.” So he sits at his desk, surfing the Web for hours on end or immersed in the most abstruse books—all in the hope of hitting upon a magnificent, forgotten story. Once he has found suitable inspiration, he convinces himself that there is no point starting until he is in the “right mood.” Unfortunately, the right mood is a rare occurrence.
Another friend has tried to quit smoking every day for the past ten years. Each cigarette is his last. And me? My tax returns have been lying on my desk for six months, waiting to be completed. I haven’t yet given up hope that they will fill themselves in.
Procrastination is the tendency to delay unpleasant but important acts: the arduous trek to the gym, switching to a cheaper insurance policy, writing thank-you letters. Even New Year’s resolutions won’t help you here.
Procrastination is idiotic because no project completes itself. We know that these tasks are beneficial, so why do we keep pushing them onto the back burner? Because of the time lapse between sowing and reaping. To bridge it requires a high degree of mental energy, as psychologist Roy Baumeister demonstrated in a clever experiment. He put students in front of an oven in which chocolate cookies were baking. Their delicious scent wafted around the room. He then placed a bowl filled with radishes by the oven and told the students that they could eat as many of these as they wanted, but the cookies were strictly out of bounds. He then left the students alone in the room for thirty minutes. Students in a second group were allowed to eat as many cookies as they wanted. Afterward, both groups had to solve a tough math problem. The students who were forbidden to eat any cookies gave up on the math problem twice as fast as those who were allowed to gorge freely on cookies. The period of self-control had drained their mental energy—or willpower—which they now needed to solve the problem. Willpower is like a battery, at least in the short term. If it is depleted, future challenges will falter.
This is a fundamental insight. Self-control is not available around the clock. It needs time to refuel. The good news: To achieve this, all you need to do is refill your blood sugar and kick back and relax.
Though eating enough and giving yourself breaks is important, the next necessary condition is employing an array of tricks to keep you on the straight and narrow. This includes eliminating distractions. When I write a novel, I turn off my Internet access. It’s just too enticing to go online when I reach a knotty part. The most effective trick, however, is to set deadlines. Psychologist Dan Ariely found that dates stipulated by external authorities—for example, a teacher or the IRS—work best. Self-imposed deadlines will work only if the task is broken down step-by-step, with each part assigned its own due date. For this reason, nebulous New Year’s resolutions are doomed to fail.
So get over yourself. Procrastination is irrational but human. To fight it, use a combined approach. This is how my neighbor managed to write her doctoral thesis in three months: She rented a tiny room with neither telephone nor Internet connection. She set three dates, one for each part of the paper. She told anyone who would listen about these deadlines and even printed them on the back of her business cards. This way, she transformed personal deadlines into public commitments. At lunchtime and in the evenings, she refueled her batteries by reading fashion magazines and sleeping a lot.
86
Build Your Own Castle
Envy
Three scenarios—which would irk you the most? (a) Your friends’ salaries increase. Yours stays the same. (b) Their salaries stay the same. Yours does, too. (c) Their average salaries are cut. Yours is, too. If you answered A, don’t worry, that’s perfectly normal: You’re just another victim of the green-eyed monster.
Here is a Russian tale: A farmer finds a magic lamp. He rubs it, and out of thin air a genie appears who promises to grant him one wish. The farmer thinks about this for a little while. Finally, he says: “My neighbor has a cow and I have none. I hope that his drops dead.”
As absurd as it sounds, you can probably identify with the farmer. Admit it: A similar thought must have occurred to you at some point in your life. Imagine your colleague scores a big bonus and you get a gift certificate. You feel envy. This creates a chain of irrational behavior: You refuse to help him any longer, sabotage his plans, perhaps even puncture the tires of his Porsche. And you secretly rejoice when he breaks his leg skiing.
Of all the emotions, envy is the most idiotic. Why? Because it is relatively easy to switch off. This is in contrast to anger, sadness, or fear. “Envy is the most stupid of vices, for there is no single advantage to be gained from it,” writes Balzac. In short, envy is the most sincere type of flattery; other than that, it’s a waste of time.
Many things spark envy: ownership, status, health, youth, talent, popularity, beauty. It is often confused with jealousy because the physical reactions are identical. The difference: The subject of envy is a thing (status, money, health, etc.). The subject of jealousy is the behavior of a third person. Envy needs two people. Jealousy, on the other hand, requires three: Peter is jealous of Sam because the beautiful girl next door phones him instead.
Paradoxically, with envy, we direct resentments toward those who are most similar to us in age, career, and residence. We don’t envy businesspeople from the century before last. We don’t begrudge plants or animals. We don’t envy millionaires on the other side of the globe—just those on the other side of the city. As a writer, I don’t envy musicians, managers, or dentists, but other writers. As a CEO you envy other, bigger CEOs. As a supermodel you envy more successful supermodels. Aristotle knew this: “Potters envy potters.”
This brings us to a classic practical error: Let’s say your financial success allows you to move from one of New York’s grittier neighborhoods to Manhattan’s Upper East Side. In the first few weeks, you enjoy being in the center of everything and how impressed your friends are with your new apartment and address. But soon you realize that apartments of completely different proportions surround you. You have traded in your old peer group for one that is much richer. Things start to bother you that haven’t bothered you before. Envy and status anxiety are the consequences.
How do you curb envy? First, stop comparing yourself to others. Second, find your “circle of competence” and fill it on your own. Create a niche where you are the best. It doesn’t matter how small your area of mastery is. The main thing is that you are king of the castle.
Like all emotions, envy has its origins in our evolutionary past. If the hominid from the cave next door took a bigger share of the mammoth, it meant less for the loser. Envy motivated us to do something about it. Laissez-faire hunter-gatherers disappeared from the gene pool; in extreme cases, they died of starvation, while others feasted. We are the offspring of the envious. But, in today’s world, envy is no longer vital. If my neighbor buys himself
a Porsche, it doesn’t mean that he has taken anything from me.
When I find myself suffering pangs of envy, my wife reminds me: “It’s okay to be envious—but only of the person you aspire to become.”
87
Why You Prefer Novels to Statistics
Personification
For eighteen years, the American media was prohibited from showing photographs of fallen soldiers’ coffins. In February 2009, Defense Secretary Robert Gates lifted this ban and images flooded onto the Internet. Officially, family members have to give their approval before anything is published, but such a rule is unenforceable. Why was the ban created in the first place? To conceal the true costs of war. We can easily find out the number of casualties, but statistics leave us cold. People, on the other hand, especially dead people, spark an emotional reaction.
Why is this? For eons, groups have been essential to our survival. Thus, over the past hundred thousand years, we have developed an impressive sense of how others think and feel. Science calls this the “theory of mind.” Here’s an experiment to illustrate it: You are given $100 and must share it with a stranger. You can decide how it is divided up. If the other person is happy with your suggestion, the money will be divided that way. If he or she turns down your offer, you must return the $100 and no one gets anything. How do you split the sum?
It would make sense to offer the stranger very little—maybe just a dollar. After all, it’s better than nothing. However, in the 1980s, when economists began experimenting with such “ultimatum games” (the technical term), the subjects behaved very differently: They offered the other party between 30 percent and 50 percent. Anything below 30 percent was considered “unfair.” The ultimatum game is one of the clearest manifestations of the “theory of mind”: In short, we empathize with the other person.
However, with one tiny change, it is possible to almost eliminate this compassion: Put the players in separate rooms. When people can’t see their counterparts—or, indeed, when they have never seen them—it is more difficult to simulate their feelings. The other person becomes an abstraction, and the share they are offered drops, on average, to below 20 percent.
In another experiment, psychologist Paul Slovic asked people for donations. One group was shown a photo of Rokia from Malawi, an emaciated child with pleading eyes. Afterward, people donated an average of $2.83 to the charity (out of $5 they were given to fill out a short survey). The second group was shown statistics about the famine in Malawi, including the fact that more than three million malnourished children were affected. The average donation dropped by 50 percent. This is illogical: You would think that people’s generosity would grow if they knew the extent of the disaster. But we do not function like that. Statistics don’t stir us; people do.
The media has long known that factual reports and bar charts do not entice readers. Hence the guideline: Give the story a face. If a company features in the news, a picture of the CEO appears alongside (either grinning or grimacing, depending on the market). If a state makes the headlines, the president represents it. If an earthquake takes place, a victim becomes the face of the crisis.
This obsession explains the success of a major cultural invention: the novel. This literary “killer app” projects personal and interpersonal conflicts onto a few individual destinies. A scholar could have written a meaty dissertation about the methods of psychological torture in Puritan New England, but instead, we still read Hawthorne’s The Scarlet Letter. And the Great Depression? In statistical form, this is just a long series of numbers. As a family drama, in Steinbeck’s The Grapes of Wrath, it is unforgettable.
In conclusion: Be careful when you encounter human stories. Ask for the facts and the statistical distribution behind them. You can still be moved by the story, but this way, you can put it into the right context. If, however, you seek to move and motivate people for your own ends, make sure your tale is seasoned with names and faces.
88
You Have No Idea What You Are Overlooking
Illusion of Attention
After heavy rains in the south of England, a river in a small village overflowed its banks. The police closed the ford, the shallow part of the river where vehicles cross, and diverted traffic. The crossing stayed closed for two weeks, but each day at least one car drove past the warning sign and into the rushing water. The drivers were so focused on their car’s navigation systems that they didn’t notice what was right in front of them.
Above observation is from cognitive psychologists Daniel Simons and Christopher Chabris. At Harvard in the 1990s, they filmed two teams of students passing basketballs back and forth. One team wore black T-shirts, the other, white. The short clip, “The Monkey Business Illusion,” is available on YouTube. (Take a look before reading on.) In the video, viewers are asked to count how many times the players in white T-shirts pass the ball. Both teams move in circles, weaving in and out, passing back and forth. Suddenly, in the middle of the video, something bizarre happens: A student dressed as a gorilla walks into the center of the room, pounds his chest, and promptly disappears again. At the end, you are asked if you noticed anything unusual. Half the viewers shake their heads in astonishment. Gorilla? What gorilla?
The monkey business test is considered one of the most famous experiments in psychology and demonstrates the so-called illusion of attention: We are confident that we notice everything that takes place in front of us. But in reality, we often see only what we are focusing on—in this case, the passes made by the team in white. Unexpected, unnoticed interruptions can be as large and conspicuous as a gorilla.
The illusion of attention can be precarious, for example, when making a phone call while driving. Most of the time doing so poses no problems. The call does not negatively influence the straightforward task of keeping the car in the middle of the lane and braking when a car in front does. But as soon as an unanticipated event takes place, such as a child running across the street, your attention is too stretched to react in time. Studies show that drivers’ reactions are equally slow when using a cell phone as when under the influence of alcohol or drugs. Furthermore, it does not matter whether you hold the phone with one hand, jam it between your shoulder and jaw, or use a hands-free kit: Your responsiveness to unexpected events is still compromised.
Perhaps you know the expression “the elephant in the room.” It refers to an obvious subject that nobody wants to discuss, a kind of taboo. In contrast, let us define what “the gorilla in the room” is: a topic that is of the utmost importance and urgency, and that we absolutely need to address, but nobody knows about it.
Take the case of Swissair, a company that was so fixated on expansion that it overlooked its evaporating liquidity and went bankrupt in 2001. Or the mismanagement in the Eastern bloc that led to the fall of the Berlin Wall. Or the risks on banks’ books that up until 2007 nobody paid any attention to. Such gorillas stomp around right in front of us—and we barely spot them.
It’s not the case that we miss every extraordinary event. The crux of the matter is that whatever we fail to notice remains unheeded. Therefore, we have no idea what we are overlooking. This is exactly why we still cling to the dangerous illusion that we perceive everything of importance.
Purge yourself of the illusion of attention every now and then. Confront all possible and seemingly impossible scenarios. What unexpected events might happen? What lurks beside and behind the burning issues? What is no one addressing? Pay attention to silences as much as you respond to noises. Check the periphery, not just the center. Think the unthinkable. Something unusual can be huge; we still may not see it. Being big and distinctive is not enough to be seen. The unusual and huge thing must be expected.
89
Hot Air
Strategic Misrepresentation
Suppose you apply for your dream job. You buff your résumé to a shine. In the job interview, you highlight your achievements and abilities and glo
ss over weak points and setbacks. When they ask if you could boost sales by 30 percent while cutting costs by 30 percent, you reply in a calm voice: “Consider it done.” Even though you are trembling inside and racking your brain about how the hell you are going to pull that off, you do and say whatever is necessary to get the job. You concentrate on wowing the interviewers; the details will follow. You know that if you give even semi-realistic answers, you’ll put yourself out of the race.
Imagine you are a journalist and have a great idea for a book. The issue is on everyone’s lips. You find a publisher who is willing to pay a nice advance. However, he needs to know your timeline. He removes his glasses and looks at you: “When can I expect the manuscript? Can you have it ready in six months?” You gulp. You’ve never written a book in under three years. Your answer: “Consider it done.” Of course you don’t want to lie, but you know that you won’t get the advance if you tell the truth. Once the contract is signed and the money is nestling in your bank account, you can always keep the publisher at bay for a while. You’re a writer; you’re great at making up stories!
The official term for such behavior is strategic misrepresentation: the more at stake, the more exaggerated your assertions become. Strategic misrepresentation does not work everywhere. If your ophthalmologist promises five times in a row to give you perfect vision, but after each procedure you see worse than before, you will stop taking him seriously at some point. However, when unique attempts are involved, strategic misrepresentation is worth a try—in interviews, for example, as we saw above. A single company isn’t going to hire you several times. It’s either a yes or no.