The Exchanges

Q What was the first insight you got before you started diving in from your me search? I love that term.

A The first insight from my me-search had to do with the struggle I had as a graduate student when I was in an intense engineering program. I had to take economics classes and computer science classes and all these problem sets, and I would come home exhausted from listening to the lectures that I had to attend, and I needed to get to my work. I needed to do my problem sets and write code, but I also needed exercise Because that was the only thing, frankly, that kept me sane was to be in good shape and moving, and I couldn't motivate myself to do either. I'd come home, and all I wanted to do was curl up on the couch with a juicy page turner or binge watch TV, and I couldn't figure out how do I resolve this problem? I'm not getting any of the things done I needed to get done, and I came up with a solution. I call it now temptation bundling, and I've studied it in me search research, and the idea was I just Only allowed myself to enjoy those temptations, those entertainment temptations when I was exercising at the gym. I actually did it with audiobooks because I found the sensory input from TV was a little too much for my puny little brain at the end of a long day, but I'd go to the gym, I'd listen to the latest in my James Patterson novel, or sometimes it was Harry Potter or Hunger Games, Twilight, pick your lowbrow fiction that's fast paced. I couldn't wait to get there. I'd come…

AI assessment note: “I call it now temptation bundling, and I've studied it in me search”

Q So in addition to your own temptation bundling and your advice group, I'm curious, as you've read this book and done the research, what other of these strategies that you've espoused have you actually put into work in your life?

A Oh my gosh, so many of them, and it, it makes my life so much better. I mean, it was just part of the reason I wrote the book, because I felt like, wow, I actually feel like there is really a lot of accumulated science here that can be helpful to people. One thing I do a lot and is copy and paste. So I mentioned this benefit of emulating other people. My friend, Angela Duckworth, who's a brilliant psychologist at the University of Pennsylvania, we co-direct a center on behavior change for good. We spend a lot of time working together, and one of the things when we first became friends we both noticed we were doing is we'd, we'd see something that the other person was doing that was really smart and useful that we weren't doing, and we would just say, oh my gosh, I have to start doing that. Like, I noticed she would always, when she was walking across campus between meetings, she always had a call scheduled for that time slot, so she was getting work done while she was commuting, and I was like, that is so smart. You get another 30 or 45 minutes of meetings into your day, and you can be done that much earlier and have more time for relaxation in the evening, or just get more work done net-net. So I started copying and pasting that, and she noticed that there were certain kinds of emails I get over and over again. All professors get, you know, like, can I work in your research la…

AI assessment note: “One thing I do a lot and is copy and paste.”

Q other hand, as you think about this, like, let's say you have a good habit formation. You know, you can imagine you're in a great workout regimen, and then you go on vacation, and it breaks it. How do you think about the other side of that, of these periods of times that come up that are disruptive, and trying to maintain good habits on the other side of that?

A Yeah, I love that you asked that because there's this ugly underbelly of the fresh start effect, as we call it, which is that disruption is good when things are not going well. Disruption is good when you have a new goal you need to get motivated to start. But when things are going well, disruptions are harmful. And there's this wonderful study that my former student, Heng Shen Dai, who's now a UCLA professor, did as her dissertation project. She and I had done this work I just described on the fresh start effect together, and she wanted to explore whether it might be a double-edged sword. We had a intuition and some early data suggesting that it might be harmful, and it made total sense theoretically, but she wanted to collect real data on it. So she ran some experiments showing this, but my favorite study is one that she ran looking at baseball players. She looked at baseball players who were either traded Across leagues in the middle of the season or were traded within leagues in the middle of the season and compared what happened to those players depending on whether they'd been performing really well earlier in the season or really poorly. And the reason she compared players who are traded across versus within leagues is one gets more of a fresh start than the other with that change. When you're traded within league, your season to date statistics just keep on trucking. Th…

AI assessment note: “disruptions are harmful. And there's this wonderful study that my former student”

Q If I do it, I'm going to have so much more money that I should be willing to pay something for it. And I'm Kind of getting at, is there a corollary with higher fees in certain structures that people generally tend to want liquidity, they tend to want their money, they tend to want to pay less. What have you seen in terms of the costs of that lockup?

A That's a great question. There are websites that make money by selling you commitment devices, and they're cash commitment devices, where you pay the website to take your money, take your credit card information, assign a referee, and find out what your goal is, and that referee reports to the site on whether or not you've achieved your goal, and the site sends your money away to a charity of your choice, and they have charities you might hate. So they choose contentious charities on either side, like NRA and gun control charities, right? And you pick your poison, and they take a little cut of that, and so people pay fees to have these websites take money away from them if they fail to achieve their goals. So I'd say that's sort of one way of paying in a sense for, it's not exactly for less liquidity, but it's paying to be fined. In the work I did actually about temptation bundling, we offered people who wanted to exercise more The opportunity to pay us to take their own iPod and lock it in a monitored locker at the gym so they could only access it when they were exercising. So again, paying us for less freedoms. And more than 60% of people in our study who, a self-selected group, right, these are people looking for ways to exercise more, but more than 60% said, that sounds like a great service, sign me up. And my recollection is actually one person offered us a hundred dollars…

AI assessment note: “The median willingness to pay was order of magnitude, maybe seven dollars”

Q What's the biggest mistake you've made, and what did you learn from it?

A The biggest mistake I've made, this is, this is gonna be funny for this group. I spent a summer as an investment banker at Goldman Sachs in college, thinking maybe that's the career I wanted to have, and I guess the biggest mistake was that is not the career that I was destined to have. It was the wrong fit for me. I actually, I think I was pretty good at it. You know, I got the offer at the end of the summer, and I could have seen a future, and there were many things I liked about investment banking, and, but, It was a mistake in that it wasn't what I am best suited to. I love my career as a researcher. I could have spent that summer and that time exploring science. And so the big thing I learned from it was what I care about in a career and what wasn't a fit for me. What were the things I loved were that it was fast paced. It felt high impact. I was around really smart people. I loved those things, right? The deals I was working on ended up in the Wall Street Journal. That was cool. I felt like I was at the top of the world. And There were lots of resources. So I loved all those things. I didn't like that someone else was in charge of what I was thinking about all day. I did not like not being in control of my schedule and my time. And I wanted to own my thoughts. And so that's what drove me towards academia. So I found this blend where I could have the fast paced high impact…

AI assessment note: “I spent a summer as an investment banker at Goldman Sachs in college”

Q Of all the research you've done, you know, you start with hypothesis, you do all this testing. What are some of the things that surprised you going in?

A My most surprising finding had to do with habits. And it had to do with a long-held belief that, well-supported belief based on a lot of correlational data, that if you want to form a habit, the best thing you can do is have an incredibly strict, systematic routine. And I thought that sounds right, right? The same time and place every day for this behavior, and that's how we build something that's sticky. So I did this experiment with Google, with a collaborator, John Beshears of Harvard Business School, and a few other folks who were involved as well. We convinced them to let us run this experiment with about 2500 of their employees to try to help them build lasting exercise habits. And we ran a program for a month. And then the question was, how durable would the change in their exercise habits be after that program ended? And I've already caveated a lot. A lot of it's going to disappear, but some of it will stick for at least a little while when you try to build habit. Okay, so we tried two different versions of the program. One version was based on this model we had in mind that consistency is key. So we rewarded people and encouraged them to exercise at the same time every day when they went to the gym. And we got people to make their gym visits so that there were 85% of those gym visits that they made during the course of this program were in the same two-hour interval wh…

AI assessment note: “My most surprising finding had to do with habits.”

Q this plays out in settings where they're either zero sum games or it's not just a positive for everyone. So study habits, everybody could have better grades, but in investing, you could think if someone has a novel strategy and other people start copying it, it may not last. So how do you think about where conformity in those situations sort of is beneficial and where it might not be?

A Such a great question. So interesting. It certainly seems like in that context, right, you're going to get benefits if you're a fast mover, unconformity, right, if you follow the herd quickly enough. But you're right that if you wait too long, and you conform slowly, then there's likely to be little benefit left. And perhaps, you know, you'll even get stuck holding the holding the stock that was a bubble, right? And you bought it at the high. Oops. I'm just thinking about GameStop. So it's a challenge for sure, and I think this is a really interesting thing about conformity, is that just like fresh starts, there's pros and cons. It's like a double-edged sword, and that's really the way I write about it in the book, as it can be an asset if you harness it correctly, but it also can be a barrier. It's hard to know what to say in terms of how do you detect when it will be one or the other, Like, how do you know? And it probably, I feel like if I were a mathematician, right now I would try to write a model of what fraction of other people need to have already taken this action before it ceases to be advisable for you to follow, and you could sort of imagine trying to figure out the moment when it tips, and you wouldn't want to be conforming because now in a zero-sum game you're actually losing out. But I guess Like, short of having a precise answer, I think the best answer is the f…

AI assessment note: “the faster you jump on the bandwagon, the better, and if you feel that you're late”

Q We always run into these situations where you've started at a fresh start, and you've considered these things, and then, you know, whatever it is, losing weight, a better diet, it just kind of dies down. So you mentioned this up front, and I know you closed the book with this idea of like, how do you make these changes last?

A I think this is the most important question. How do we make change last? And if I've spent the last 20 years studying change, I think I'll spend the next 40 years, hopefully, I hope to have a good long life and a good long academic career, learning more about this, because I think we've only scratched the surface. But I will say, for a while, when I was doing this work, I had a fantasy that I have since abandoned. And the fantasy was that there was Sort of a silver bullet, a solution, a set of techniques or tactics that if we just focused on for a short period of time, that then forever after you could have created change. And I no longer believe that. What I have found in my research and And so many others have found too, is that it's really about consistency and treating these obstacles as chronic rather than temporary. And I had this wonderful conversation with a collaborator and friend, Kevin Volpe, who's a medical doctor who studies behavioral economics. And I think he said it really beautifully when he pointed out that when we're treating a patient who comes in and say has diabetes, um, We don't expect to sort of put them on insulin for a month and then take them off and have them be cured. And we know that it's chronic and that they'll need for the rest of their life to use the strategy, in that case, insulin, to solve the problem. But we think about behavior change diff…

AI assessment note: “it's really about consistency and treating these obstacles as chronic rather than temporary”

Q And so what can we do as individuals?

A So my favorite insight in the chapter comes from research that was done by Lauren Eskress Winkler, who's about to be a new professor at the Kellogg School of Management at Northwestern. And she had this really brilliant insight when she was studying people and trying to figure out what separated high achievers from low achievers and doing all these interviews. And what she was really startled to discover was that Even low achievers had a lot of great insights about how to be more successful. So salespeople who are struggling, students who are struggling, they weren't quite as clueless as she had envisioned. And She felt that one of the big barriers, though, was they lacked confidence in their abilities, and this seemed like it was a big blockade. She noticed that over and over again, they were being given advice when someone heard that they were struggling. Someone sort of put their arm around them and give them a bunch of advice. Here's my tips on how to get better. That was actually really quite discouraging to have everyone you meet doling out their two cents as if you had no insight into your own condition and, and how to get better. And she wondered, what if we Flip the script. If confidence is actually part of the problem, what if instead of putting our arm around someone's shoulder and coaching them, we actually asked them to coach someone else? What if we asked people w…

AI assessment note: “what if instead of putting our arm around someone's shoulder and coaching them, we actually asked them”

Q top and then maybe I'll just pick out a few and particularly we can keep going back and forth on this personal behavior change and some of it relating to the financial markets and investing. So getting started, obviously what comes to mind are New Year's resolutions or goal setting or whatever it is. So what is it that helps people get started when they're trying to make change happen?

A Well, first, I love that you said what comes to mind is New Year's resolutions, because that small insight that New Year's resolutions are sort of a special moment is actually what got me going on research on getting started. So I was giving a talk at Google about some of my work on how we could nudge people to make better financial decisions, better decisions about their health, and I got this question that was so, I thought, important and unstudied as far as I could tell, which was, okay, Katie, we're convinced that we should be using these tools and tactics to change our employees' behavior so they'll be more productive and healthier and more excited, but is there some ideal time to provide them with These opportunities, is there some ideal time to give them a nudge? And I had the same insight that you just mentioned. New Year's resolutions. I know New Year's is a thing. 40% of Americans make resolutions. Something's going on there. There's something about that timing. But what it led me and my collaborators to realize when we started thinking carefully about this question and this problem is that New Year's is actually just one moment that has a feature that's really important, and it's shared by all these other moments. And that feature is that It feels like a new beginning. It essentially marks a chapter break in the way we think about time. And when we encounter a new be…

AI assessment note: “that feature is that It feels like a new beginning. It essentially marks a chapter break”

Q So I guess that leads us right into procrastination, so even in that situation when we know that's the outcome, what are the things that prevent us from jumping on that bandwagon early?

A Yeah, procrastination is such an interesting, an interesting barrier to change, and it relates closely to impulsivity. It's sort of like what happens due to impulsivity is that we put things off that we should be doing because I can always get to it tomorrow, but today I have something that's more instantly gratifying. What I think is really interesting about procrastination is that the best solution seems to be a solution that That we're really used to having other people impose on us, but uncomfortable imposing on ourselves. So let me explain what I mean by that. It's common for the world, or, you know, I'll say policymakers, teachers, parents, to set up rules and regulations and systems that help us avoid procrastinating or making impulsive decisions. So things like deadlines in school for your assignments instead of everything you have to do for a class all being due at the end of the semester at the same time. Help us not procrastinate, and we're very used to that. Speed limits help us make the right choice in a situation where our impulses would lead us astray. We're used to being fined for bad behavior or having rules imposed on us by other people, but we're not so used to imposing them on ourselves, and the best scientifically proven solution I've seen for procrastination and for a lot of willpower problems is actually constraining ourselves. Using what economists call …

AI assessment note: “it relates closely to impulsivity... today I have something that's more instantly gratifying.”

Q couple of things. You walk through the other side, which as you mentioned, all these obstacles and how to get past the obstacles. And I'd love to just pick apart a few of them. And I want to start with confidence. So why don't you first describe, you did a little bit earlier, but what is it that is the obstacle that confidence creates in trying to make change happen?

A Yeah, it's funny, and I have to say, by the way, that it was a little bizarre as a behavioral scientist to write a chapter about boosting confidence because we spend a lot of our time. One of the things I teach all my Wharton students is we're all overconfident. We all think we're above average, and it's really harmful, and so it is peculiar to be focused on it, but of course, while it's harmful to be overconfident in many contexts, if you're trying to pursue goals and you don't believe you can, You don't get as far. And in fact, overconfidence, while I would never prescribe it, but it does have some advantages for goal pursuit. And you can see why it might even be that we ended up with that trait in the first place, that, that it might get you up in the morning. So it was funny to write this chapter, and it was funny, actually, the first piece of email I got complaining about my book was from a scientist friend who studies overconfidence, who was like, are you sure you should have had a chapter that was telling people to be more overconfident? And he was right. I tried to walk the line and said, yes, I agree. People are generally overconfident. That's bad. However, this book is about what are the things we can do when we see a barrier? And one barrier is sometimes people just don't believe they have what it takes, and so they won't put in the effort. They won't lean in. And I …

AI assessment note: “sometimes people just don't believe they have what it takes, and so they won't put in the effort”