« Freakonomics Radio

112. Would You Let a Coin Toss Decide Your Future?

2013-01-30 | 🔗
Levitt and Dubner go deep on "Freakonomics Experiments," a new research project that lets you take a chance on life.
This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
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If you ask Daniel Harrington to introduce himself tat what he does. This is what he says: How can our four are the Levant Research Projects Agency for energy, within the Department of Energy But if you ask him a question two years ago we were gonna different answer. Its main Danube FED hide their heritage and I'm a professional rate forever. Harrington is twenty six two years ago he was risk or driver It was doing our a few good finishes in India. Car raises a few million dollars and sponsorship, but
it wasn't setting the world on fire? He started thinking about other options. It was a hard decision. I felt I thought I might have no data base a flash of doing less care, terrible feeling that, during this period of harringtons indecision, we but I d, podcast called the upside of Quitting Harrington. Listen to it. He stared his indecision in the face, and he quit driving race car for the most part at least went back to school. Duke gotta masters and engineering management, and that led to a very good job at the Department of Energy and Rollin North Carolina. He advises teams who receive government money,
to develop energy technologies and he likes the work. But a familiar feeling has already come back to him. I know if a baby I forgot fires is revealing about me. I'm trying to decide what action we, what I'm doing now and go, do something else or a more hand. Honour, not that's right. Daniel Harrington is thinking about quitting again to his credit. He acknowledges that he's a pretty indecisive guy with big things like his career, but even simple decisions like we're to eat what movie to see for the smaller decision, so he's come up with a solution as regards labelling inclined or doing right. There's a there's that my group and I are both free and does so. We start out with a list of irresponsible and rapid procedure that out and we got a winner- is actually at each of us ever so well.
Although I was doing it for years when the stakes are low, like picking a restaurant or movie flipping a coin is easy, but you never do that for a really important decision like a big move or spouse or new profession. Would you or would you from W and Y see an ATM american public media? This is brief: economics, radio, podcast that explores the hidden side of everything. Here's your host Stevens Abner,.
He's so love it. You want to try something over different for the progress today. Yeah yeah, I think I'm more excited for this Pakistan for any of the hundred, plus that we ve ever done, which isn't saying much in urban and this time I'm really exist? Steve Levitt, is my free economics friend and co author. He is the first to admit that most of our stories are fact based, entertainment, they're, not really meant it in general we dont think we know the answers that in order to be help, are you really have to think you ve got the magic serum that will get people to the right answer and that's not really are style is not very often that what we do translates directly into real positive changes in people's lives, but then there was at one episode, the upside of quitting. We raised the possibility that the old conventional wisdom you know a winner, never
quits and quitter never wines that it might be for some people and, in some circumstances, just wrong. We talked about the sunk, cost, fallacy and opportunity cost, and we suggested that overall quitting has a bad rap, but that strategic quit You can actually be a great thing. We heard from a man who quit his dream: job running the: U S, department of Labour. I made the decision that shortly after the election I would leave and then one day I went in Sicily, Oval office and explained the president that I just I just felt that I had no choice. He was
very understanding about it, we heard from a woman who quit a good. I t job to become an escort, outcries, always scary, to leave behind something that some kid and and go with something that maybe isn't considered that it now. I know that was the right decision from me. For me, I have a problem with having sex with strangers. and from a woman who quit her religion? The upside of it is there have been so many times, many moments in my life when. I knew that. Being the Amish was the right thing to do even Steve whether it is a big fan of quitting alot of people. You make choices without lot information, and then you get new information and quitting is often the right.
I tried it taught my kids in acquitting soccer baseball than I couldn't. I mean I've never had any shame, including pretty much quit everything that I am we got a lot of emails after that quitting episode from people like Daniel Harrington, is car driver from people who were thinking about quitting their job, their marriage, their passions or what they had thought were their passions and famine CAFE in Pakistan of California, and I guess I'm an adventure, men Tessie wrote to us about her running habit. I've I've been active, I still am active, but after a while I this kind fell out of love with running and that I really just found it was. There
hard. Because what else we are you you gonna do you bought that you know the shoes and you ve got said rose in. You belong to all the running class. The thing your friends all think of me who is a runner in. I think you can also define yourself that way that just kind of falling to the habit, even though you're not time it anymore. One day she went out for a run with her.
I pods that when I still think about that red eye with headed out I'd made it to the end of the block, with a beautiful day with delight here in California, and I just by the term in it, I had a ball a couple of weeks before my ankle with those little boy in it. I just did not want to do this, one bad there with my schedule to do it, and so I headed out and they upset acquitting, came on and I deem and put it together at the time- and I probably was about fifteen twenty minutes into the park cast when I realized tat. This was the pod castaways tend to me on this day and It will be my last run. They had given me permission to quit with. I think I need I needed something to tell me. It was ok and I got home in Pakistan.
I quit so let the upside of quitting episode that turn to be probably your favorite that we ve ever done. When you say you I have to admit, I thought the terrible idea when you brought it up. If you totally idea, I thought it would be a total by my humor. Do I said: that's fine, you do you do other work, that's great, but it was really. I was stunned. I'm willing to listen to evidence and have my mind changed and if the flood of emails, we got a people who heard that podcast and were prompted to to make a choice to actually quit something that they had somehow known inside them. They should quit for a long time, but hadn't been able to do it until that podcast feed them up
It really got me thinking when it comes to these big decisions that people face in their life should day quit their job or should they will cause? Should they go to war? You know: should they go on a second date with a certain person nor and a relationship that would we could we possibly have something to offer? That could really be useful to the people within the show, and I think the answer is yes. Ok, so, as you may have sensed by now, this conversation is leading somewhere to a real thing, or at least a real experimental thing that will take real people with hard decisions
to make and will help them make those decisions. So many people said he should I quit their so should I do that and how would we know I mean we ve, no idea. We all know these people who don't know anything about them. There's no way we could give in entails mounted to that question. But it got me thinking and really what's the best we can do is weakened, give people who are having trouble deciding a framework for thinking about those decisions and in certain circumstances, maybe we could do some experiments, which would both help us and our research and also help the people in so out of this was born a new website that we have that you can link to either through the different economic to a page or go directly to free economics. Experiments tat come and essentially what this page will do is if you ve got a tough question and you can't regret what the answer is. We will walk you through.
few steps and then, if you still undecided as to what to do, we will do you a huge favour and the huge favours. We will flip a coin for ok and if you really uncertain you have the option of flipping best too, three. If you really want to make sure that the that that the gods are give you the right answer- and all we ask is that in return for us helping you try to come to a decision on whatever important problem facing that you besides by filling out a few short surveys, and what we want to do is conduct real research in the real world to figure out in the end, yes or no quitting or not quitting leaving are not leaving darting or not starting, turns out to be good or bad for the people who make those decisions. So what we're looking for is people,
who we should clarify little bit there there on the brink or at least to entertain a pretty big decision ray it's not like whether to buy. You know this the little I patter, the regular size Ipad No, that's! Ok, we'll take anything we take. I convert that it's cheaper going, so if you have any the city wipe out, but we care about the big decision makers. What's interesting to me is that what economists are always trying to figure out is at the margin. So when you just you know, you're a little bit to one side of it no limit to the other? Would it would have been better to go one way or the other, and the problem is in the real world? You don't get to live to life, I mean all of us. I think would like to say in. I wish that I could see what life would be like if I broke up with this girl or
I didn't break up with this girl they and then I want to see my life ploughed, not be up to make the right decision, because you can't you don't you you there's a lot of uncertain you're, not sure that the kind of problems that people have the hardest time deciding about typically are important problems, problems in which, depending on what path you take, your life will be very different, but much as you think about it, you just can't figure out what your life is going to be better or worse and know it's going to be different. I think those are the exact kind of problems in my own life, if I, as I've, tried to make decisions, I've really come to the point where I throw up my hands and it's you know: how do you decide if that's a coin flip a coin flip If you have even a shred of common sense were probably thinking
What a peace one of the most important decisions of my life on a queen flip when we come back Steve, lived, explains why this is as ridiculous as it may sound. Britain, I'm ready with sponsored by wonder, is business movers podcast when Coca COLA changed their recipe to what they called new Coke in nineteen eighty five, the backlash was swift and severe, and The man who drove the change German Robert boys wetter pulled nuclear. From the shelves in a matter of months wondering, business movers explores boys what is controversial decision and the public response, but the real story of new Coke is far
more human and complex listen to wonder? Is business movers podcast on Apple, podcast, Amazon, music or ad free in the wonder, happened thanks to Pennsylvania, lottery, scratch, ass, pennsylvanians or scratching their way to fine? And we New games every month, big top rises and second chance, drawings, excitements, always in order so Try, Pennsylvania, lottery, scratch, offer your ticket to fund and get yours today. Keep on scratching must be eighteen or older. Please play responsibly benefits older pennsylvanians every day I am giving Jacobs and I'm Deanna reasonable. We ve got a new podcast called if then worried basically talk to scientists, engineers, NASA folks, just a bunch of really smart, curious people about cool stuff Julian, I think most people, Are you from your work on love and community and must be
No you, as forensic scientists, Casey Heinz on Anti I ass. So we were both actors for what most, Well, don't know, is that we're both really curious and passionate about stem if we have a more the first outlook in how we look at science and engineering and technology and map, then what It is possible. I get giddy when I get to speak to these people, carriages and tat back into my curiosity excitement. You know that I have about all these topics. So come This journey with us, as we learn from some of the poorest smartest people in their fields? If, then, is out now just search, if slash than to find the show that, if slash then knows exit, listen in stature apple, the serious ex em up or wherever you get your PA casts.
from W and Y see and eight p M american public media. This is for economic radio. Here's your host Stephen Governor Steve. Levitt has a brazen idea. He wants to turn your life into an experiment way, there's really better way of of putting that about this. If you ve got a hard decision, your life, something you just can't quite commit to love, it wants to help you make that decision by flipping a coin for you on a website seriously. It's called for economics, experiments that come when you ve come to appoint life. We have to make a decision and you don't know what to do.
It's it's costly right use. You spend an enormous amount of time, fretting about it, but you don't know the anti VERDI pruned yourself that you dont know which is better and so consequently, the release that comes with having someone else, in particular This discussion, which I want to emphasise, is truly around, I'm going to me, I had some people might think. Oh, this is some kind of track or their up to some kind of hiding. Absolutely not I truly randomized Goin, based on this very complicated swiss algorithm. That's been developed at random, notation and the release that comes with. You are able to simply say, ok, the die is cast. This is what I have to do. I think that will be real benefit for people who are tied. not okay. So let's say that I'm thinking about leaving a relationship or leaving a job or quitting college or move moving at my gaze dumping smoke on a diet, k and
and I hear you talking about this- I say that I like the idea, like the idea that there's a different way to think about this- that I could think about these things at me, no economist, talk about the sunk, cost fallacy, an opportunity cost, and yet I should reassess at, but then I hear you talk about that. You flip the coin. For me to make the decision. I think that's that that central bit ridiculous doesn't love it. Can you see, can you understand how people might think that sounds ridiculous? we're not gonna flip declaimed runaway first before we slip applying we're gonna make you think a little bit about why you might want to state your job or leave your job and we're gonna. Ask you some questions and, for instance, we're gonna. Ask you about walk on a job it is and how long you been there and what knew? How how you feel on various levels, about the job and what emotions are elicited when you think about going Benda, grad school and I think for a lot of people by the time they get done with this very short survey, maybe take you five
I meant it. I think you may have figured out for yourself what you want to do. In that case, forget it. You need to flip. Any coins is, go, do what you want to do it, but for those of you who who go to that process and still are completely perplexed as to what to do, we will flip a coin, and one of the great virtues I think of having us flip the coin is that the biggest fear people have about making decision is regret. I wish I hadn't done that, and I actually think this pretty good psychological evidence which suggests that if you let us flip the coin for you, you will feel less regret. Whatever happens to say well boy listed turn out great. But look, I'm part, I'm part of a research project, I'm I'm helping other people by doing this, and I gotta know what happened if I'd done. The other thing- and I should have felt a lot worse if I hadn't let someone else flip the coin. For me
and when we ask you, when we put the going to make a pledge that you will say when quitting your job that debt, if if the coin comes up heads that teen in your best intentions, you you'll actually try to leave that job within a couple months and then, if it doesn't come a page you'll try to commit to us that you will stay at that job for a couple months: ok and then used in touch with me in either case. Yes, whether I stay or leave the absolute. So we must let the going for you and you're gonna go away. Now, live your life. And then a month or two later we're just gonna? Send you an email there, this hey, would you mind coming back and in return for some super cool FR economic swag. Would you take a five minute survey? Just tell us a little bit about about your life now and what you doing, whether you did quit your job. If you did how you feel and then you know, maybe six months later, we might send you another five minute survey and me A year later, another survey of people keep financing servies equal. and you another one. Ten years from now will be rate if were still alive and people
don't answer your emails, and that will be wonderful. you do someone rights in and says that their thinking about killing someone else who may be killing themselves Oh that's a hard one. I think I I We would have to talk to our institutional Review board about that. and I don't know the rules, I'm not sure, but you know what we have in effect Q on the website, and I think it would be smart of us to put up an ethic units as if I am about to kill someone, and I asked you to toss a coin. What will you do and it works. You know I will do after the barometer figured out, because I had really as it is mended as I am that haven't, hurt me anti, just brought it up right now what Let's go down the morrow ladder than a few rungs and say I write into and say I work for this company and I'm a good
worker there, but they are void of in a number of ways, and they make a lot more money than they should be making. Because of my labor and variety reasons. They don't come to mere other employees. Well, and therefore I found a kind of clause I legal way to embezzle. What are you can't? Can you help that person with the decision? You know the way the software works. I think it probably will help them decision. The real question is: are we required by law to report people who say they want to do illegal activity? And I think the answer is definitely no. I think it's only if you're gonna kill one that were required to tell somebody. So I think anything short of killing is is fair game on the site. I'd be very curious in the upside of quitting podcast. We may we talk to some a couple of two women, one kind of middle age. When younger who had left their religion, they happen to be Amish Anna, that's it kind of quitting that doesn't really get discussed. That much because and it's interesting cause. It's got some dimensions to
It's not just a religion, but its year, often family and community, and so on. Do you expect that you will incur that? Would you like to encourage you think that something you can be helpful? I think that's a great question. the fact that is one of the very question that you will find the web page is. Are you thinking of law? religion end and will put the quaint for you there as well, not just to be clear if you do go to free economics, experiments Come your data will be anonymize and any kind of decision is fair game. Anything you're having hard time with short of harming yourself for somebody else.
And, as a result, start to come in you hear about them in podcast, maybe in books that we right down the line limits. Academic partner in this project is John List, another economist at the University of Chicago and John List. For those of you who read super phenomenon always without question. In my mind, the greatest experimental economist who dares experiment in the real world is really completely transform the way economists think about doing research and in going from being collectors and answers of data capture creators of data and what we're doing here with economics experiments tat come is something that I don't know that anyone ever done it before, which is due to take the experimental approach of economics to run really important real world problems with real world people? living their everyday lives and then try to measure whether those decisions turn out to be good or bad
decision? So it's really for me. What gets me excited- and I am sure you can sense maximum- is the idea that were taking economic research to a place. It's never been done before and really in some way democratizing it to the extent that anyone- now be part of this process. So what do you expect to learn Oh well, I know what I hope to learn is whether or not there are any may be big, systematic rules that we could tell people about decision making. So, for instance, it may just be the case. People rarely make the big changes, but the people who make the big changes are chapter in their lives after they make those strange so there's a status quo by us until this is over thousands of people making real world big decisions, we find that the DE changers, the ones who who shake up the status quo to do better. But if that's true the net, that's really
port messages. What that means is whenever you're on the margin, you should have a default rule, which is I go for the change. Fixed do I know that will happen. I have no idea could be just the opposite could be. We should never do. Any big changes were always better off, leaving things away there. We might learn that as well, but it's the fact that I have no idea what the right answers, which gives me so into arrested in going out and for the first time, trying to to measure this and learn about it. Beauty of of the quantities is because we're isolating it down to the people. Who truly could either way and are happy to do either one they just don't want to do that were really going to get something that, like a causal, affect its timing, is you know I've spent my entire career trying to distinguish between correlation and cause. I, and through this coin, toss we're we're gonna have the best mechanism. That I've ever heard of four figure out whether big decisions are made properly or know how many people would you like to get involved in these experiments? How many people would you need to make it to accomplish?
what you wanted to accomplish, where too great a hard to know what it partly depends. Whether people really hum will live by the coin toss or not, but ya. My hope is that it's fun for people on top of everything else, and so people will want to do it. I hope that in the people want to do it, I hope it decanted goes viral and everybody in o becomes a thing where win win win you, so oh tired of hearing your friend go on and on and on days and weeks at a time about, should I do this wishy washy that you take her, do just go to freak out with experiments I'll take care of it for you
remember how in the progress you just heard Steve live, it talked about how much he hates his wife's family. No, he didn't actually said it. I'm just trying to plant a false memory can possibly work memory. You know it's full of true experiences, the things that really did but it probably contains bits and pieces of fiction more than were even aware in a recent study. Half the participants remembered a false, then its next time trigonometry. Fr Economics Radio is produced by W and Y see ATM american public media and debonair productions. Our staffing,
Susie, lack timber, Catherine well stated Herman Borri, Lamb and Chris Bannon calling Campbell is our executive producer. If you want me fr Economics, radio. You can subscribe to our Pakistan Itunes or go to free economic com, we'll find lots of radio a blog for books. more.
Transcript generated on 2021-03-15.