Are We in Control of Our Decisions by Dan Ariely (Full Transcript)

Vision is one of the best things we do. We have a huge part of our brain dedicated to vision — bigger than dedicated to anything else. We do more vision more hours of the day than we do anything else. And we’re evolutionarily designed to do vision. And if we have these predictable repeatable mistakes in vision, which we’re so good at, what’s the chance that we don’t make even more mistakes in something we’re not as good at, for example, financial decision-making.

Something we don’t have an evolutionary reason to do, we don’t have a specialized part of the brain, and we don’t do that many hours of the day. The argument is in those cases, it might be that we actually make many more mistakes. And worse — not having an easy way to see them, because in visual illusions, we can easily demonstrate the mistakes; in cognitive illusion it’s much, much harder to demonstrate to people the mistakes.

So I want to show you some cognitive illusions, or decision-making illusions, in the same way. And this is one of my favorite plots in social sciences. It’s from a paper by Johnson and Goldstein. It basically shows the percentage of people who indicated they would be interested in giving their organs to donation. And these are different countries in Europe. You basically see two types of countries: countries on the right, that seems to be giving a lot; and countries on the left that seems to be giving very little, or much less.

The question is, why? Why do some countries give a lot and some countries give a little? When you ask people this question, they usually think that it has to be something about culture. How much do you care about people? Giving your organs to somebody else is probably about how much you care about society, how linked you are. Or maybe it’s about religion.

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But if you look at this plot, you can see that countries that we think about as very similar, actually exhibit very different behavior. For example, Sweden is all the way on the right, and Denmark, which we think is culturally very similar, is all the way on the left. Germany is on the left, and Austria is on the right. The Netherlands is on the left, and Belgium is on the right. And finally, depending on your particular version of European similarity, you can think about the UK and France as either similar culturally or not, but it turns out that from organ donation, they are very different.

By the way, the Netherlands is an interesting story. You see, the Netherlands is kind of the biggest of the small group. It turns out that they got to 28% after mailing every household in the country a letter, begging people to join this organ donation program. You know the expression, “Begging only gets you so far.” It’s 28% in organ donation.

But whatever the countries on the right are doing, they’re doing a much better job than begging. So what are they doing? Turns out the secret has to do with a form at the DMV. And here is the story. The countries on the left have a form at the DMV that looks something like this. “Check the box below if you want to participate in the organ donor program.” And what happens? People don’t check, and they don’t join.

The countries on the right, the ones that give a lot, have a slightly different form. It says, “Check the box below if you don’t want to participate…” Interestingly enough, when people get this, they again don’t check, but now they join in the program.

Now, think about what this means. You know, we wake up in the morning and we feel we make decisions. We wake up in the morning and we open the closet; and we feel that we decide what to wear. And we open the refrigerator and we feel that we decide what to eat. What this is actually saying, is that many of these decisions are not residing within us. They are residing in the person who is designing that form. When you walk into the DMV, the person who designed the form will have a huge influence on what you’ll end up doing.

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Now, it’s also very hard to intuit these results. Think about it for yourself. How many of you believe that if you went to renew your license tomorrow, and you went to the DMV, and you would encounter one of these forms, that would actually change your own behavior? Very very hard to think that it would influence us. We can say, “Oh, these funny Europeans, of course it would influence them.”

But when it comes to us, we have such a feeling that we’re in the driver’s seat, such a feeling that we’re in control and we are making the decision, that it’s very hard to even accept the idea that we actually have an illusion of making a decision, rather than an actual decision.

Now, you might say, “These are decisions we don’t care about.” In fact, by definition, these are decisions about something that will happen to us after we die. How could we care about something less than about something that happens after we die? So a standard economist, somebody who believes in rationality, would say, “You know what? The cost of lifting the pencil and marking a “V” is higher than the possible benefit of the decision, so that’s why we get this effect.”

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