ideas42 Affiliate Series: A Talk with Mike Norton

Nov 4, 2015 in Blog

ideas42’s network of academic affiliates represent some of the world’s foremost experts in behavioral science. With the ideas42 Affiliate Series, we invite them to share their insights and what inspires their exploration into human behavior.

We recently invited Mike Norton of Harvard Business School to visit our New York office. He gave our team a fascinating talk about how transparency can inspire trust and deeper consumer satisfaction. Mike is an ideas42 affiliate whose research centers on two themes: exploring and shaping the link between money and happiness, and documenting the psychology of labor and investment. He is a co-author of Happy Money: The Science of Smarter Spending. After his presentation, he chatted with us about why behavioral science fascinates him so much.

What drew you to the field of behavioral science?

I took a social psychology class in college where we talked about the bystander effect and it blew my mind. The bystander effect states that the more people there are who see an emergency, the less likely that person is to get help. This was crazy – obviously, the more people there are, the more help there should be. But the idea is that there’s social pressure. So the more people that are there, the more everyone says, “that’s not my problem and I’m not going to do anything.” People then end up dying. Behavioral science was an amazing way of viewing the world – something in the world is a problem, people are behaving weirdly, can we understand why, and then can we design an intervention to fix it.

What’s one of the most surprising discoveries about human behavior?

There’s a study I like that asks people to look at two faces and pick the more attractive one. The trick is, the guy doing the experiment is a magician. Once you pick the photo, he shuffles the photos in a quick sleight of hand and shows you the other photo. He then asks, “why did you pick that one?” Half the people don’t notice that it’s a different face! It’s a powerful and simple demonstration of how completely clueless we are most of the time about what’s happening around us in the world. Such a simple demonstration but the ramifications are enormous.

Tell us about transparency. How can providing more information about back end processes help improve consumer satisfaction?

My colleague Ryan Buell and I got interested in this a few years ago. Ryan had noticed there were websites that showed the “work” they were doing to search for answers to a user query. He wondered why that was, because, who cares? Websites don’t really “work” for you, so why would Kayak, for example, bother showing which airlines it was searching through before generating your flight options? Ryan’s intuition was that there’s something weird in us where we like to see things working for us. It happens in the real world. We like to see people who are mowing our lawn working hard. We like to see chefs working for us. Ryan then thought, wouldn’t it be weird if it happened online as well where we like to see websites “working really hard” for us? We’ve shown that is the case in many experiments. We like it when websites “work” for us. Now we’re looking to see how we can use that same intuition with government. Government does lots of stuff for us that we’re not aware of. Can we start to visualize some of the services that government provides so that people understand how much is done under the surface and come to appreciate government more

What have you learned in applying behavioral science that has changed the way you work?

There’s this thing called planning fallacy. Planning fallacy is simple: whatever amount of time you think it will take do something, multiply it by a million. If you think this project will take an hour, it’ll actually take ten, or be larger by some other crazy factor. We consistently make this mistake. That realization alone dramatically changes your life. Your stress of not finishing things on time diminishes a lot when you’ve actually thought about how long something will really take you. Understanding our weaknesses in planning forward and backward can really help you. For example, let’s say someone asks if you’re available on some date. You’d normally look at your calendar in the future and commit because it’s wide open now, but could regret it when the time comes and you’re super busy. However, if you look at that date from last year to see how crazily busy it was around that time, it can help you not commit to things you don’t have the time for.

How do you use behavioral science in your daily life (or recommend that people use behavioral science in their daily lives)?

I think one of the most powerful things social sciences has shown is our amazing ability to deceive ourselves. We’ve done lots of research showing that people are really good at doing pretty crappy things and instantly thinking it wasn’t so bad. We’re good at doing whatever we want and coming to see ourselves as great. You can catch yourself from doing it. Whenever you’re about to do something that might be unethical, all these rationalizations come in your head: “it’s not that big a deal”, “everyone else is doing it”. One of the best things people can do is realize those things are happening and stop. So rather than after the fact you see yourself as a good person, you can try to do the best you can, stop before you do it, and preserve the fact that you’re a good person.