Predictably Irrational - basic human motivations: Dan Ariely at TEDxMidwest

Transcriber: John Mackenzie Reviewer: Sebastian Betti OK, so I want to talk today a little about human motivation. What gets us to care and act, and be active. And the starting point, especially being in Chicago, close to the University of Chicago, in the Economics Department of Chicago.

I think it is worthwhile to think that our basic idea about human motivation is that we think about people like rats. People don't like to work. If we were left to our own accord what we would be doing, we would be on a beach somewhere sipping mojitos.

. . And the ony reason we work is because we need to get money, so that we can eventually sit on the beach drinking mojitos.

(Laughter) But the basic motivation is to enjoy leisure and not work and everything else is just a distraction in order so we can do that. And it is a fine model, but we should ask ourselves, is this a correct depiction of human motivation is this really what gets us to act and to do things. And one challenge you can think about is mountain climbing.

If you look at people who have climbed different mountains and their depictions, and histories and stories you would think this is the most miserable thing in the world. People are cold, and have frostbite It's hard to breathe, it's difficult. I climbed a little peak in the Himalayas many years ago and you would think that you would get to the top, and sit there and enjoy the view.

No! It's cold, it's miserable, you're tired. Just go down as fast as possible from that point on.

(Laughter) And if you think about this behavior and say to yourself, here is something that every moment seems like agony, it just seems like a punishment and people go down, and all they want to do is go up again. They want to recover first, but then they want to go up again. How does this view fit with our notion of people sitting on the beach drinking mojitos?

It looks like people are either suckers for punishment. Right? We want to punish ourselves.

Or, that what really motivates us is not relaxation, it's not comfort, it's other things. It's about achievement, it's about conquering, it's about pursuing some goal, it's about arriving at some peak. I actually became interested in this topic when one of my ex-students came to talk to me.

His name was David, he left university a few years earlier and he became a consultant, or some banker on Wall Street. And he worked for a big bank and he told me that for a few weeks he worked on a big presentation for a merger that was going to happen. He worked evenings, he worked overtime to create this beautiful presentation with statistics and graph and description.

He was really proud of his work, and he really enjoyed it. And then he sent it to his boss, and his boss said, "David, great job, the merger is cancelled. " And he was just devastated!

And the interesting thing about this is that he said that from a functional perspective everything was great. Here he was, he did a good job, he enjoyed it while he was doing it, his boss appreciated it, and he was certain that he would get a raise when the time came but at the same time he couldn't care now. And he was working on another document now, and just couldn't care to the same degree.

Now the question is, what happened to him? What is it? Everything functional was OK, but something was missing.

So to look at this I decided to do a couple of little experiments. And the experiments we started with were about building Bionicles. So, Bionicles are little Lego robots, with about forty pieces, and you're going to build them.

And we got people to come to the Student Center and we said, "Hey, why don't you build Legos for money? " You want to build the first one? You can get three dollars for it.

After they finished the first one we asked, "Do you want to build another one? " "This one you can get $2. 70 for.

When you've finished this one, do you want another one, for $2. 40? " $2.

10 $1. 80 And so on at a a diminishing pay rate. And people basically had to decide when they want to stop.

At what time, the money they were getting from building Legos was not worth their time. And we did this in one of two conditions. The first one was just the way I described to you now.

People build one Lego after another, after another, after another and when they finished building all these Legos when they finished building each of them, we took them, we put them under the desk and we told them that when they finished the whole experiment we would take them, we would break them back, and we would put them back in the boxes for the next participant. This is what we call the 'meaningful' condition. Not a really big meaning, we are academics, but little meaning.

(Laughter) The second experiment, we called the Sisyphic condition. And in this experiment people started building one Lego and when they finished it we took it back from them and said: "Do you want to build another one? " And if they wanted to build another one we handed them the second one, but as they were working on the second one, we were taking apart the first one in front of their eyes.

And then if they wanted to build a third one, we would give them that one back So it was a complete recycling. And we called this the Sisyphic condition, after Sisyphus, who pushed the same rock over the same hill over and over. And we can ask ourselves how much of the demotivating aspects of Sisyphus come from the fact that he pushed the same rock on the same hill versus if it was a different hill every time.

So building something, having it destroyed in front of your eyes and building it again seems kind of an essential element for being unmotivated and here is what we got. In a meaningful condition people build about eleven robots and in the Sisyphus condition they build seven. We also asked other people who did not participate in the experiment to predict what would people do.

How much more would people build in a 'meaningful' condition than in a 'Sisyphic' condition. And people predicted correctly but dramatically underestimated the effect. People thought that the difference would be about one robot but the difference was much, much larger.

So we all understand that meaning is important we just dramatically underestimate how important this is. And I will tell you that I recently went to give a talk at a big software company. And this was a company where a group of people worked for two years designing a particular product, and they thought this was the best product for this company.

And after two years of working on it, the week before I came, the CEO cancelled he project and I've never seen a group of more demotivated people in my life. And they all told me they felt like they were part of this Lego experiment. They worked for a long time and something was just destroyed in front of them.

And I think basically their boss had the same mistake as our prediction experiment where he understood that meaning is probably a little bit important, but just didn't understand how big it is and now he had a group of people who were completely demotivated, and so on. Now, there was another interesting part of this experiment which is if you look at the correlation between how much people love Legos naturally and how much they persisted, you would expect that people who love Lego would build a lot and people who don't love Lego would build a little; there would be some individual difference. And indeed there [were] individual differences In a meaningful condition people who loved Legos built more and people who didn't love them didn't build as many.

In the Sisyphic condition the correlation was zero, which tells me that we basically choked every inch of enjoyment people had naturally from Legos. People come with a natural appreciation for Legos, some people, and we were basically able to crush that. .

. (Laughter) So, the next experiment we wanted to find out what even smaller differences could make. So we gave people a sheet of paper with a lot of letters on it and we said, "Look for two letters next to each other that are the same," it was a random set and we did the same thing.

We paid them more for the first sheet, less for the next sheet, and so on. And we had three conditions. In the first condition, every time you gave me a sheet, if I was the experimenter, I would ask you to write your name on the top, I would look at it like this.

I would say "Aha! " and I would put it on the pile. In the next condition you didn't have to write your name.

I would just take the sheet of paper and, without looking at it, I would just put it on the big pile of paper; no acknowledgement, just putting it down. In the third condition, if you gave me a sheet of paper, I immediately took it and shredded it. (Laughter) And now the question is how much would people work in those three conditions.

And what I'm going to show you here is what is the minimum amount of money people are willing to work for, right? How long did it go, so low amounts of money mean that people enjoy it more. So we got the replication on the first result.

In the acknowledged condition when you say, "Aha! " people were willing to work up to $0. 15 per page really low wages.

In the shredded condition they wanted twice as much money and the question is, what happens in the ignored condition? Is the ignored condition like the shredded? Is it like the acknowledged?

Is it somewhere in the middle? It turns out it was very similar to the shredded condition. So if you really want to demotivate people shredding their work is really good for that.

(Laughter) But it turns out that simply ignoring them gets you a big part of the way, in fact, almost. . .

(Laughter) So this was one part of motivation, it's about feeling meaning for what you are doing and acknowledged and so on, and we mostly did this by destroying people's motivation. Let's think for a second about the other part, that is how we can get people to be more motivated. How we can get people to do more and, the idea came to me here after going to IKEA so I don't know about you, but I like IKEA but every time I get this furniture, I find myself that it takes me much longer than I expected to build this and the instructions seem confusing.

I often do a step and then have to backtrack and when I have to guess something I think I guess wrong more than 50% of the time. Lots of these things, and the thought is: Is it that a result of this? Do I love my furniture more?

The fact that I have to build them, that I create them, does that create a particular attachment between me and my furniture? I call this the IKEA effect And some evidence for this exists from cake mixes. So when cake mixes came up in the fifties to the surprise of the people who made up the cake mixes they were not very popular and the question is, why?

Pie crusts were popular, cookies were popular all kinds of other ready mixes were popular, but not cakes. And one of the theories was maybe people didn't have to do much for these cakes maybe if you take a mix and add some water put it in the oven and then make it and someone says, "What a great cake! ," you just can't feel good about it.

Maybe it was the fact that it didn't require as much work that made cake mixes not as appealing. This was known as the 'egg theory. ' And what they did to test it was, they took the eggs out of the cake mix.

All of a sudden the cake mix was the same, you just had to add eggs and some milk to it. What happened now? Cake mixes became much more popular.

Somehow having to put work into something makes it more appealing. We decided to try this out, so we gave people instructions to do origami on the top you have the -- (Laughter) -- on the top you have a list of what all the signs mean and then you have a list of instruction of how to do origami that is not that easy to do and we asked people to do it. And what happened?

People created stuff that didn't really look like what it was supposed to, these were not origami experts. But if you looked at how much people valued the origami there were some auctions and people could bid for it, and so on. It turns out that people who did not build the origami thought it wasn't that exciting, and people who built the origami thought it was just fantastic.

People who built the origami thought it was great. But, moreover, people who built the origami when we asked them to predict how much the other people valued this origami they thought they would value them as much as they did. So what happened is that the people who build the origami not only thought it was wonderful, they also thought that other people would view it their way.

Now we had another condition that was again going back to IKEA we had people who got easy instructions and for some people we hid the top part so they didn't really have the rules for how this works out and unsurprisingly they built even worse origamis they were much uglier. (Laughter) What happened to the evaluations? People who built it thought it was better than people who just evaluated it, but people who got the hard instructions liked them even more all of a sudden they put more into it, it was more difficult, more challenging they loved it more.

And what about the people who evaluated it? They loved it even less because it was objectively uglier. (Laughter) I think we can think about a good metaphor for this as kids.

These are my kids by the way. And imagine that I asked you, "How much would you sell me your kids for? " Imagine I could erase your memories and your thoughts and your emotions about your kids, how much money would I need to give you to compensate you for that?

Most people on good days would say lots and lots of money. Or imagine that you didn't have kids and you came to some playground and you met some kids and you played with them for a few hours and after a few hours you knew a lot about them and as you said goodbye the parents of the kids said, "By the way, they're for sale if you're interested. " (Laughter) How much would you pay?

And most of us would realize that not that much because the fact is -- (Laughter) -- the fact is we value our kids largely because they're ours. And a little bit like the IKEA furniture it's because they're ours and we put so much effort into them and because it's hard and complex and difficult, instructions are not clear, and so on. (Laughter) So, what I want to propose is that you know we have this incredibly simple model of labor -- motivation is payment, that's basically it and if you think about what we do in the workplace it's basically the model we use.

But this is not the right model in fact if you think about anything that you see in the world, it's very hard to think that this model is a good description of human behavior. It doesn't describe zero, but it definitely is not a really good description of what happens. In reality we have lots of other things we have meaning, the feeling of creation, challenges, and so on and so forth.

And unless we understand those different elements I don't think we could create the right environment. Now just this one side comment, we can take money and we can make it fulfill other motivations. For example, we can get pride, and get people to be proud of how much money they get.

We can get accomplishment, we can get competition money can be a substitute for all of those other motivations but it doesn't mean it's inherently about all of those motivations. Human beings are complex, and have lots of things that we strive for like in mountain climbings, and reducing all of it to just what salary we're getting is just not the right model. And finally, I wanted to tell you something about Adam Smith versus Karl Marx.

Adam Smith has this notion about efficiency in the workplace. The notion was, if you take for example the creation of a pin in the old days, and you say: What's the efficient way to create a pin? He says if one person creates all the steps to make a pin, it's incredibly inefficient but if you get twelve people, and each of them makes one step of creating a pin, all of a sudden, together, there's a huge efficiency in production and the output from the factory can be dramatically higher.

And that was the notion of efficiency and productivity. Karl Marx, on the other hand, had this notion about the alienation of labor; how connected do you feel from it. And if you take the creation of a pin, and you make it into twelve steps, and each person does one step how connected do people feel, if they're doing the same thing all the time all day, they never see the progression or creation of the final product of what they are doing.

And I think that in the preindustrial age Adam Smith was right; you could get more value out of increased efficiency than you can get from the alienation of work. But we are not in that age, we are now in some kind of knowledge economy for lots of things that we care about. And I think that in the knowledge economy things actually have reversed.

If you say, "Let's take a task, programming, creating a computer, whatever it is. . .

and break it into lots of little tasks to make everything much more efficient. " Maybe we'd get more efficiency in the Adam Smith kind of world but would we get the same kind of improving, caring, motivation and meaning? And perhaps what we are doing is just doing the wrong approach and we take big tasks and try to divide them into lots of things, we are actually hurting ourselves.

So, I think that now things are actually reversed. And just as a final comment, I think we can do lots of things to get people to motivate. I think we can do things to get people to motivate and to do much more but at least, I think, we should try to not replicate the Lego experiment in day to day life.

At least, we should try to not decrease people's motivation which is something I feel we are doing way too often. Thank you very much!