Part 5 of the TED Radio Hour episode Prevention.
About Daniel Goldstein's TED Talk
We've all felt regret over poor decisions. Behavioral Economist Daniel Goldstein wants to change that. He builds tools that help us imagine our futures, so we can make better decisions in the present.
About Daniel Goldstein
Daniel Goldstein studies decision-making — how we can give ourselves the right incentives, reminders, and rules of thumb to make smarter long-term choices.
In 2015, he served as President of the Society for Judgment and Decision Making, the largest academic society in Behavioral Economics.
GUY RAZ, HOST:
On the show today, ideas about prevention, the things we can do today to prepare for tomorrow. So the poem "The Odyssey" tells the legend of the Greek hero Odysseus and his journey home after the Trojan War. And if you've read it, you probably remember the part where Odysseus has to get past the sirens.
DANIEL GOLDSTEIN: The sirens, of course, being beautiful women who sit on this rock and sing a song so enchanting that everyone who's ever listened to it has steered closer and closer into the rocks, eventually crashing into the rocks only to die. And Odysseus decides he wants to be the first person to hear the song and live. So he comes up with a plan.
RAZ: This is Dan Goldstein. He's a behavioral economist. And he uses the story of Odysseus to talk about prevention.
GOLDSTEIN: He realizes that once he hears the siren song, he's going to try to steer the ship into the rocks. And he's going to die. And because he can anticipate that he's going to regret it, he decides to bind himself so that when temptation comes, he won't be able to do something regrettable. And so he ties himself to the mast, and his crew has wax in their ears so they can't hear the siren song.
And he gets to actually experience what it's like to be tempted but not be able to do anything about it.
GOLDSTEIN: And the plan works. He lives. So that's a commitment device, it's sometimes called.
RAZ: What is a commitment device?
GOLDSTEIN: It's just that. It's a thing that you put in place to bind yourself against doing something you anticipate that you will regret. So there are many commitment devices in real life. I love collecting them, picking them up from my friends, watching people use them in daily life.
RAZ: Dan spoke about these commitment devices on the TED stage.
(SOUNDBITE OF TED TALK)
GOLDSTEIN: I'm a big fan of commitment devices, actually. Tying yourself to the mast is the oldest one. But there are other ones such as locking a credit card away with a key or not bringing junk food into the house so you won't eat it or unplugging your internet connection so you can't use your computer. I was creating commitment devices of my own long before I knew what they were.
So when I was a starving post-doc at Columbia University, I was deep in a publish or perish phase of my career. I had to write five pages a day towards papers or I would have to give up $5. And when you try to execute these commitment devices, you realize the devil's really in the details because it's not that easy to get rid of $5.
I mean, you can't burn it. That's illegal. And I thought, well, I could give it to a charity or give it to my wife or something like that. But then I thought, I'm sending myself mixed messages because not writing is bad but giving to charity is good. So then I would kind of justify not writing by giving a gift. And then I kind of flipped that around and thought, well, I could give it to the Neo-Nazi's, right?
But then I was like, oh, that's more bad than writing is good. And so that wouldn't work. So ultimately, I just decided I would leave it in an envelope on the subway. Sometimes a good person would find it, sometimes a bad person would find it. On average, it was just a completely pointless exchange of money that I would regret.
So why do we need commitment devices? Well, resisting temptation is hard. It's an unequal battle between the present self and the future self. I mean, let's face it, the present self is present. It's in control. It's in power right now. It has these strong heroic arms that can lift donuts into your mouth, right? And the future self is not even around. It's off in the future. It's weak.
It doesn't even have a lawyer present. There's nobody to stick up for the future self. And so the present self can trounce all over its dreams.
RAZ: All right, so let's talk about our present selves and our future selves because we know that we're all going to get older, right? And that means a variety of things. But very few of us have the capacity to really imagine what that's going to mean.
GOLDSTEIN: Yes. It's very easy to ignore the future. It's very easy to think maybe as far in the future as your next meal. It's hard to think about the long run of your life, how you want that to go, 30 years from now, 20 years from now.
GOLDSTEIN: The English philosopher Derek Parfit said, we ignore the future in part because of a failure of imagination or belief. And what I think he meant was we're unwilling to think about the future self because we can't imagine or believe how it might turn out or that our actions today could affect what things are going to be like. And I can understand this.
It's difficult to imagine the future. There's a million ways your life could turn out - right? - or more. How can you entertain all of those multitudes of possible futures?
RAZ: So basically, we have to imagine our future selves in order to prevent our current selves from hurting us in the future.
GOLDSTEIN: Yeah. We can figure out a way to change the environment so that doing those things becomes easy. We can make bets, use commitment devices that encourage us to do the right thing, right? So I could bet somebody $5,000 that I won't gain 10 pounds in the next five years and that will be an incentive for me to keep my weight where it is.
And lastly, we can try to have a deep-seated change of heart. We can try to think for a moment about the future. I think that if I take this action, I'm going to end up in this state. If I take the other action, I'll end up in the other state. And that makes the decision a whole lot easier.
(SOUNDBITE OF TED TALK)
GOLDSTEIN: Despite, you know, my like for them, there's two nagging concerns that I've always had about commitment devices. And you might feel this if you use them yourself. So the first is when you've got one of these devices going, it's just a constant reminder that you have no self-control. And the other problem with commitment devices is that you can always weasel your way out of them.
So I've been working for about a decade now on finding other ways to change people's relationship to the future self without using commitment devices. In particular, I'm interested in the relationship to the future financial self. Now, saving is a classic two-selves problem, right? The present self does not want to save it all. It wants to consume, whereas the future self wants the present self to save.
We look at the savings rate, and it has been declining since the 1950s. And we're at a situation now where for every three baby boomers, two will not be able to meet their pre-retirement needs while they're in retirement. What can we do about this? So my co-authors and I have used computers to assist people's imagination and help them imagine what it might be like to go into the future.
So what we do is we take pictures of people, in this case, college-aged people and we use software to age them and show these people what they'll look like when they're 60, 70, 80 years old. And we try to test whether actually assisting your imagination by looking at the face of your future self can change your investment behavior.
RAZ: So what'd you find?
GOLDSTEIN: So when looking at a picture of yourself in the future, people say that they're going to save 50 percent more for retirement than what they would if they were looking at a picture of themselves in the present.
GOLDSTEIN: Yeah. And so if you can get to people just for a moment by simulating the future, you can get them to make a binding decision such as to start an automatic savings program. And then that will prevent them from ending up in retirement with not enough money.
RAZ: So if we can help people visualize their future selves, that could prevent people from making decisions now that could have catastrophic or bad outcomes in the future?
GOLDSTEIN: Yes, we can now simulate a world in which you can look in every direction and visualize a bunch of different scenarios of how the future might look. So with saving, imagine putting on goggles and seeing yourself 30 years in the future retiring on 10 percent of your pre-retirement income or 50 percent of your pre-retirement income or 100 percent of your pre-retirement income.
You could look at your house, look at your clothes, look at where you go on vacation. By doing that, I think you'll be able to connect the saving in the present to a certain future that might be very difficult to imagine otherwise. In the present, you think, oh, I'm fine. I can resist whatever comes along. But no matter who you are, eventually you're going to find yourself within earshot of the siren song.
And it's going to be very difficult to resist temptation. But one nice thing about having a brain is that you can use it to predict that you will find yourself in situations in which you will lose self-control. And because you can predict that, you can prevent those situations from arising or at least prevent yourself from doing something regrettable.
RAZ: Dan Goldstein. He's a computer scientist and experimental psychologist at Microsoft Research. You can see his entire talk at ted.com
(SOUNDBITE OF SONG "SEE THE FUTURE")
PINDYS: (Singing) I saw my old friends. And I saw my future. See the future. See the future. See the...
RAZ: Hey, thanks for listening to our show this week on prevention. If you want to find out more about who was on it, go to ted.npr.org. To see hundreds more TED Talks, check out ted.com or the TED app.
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