Jerry Seinfeld’s commitment strategy for joke writing

As told to a software programmer:

(Seinfeld) said the way to be a better comic was to create better jokes and the way to create better jokes was to write every day. But his advice was better than that. He had a gem of a leverage technique he used on himself and you can use it to motivate yourself—even when you don’t feel like it.

He revealed a unique calendar system he uses to pressure himself to write. Here’s how it works.

He told me to get a big wall calendar that has a whole year on one page and hang it on a prominent wall. The next step was to get a big red magic marker.

He said for each day that I do my task of writing, I get to put a big red X over that day. “After a few days you’ll have a chain. Just keep at it and the chain will grow longer every day. You’ll like seeing that chain, especially when you get a few weeks under your belt. Your only job next is to not break the chain.”

“Don’t break the chain,” he said again for emphasis.

Shakeout says this story is an example of loss aversion in that “the benefit of writing another joke seems small, but as you build up the chain you give yourself something to lose.” Loss aversion doesn’t seem like the appropriate behavioral economic lesson to apply to Seinfeld’s story.

An alternative might be research on differences in decision making when facing isolated options versus sequences. The frame of a sequence typically enables individuals to make more farsighted decisions, which is exactly what happened in Seinfeld’s case. In much of this research – the best of it done by George Loewenstein – individuals typically postpone objectively “better” outcomes until the end of a sequence (like French food versus McDonalds). Though in the Seinfeld story, the sequence itself seems to differentiate the value of initially identical products (a self-produced joke).

Framing the Wall Street “bailout”

Polling on the Wall Street financial crisis has some hidden lessons about the effects of question wording and framing. Pollsters and news editors love to use the word “bailout” when they write headlines for their press releases and news stories.

“57% of Public Favors Wall Street Bailout,” according to the Pew Research Center on September 22.

“Only 28% Support Federal Bailout Plan,” according to Rasmussen Reports on September 22.

“Do You Support The Financial Bailout?” asks WKRG news, for a September 26 story based on a SurveyUSA poll.

Now, pollsters don’t love the connotation-laden term when they ask voters for their opinions about what’s going on in Congress, since it dramatically alters the question’s frame.

“As you may know, the government is potentially investing billions to try and keep financial institutions and markets secure. Do you think this is the right thing or the wrong thing for the government to be doing?” asked Pew, and a majority said it is the right thing.

“Do you favor or oppose the proposal for the federal government to purchase up to $700 billion in assets from finance companies?” asked Rasmussen, and 72 percent opposed of didn’t know enough to answer.

“Do you support or oppose the specific rescue plan that the government has worked out? Or do you not yet know enough yet to say?” asked Survey USA, and 84 percent of people opposed or didn’t know enough to answer.

One person does use bailout for a poll question. Who? The unscientific pollster Bill O’Reilly who asks his viewers “Would you vote for the bailout package?” So far, 81 percent have said no.

Small word changes = big behavioral changes

Two goodies from Yes! 50 Scientifically Proven Ways to Be Persuasive by Noah Goldstein, Steve Martin, and Robert Cialdini.

First, try using “because” plus a reason, any reason, the next time you want something.

Behavioral scientist Ellen Langer and her colleagues decided to put the persuasive power of this word to the test. In one study, Langer arranged for a stranger to approach someone waiting in line to use a photocopier and simply ask, “Excuse me, I have five pages. May I use the Xerox machine?” Faced with the direct request to cut ahead in this line, 60 percent of the people were willing to agree to allow the stranger to go ahead of them. However, when the stranger made the request with a reason (“May I use the Xerox machine, because I’m in a rush?”), almost everyone (94 percent) complied…

Here’s where the study gets really interesting…This time, the stranger also used the word because but followed it with a completely meaningless reason. Specifically, the stranger said “May I use the Xerox machine, because I have to make copies?”

Second, if you’re running a telethon, change your standard “operators are standing by” line.

(Colleen) Szot changed the all-too-familiar call-to-action line, “Operators are waiting, please call now,” to, “If operators are busy, please call again.” On the face of it, the change appears foolhardy. After all, the message seems to convey that potential customers might have to waste their time dialing and redialing the toll-free number until they finally reach a sales representative. Yet, that surface view underestimates the power of the principle of social proof: When people are uncertain about a course of action, they tend to look outside themselves and to other people around them to guide their decisions and actions. In the Colleen Szot example, consider the kind of mental image likely to be generated when you hear “operators are waiting”: scores of bored phone representatives filing their nails, clipping their coupons, or twiddling their thumbs while they wait by their silent telephones — an image indicative of low demand and poor sales.

Now consider how your perception of the popularity of the product would change when you heard the phrase “if operators are busy, please call again.” Instead of those bored, inactive representatives, you’re probably imagining operators going from phone call to phone call without a break. In the case of the modified “if operators are busy, please call again” line, home viewers followed their perceptions of others’ actions, even though those others were completely anonymous. After all, “if the phone lines are busy, then other people like me who are also watching this infomercial are calling, too.”

Hat tip: Marginal Revolution and The Situationist

To NBC and the Wall Street Journal: Bring back a pair of great poll questions

In July, Hart/Newhouse, the polling firm behind the NBC News/Wall Street Journal poll, included a pair of questions about the riskiness/safety of John McCain and Barack Obama as president.

When asked who “would be the riskier choice for president – John McCain or Barack Obama,” the results were 35 percent for McCain and 55 percent for Obama. When asked who “would be the safer choice for president,” the results were 46 percent for McCain and 41 percent for Obama.

The numbers should be mirror opposites, but a clear framing effect skews them. The question never appeared before July, and was dropped in the August poll. To NBC and the Wall Street Journal: On behalf of behavioral economists, political psychologists, and generally curious American voters, throw us a bone and bring back the questions.

Addendum: @ Tristan. Check out this post if you haven’t already.

Behavioral economics patterns in social security?

From a speech last week by Congressional Budget Office Director Peter Orszag at the Retirement Research Consortium:

Distribution of the Age at Which Primary Beneficiaries Claim Social Security Benefits by Birth Year

Continue reading the post here.

A classic is back – cash discounts and credit surcharges

Last month USA Today said gas stations were bringing back the cash discount. Indeed they were. The Nudge blog shot this picture at a Shell station in northern Virginia today.

The regular price was $3.99 a gallon. USA Today makes no mention of why gas stations are advertising a cash discount instead of a credit card surcharge – an old retailing trick – but good behavioral economists know the answer. Humans view discounts differently from surcharges. The first is an opportunity cost; the second a cost outlay. In Toward a Positive Theory of Consumer Choice, Thaler wrote:

Until recently, credit card companies banned their affiliated stores from charging higher prices to credit card users. A bill to outlaw such agreements was presented to Congress. When it appeared likely that some kind of bill would pass, the credit card lobby turned its attention to form rather than substance. Specifically, it preferred that any difference between cash and credit card customers take the form of a cash discount rather than a credit card surcharge. This preference makes sense if consumers would view the cash discount as an opportunity cost of using the credit card but the surcharge as an out-of-pocket cost.

In Choices, Values, and Frames, Kahneman and Tversky argued that the distinction is one of framing. The discount is seen as a gain while the surcharge is seen as a loss. Since humans are loss averse, we are more likely to give up the discount (the gain) than accept the surcharge (the loss).

The fact that the cash discount is applied to gas provides an interesting wrinkle to the original credit card discussion which ignored the good itself. The sharp increase in the price of is especially painful to loss averse humans whose purchasing power at the pump has slipped considerably. Filling up anywhere, with cash or credit, feels like a raw deal. On a good like this, does the gap between those who forgo the discount and those who pass shrink? In other words, if a pair of a jeans and a gallon of gas both have the same cash discount on a percentage basis, would the number of people taking each be similar?

What’s my motivation?

External rewards and punishments are counterproductive when it comes to activities that are meaningful — tasks that telegraph something about a person’s intellectual abilities, generosity, courage or values. People will voluntarily perform intellectually arduous work, for example, because it gives them pleasure to solve a puzzle or win a game of wits.

You could read the rest of Shankar Vedantam’s column on internal and external motivation. And then consider Gary Becker’s provocative idea to charge $50,000 a person for the right to become an American citizen.

Yes, there is a lot of framing in this post.

Does rollover nudge people to buy cell phone plans with more minutes?

For the last few years, AT&T has offered customers the ability to rollover unused minutes from one month to the following month (for up to 12 months). The company has advertised the service as a way help customers avoid paying extra charges in those months when they go over their plan’s minute allowance. By framing rollover as an insurance against future overages, the option seems to have the possibility for nudging people to buying one plan above what they think they might need on a monthly basis. The rollover frame suggests that unused minutes aren’t actually “lost.” They are actually “saved” to be used for a rainy day in the future. We bet AT&T knows the answer to this question. We wish they would give their data to a behavioral economist for some analysis.

Why not let cell phone customers buy used minutes from each other?

Here’s another idea for AT&T, or for any other interested cell phone company: Create a market where customers can buy unused rollover minutes from each other. Overage charges are a giant revenue source for cell phone companies, but they could advertise the internal minute market as a way to grow their customer base. And, of course, companies could charge a percentage fee for each exchange a la Ebay. Companies might consider putting some limits on the amount of minutes that could be purchased or sold by their customers.

Making the payoff (look) worth the wait

If you are like most people, you are impatient. You’ll take a small reward now over a larger reward in the future. The near future. You’ll pick $5 today over $6.20 in 26 days. That’s a 25 percent return in a month! But most people take the $5 now because they focus on the $1.20 difference, which is much less than $5. Psychologists consider this an example of framing. In the language of Nudge, a choice architect’s choice of frame affects individuals’ final choices. In this month’s Psychological Science, Eran Magen, Carol Dweck, and James Gross have a short paper that puts a twist on the common finding of human impatience with a laboratory experiment. They frame the today-next month choice in way that increases the likelihood that someone will pick the delayed payoff.

They introduce an element of uncertainty in the decision making process. Some participants in their experiment faced the standard choice described above. Magen, Dweck, and Gross call this the “hidden zero” format. Others were given the option to receive “[A] $5.00 today and $0 in 26 days OR [B] $0 today and $6.20 in 26 days.” The amounts of money are the same in each of these situations. All that is different is the introduction of a 0 – what the authors call the “explicit zero” format – that reframes the gains and losses associated with waiting.

Despite the fact that the hidden-zero and explicit-zero formats of presentation were logically equivalent, the latter resulted in lower rates of impulsive choice, possibly because the explicit-zero format caused each choice to appear as a sequence, thereby encouraging people to select the improving sequence (i.e., the larger, later reward). The explicit-zero format may also draw attention to the opportunity cost of each choice, thereby encouraging people to choose the alternative that incurs a lower opportunity cost (i.e., to forgo the smaller, sooner reward)…

The way alternatives are represented matters: By simply mentioning the “obvious” downsides of alternatives, one can help decision makers choose in a more informed and balanced manner, thereby helping them place more weight on the achievement of their long-term goals, rather than on immediate gratification.

Hat tip: (We’re Only Human)