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	<title>Sparksheet &#187; behavioral economics</title>
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	<itunes:summary>A monthly media and marketing podcast from Sparksheet, the award-winning multiplatform magazine.</itunes:summary>
	<itunes:author>Sparksheet </itunes:author>
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		<title>Sparksheet &#187; behavioral economics</title>
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		<title>Harnessing the Power of Habit: Q&amp;A with Charles Duhigg</title>
		<link>http://sparksheet.com/harnessing-the-power-of-habit-qa-with-charles-duhigg/</link>
		<comments>http://sparksheet.com/harnessing-the-power-of-habit-qa-with-charles-duhigg/#comments</comments>
		<pubDate>Tue, 26 Jun 2012 17:34:50 +0000</pubDate>
		<dc:creator>Dan Levy</dc:creator>
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		<guid isPermaLink="false">http://sparksheet.com/?p=13623</guid>
		<description><![CDATA[In his bestselling book "The Power of Habit," New York Times business reporter Charles Duhigg explains how understanding our habits – and how to change them – is the key to success in business and everyday life. We spoke to the author.]]></description>
				<content:encoded><![CDATA[<p><strong><img class="alignright size-full wp-image-13625" title="charles-duhigg" src="http://sparksheet.com/wp-content/uploads/2012/06/charles-duhigg.jpg" alt="" width="300" height="300" />In the book you talk about how forming habits can help us save energy and brainpower. Does that mean habits make us more efficient? </strong></p>
<p>Absolutely. It’s a way for our brain to seek out an opportunity to achieve the same behaviour with less energy expenditure and less thought assigned to it. That’s why habits exist.</p>
<p>Efficiency is very important when it comes to neurological activity because the more efficient the brain is at certain activities, the more mental space you have to, for instance, dream up new things or think about something else.<strong></strong></p>
<p><strong>But can’t habits – even good ones – sometimes lead to a lack of flexibility and adaptability within organizations?</strong></p>
<p>Efficiency and adaptability are always in conflict with each other. When something becomes more efficient, by its very nature it tends to be much less flexible.</p>
<p>As habits develop, particularly in corporations, people stop paying conscious thought to the activity they’re performing. They lose some of that flexibility, which is why predictable accidents happen.</p>
<p><strong>You suggest that it’s important for organizations to form “keystone habits,” which can percolate into everything they do. For instance, as CEO of Alcoa, <a href="http://www.businessweek.com/2001/01_06/b3718006.htm" target="_blank">Paul O’Neill focused on worker safety</a>. But how do you get employees to buy in?</strong></p>
<p>The trick is to find the keystone habit that employees can intuitively see some sort of correspondence with.</p>
<p>For Paul O’Neill at Alcoa it was safety. There was a huge amount of concern around people showing up for work and getting injured. Nobody feels comfortable going to work and believing they are going to get hurt.</p>
<p>So if somebody comes in and says, “look, I’m going to make sure that nobody gets hurt today,” that’s something that people can buy into.</p>
<p>If, on the other hand, Paul O’Neill had said, “look, you’re going to show up every day and the keystone habit is making as much money as humanly possible, but your wages will stay exactly the same,” obviously no one is going to buy into that.</p>
<p>At Alcoa, the line workers couldn’t participate in the benefits of greater efficiency – there’s no inherent reward in that for them – so they focused on the things that actually impacted their lives, which in this particular case was safety.</p>
<p><strong>You write that the golden rule of habit change is belief and you explain how Starbucks creates a belief system by teaching its employees virtues like self-discipline. Do we really want to put our faith in brands?</strong></p>
<p>Allowing companies to create habits and take advantage of their training doesn’t mean you’re handing over your ability to think.</p>
<p>A lot of people need these highly structured environments that give them an opportunity to learn, and it’s very beneficial for them to go work for companies like Starbucks.</p>
<p>That said, ultimately what Starbucks is teaching is the ability to marshal your own willpower, critical thinking and the ability to set goals and plans.</p>
<p>Hopefully people walk away from that experience with a better understanding of how success occurs, which means they have the tools to take greater responsibility for their own lives.</p>
<p><strong><a href="http://www.amazon.com/The-Power-Habit-What-Business/dp/1400069289"><img class="alignright size-full wp-image-13627" title="power-of-habit" src="http://sparksheet.com/wp-content/uploads/2012/06/power-of-habit.jpg" alt="" width="300" height="456" /></a>One of the most fascinating and frightening <a href="http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=all" target="_blank">chapters of your book</a> details how retail brands like Target track our habits with such precision that they can tell whether someone is pregnant before she’s even told her family. How do brands take advantage of all the data out there without crossing into creepy territory?</strong></p>
<p>There’s a trade-off happening within society. Most of the advances that create convenience in a buying experience also create data.</p>
<p>The reason why that convenience is created – despite being expensive for companies – is so that they can get the data. People need to make a choice about what type of trade-off they’re comfortable with.</p>
<p>People are totally comfortable with this trade-off in the online realm. Nobody ever really feels like Amazon is creepy for suggesting books to customers. It’s when it gets offline that people seem to have some issues about it.</p>
<p>But I think that <a href="http://sparksheet.com/jeff-jarvis-public-parts/">conception of privacy is changing</a>, and as people become more comfortable and familiar with the precise formula of this trade-off, people will be able to make more informed choices.</p>
<p>That’s what stops it from being creepy. It’s just: Where do you fall on that line?</p>
<p><strong>The book’s thesis involves what you call “the habit loop,” which consists of a cue, a routine and a reward. You also suggest that marketers need to create a “craving” for their product in order to tap into that loop. You use toothpaste as an example. Is this true for content as well? </strong></p>
<p>For a lot of people, coming to an online magazine is not a habit. They’re coming because they’re making a conscious decision to do so. But there is some online behaviour that is habitual: people clicking through their favourite websites, for example.</p>
<p>They go to the same sites over and over again because they are looking for some sort of distraction and they become habituated to seeking distraction in this one particular form. It happens all the time.</p>
<p><strong>And clearly lots of websites out there do a good job of exploiting that craving!</strong></p>
<p>Definitely. For example, sites like <a href="http://www.huffingtonpost.ca/" target="_blank">Huffington Post</a> and <a href="http://icanhascheezburger.com/" target="_blank">I Can Haz Cheezburger?</a>, or <a href="http://gawker.com/" target="_blank">Gawker</a> for that matter. A lot of them present content in these very quick paragraphs, which you can click through very easily.</p>
<p>The reason for that is because the sites want it to become habit forming to click to the next page – you get this burst of entertainment and then move immediately to something new.</p>
<p><iframe src="http://www.youtube.com/embed/4H0fTwtPLfo" frameborder="0" width="640" height="360"></iframe></p>
]]></content:encoded>
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		<title>Demystifying Creativity: Q&amp;A with Jonah Lehrer</title>
		<link>http://sparksheet.com/demystifying-creativity-qa-with-jonah-lehrer/</link>
		<comments>http://sparksheet.com/demystifying-creativity-qa-with-jonah-lehrer/#comments</comments>
		<pubDate>Thu, 12 Apr 2012 14:19:03 +0000</pubDate>
		<dc:creator>Dan Levy</dc:creator>
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		<category><![CDATA[bob dylan]]></category>
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		<category><![CDATA[Imagine]]></category>
		<category><![CDATA[Jonah Lehrer]]></category>
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		<guid isPermaLink="false">http://sparksheet.com/?p=12511</guid>
		<description><![CDATA[We all get epiphanies, but why? In his latest book, <em>Imagine: How Creativity Works</em></a>, Wired editor Jonah Lehrer separates the science from the magic. We spoke with him about his findings.]]></description>
				<content:encoded><![CDATA[<p><strong><img class="alignright size-full wp-image-12530" title="jonah-lehrer-full" alt="" src="http://sparksheet.com/wp-content/uploads/2012/04/jonah-lehrer-full.jpg" width="300" height="313" /></strong></p>
<p>&nbsp;</p>
<p><em>Editor&#8217;s note: </em>Imagine<em> was withdrawn from the market after it came to light that Lehrer fabricated some of the quotations in the book. Lehrer resigned from his staff position at The New Yorker and has not been published since. </em></p>
<p>&nbsp;</p>
<p><strong>Is there a difference between creating for the sake of commerce (like 3M) and creating for creativity’s sake (like Bob Dylan), or is it fundamentally the same process?</strong></p>
<p>It’s fundamentally the same process, especially from the perspective of the brain. I think that’s why the brain is an interesting avenue with which to pursue some of these questions.</p>
<p>The brain is a category buster and the brain doesn’t respect differences between when I’m working on an assignment or when I’m working in my spare time.</p>
<p>Simply put, creativity is the invention of something new that’s useful. Obviously we could spend the rest of our lives debating the details of what exactly new and useful mean, but I think we know what creativity is when we see it.</p>
<p><strong><a href="http://www.amazon.com/Imagine-Creativity-Works-Jonah-Lehrer/dp/0547386079">Your book</a> talks about the importance of form in creativity but you present conflicting views. First you say that “You break out of the box by stepping into shackles,” but then you quote <a href="http://en.wikipedia.org/wiki/Milton_Glaser" target="_blank">Milton Glaser</a>: “To have a style is to be trapped.” Should we see constraints (even budgetary ones) as good for creativity? </strong></p>
<p>We need the right kind of constraints. Look, for example, at the history of poetry. There’s a reason why poets always stump themselves with poetic forms. Those very intricate forms force us to come up with truly original lines. They force us to dig below the obvious clichés and associations.</p>
<p>So sometimes constraints can be essential in a very real way, because creativity is not our first mode of thinking. We really have to be forced into it. In that way, constraints can really unleash our creativity.</p>
<p>Of course, the wrong kind of constraint is just a trap. That’s what Milton Glaser is talking about. You develop routines, or just develop this standard approach that is rooted in efficiency. It makes your life a little bit easier but it also reduces the realm of possibilities that you consider.</p>
<p>This is the leading theory for why creativity drops off as we get older. People develop styles of thinking. They develop habits, routines, and all those routines get in the way.</p>
<p>That’s why those who stay creative throughout their entire career or life constantly risk reinvention. They always experiment with new products and new problems. They’re always trying to find new ways of attacking the problem. In a sense they’re always looking for a new set of constraints, and that’s the healthiest way.</p>
<div id="attachment_12539" class="wp-caption aligncenter" style="width: 610px"><a href="http://www.miltonglaser.com/milton/c:history/#11"><img class="size-full wp-image-12539" title="milton-glaser" alt="" src="http://sparksheet.com/wp-content/uploads/2012/04/milton-glaser.jpg" width="600" height="330" /></a><p class="wp-caption-text">Milton Glaser (right) at work with Walter Bernard at WBMG in the 1980s. Image via miltonglaser.com</p></div>
<p><strong>You talk about the importance of focus in the creative process, but you’re also cheerleader for daydreaming. How should we find the right balance between focus and distraction? </strong></p>
<p>I think the first step is to recognize that creativity isn’t a single way of thinking, that the creative process goes through these phases where sometimes you will have epiphanies, but afterwards you’ll have to work it out. You’ll need to go through draft after draft, edit after edit, iteration after iteration.</p>
<p>You really have to diagnose the problem that you’re working on and try to figure out whether what you need is a moment of insight. Do I need an epiphany? Do I need to take lots of hot showers, or do I have a feeling of knowing? Do you have a sense of making progress, in which case you should just keep putting in the work and drink another triple espresso.</p>
<p><strong>Do you think it’s possible to replicate the “serendipity” of face-to-face interactions (which you credit for the creativity of brands like <a href="http://video.nytimes.com/video/2011/02/09/movies/1248069625002/a-rare-look-inside-pixar-studios.html" target="_blank">Pixar</a> and industries like Broadway) on digital platforms? Is that where social media come in? </strong></p>
<p>When you go back 15 years, there was this sense that the online world would somehow replace the analogue interactions of real life. That hasn’t happened at all. We need these real world connections, meetings in the flesh, more than ever.</p>
<p>In terms of imagining online exchanges that will foster the serendipity of real life, it’s tough to say. At its best, Twitter makes it possible, but what you often get with Twitter is people obeying the self-similarity principle. They seek out people who are just like them, so you end up with a set of people you’re following who share your interests, your sensibilities, your attitudes, your political leanings.</p>
<p>We certainly do the same thing in the real world. We seek out people who are just like us. But when it comes to maximizing creativity, you really want that friction. You really want that tension in the room. You want some fresh and strange and weird voices too because they’re the ones that are going to unleash your creativity.</p>
<div id="attachment_12553" class="wp-caption aligncenter" style="width: 710px"><a href="http://www.flickr.com/photos/joebehr/4979401125/in/photostream/"><img class="size-full wp-image-12553" title="pixar-atrium-birdseye" alt="" src="http://sparksheet.com/wp-content/uploads/2012/04/pixar-atrium-birdseye.jpg" width="700" height="516" /></a><p class="wp-caption-text">Pixar&#8217;s Headquarters were designed to encourage employee interaction. Image by Joe Wolf via Flickr.</p></div>
<p><strong>Do you think IP laws have hindered creativity? You write about the importance of “recombination,” of building on old ideas (Shakespeare is the prime example in the book). Is the web’s culture of curation, linking and mashups bringing that culture back? </strong></p>
<p>It’s a very difficult line to draw. People have been trying to figure out how to draw this line ever since intellectual property was invented back in Elizabethan England. In Lincoln’s phrase, the purpose of intellectual property is to add fuel to the fire of genius.</p>
<p>It is an important motivational force, but at the same time, one also has to recognize that there’s a tension there because, as <a href="http://www.wired.com/wired/archive/4.02/jobs_pr.html" target="_blank">Steve Jobs put it</a>, creativity is just connecting things. It’s finding new connections between old ideas.</p>
<p>You have to give people access to those old ideas, you have to allow the future Shakespeares of the world to rip off plots and to steal lines. Dylan described his process as one of love and theft: First you fall in love with an idea and then you steal it. Then you make it your own.</p>
<p>We have to make it possible for people to steal the right way.  It’s not about theft so that you can watch it on your laptop. I’m talking about theft so that you can reinvent it. I think too often copyright laws make it too hard to recombine, too hard to mash together old ideas in new ways.</p>
<div id="attachment_12546" class="wp-caption aligncenter" style="width: 682px"><a href="http://www.flickr.com/photos/brizzlebornandbred/6158417511/in/photostream/"><img class="size-full wp-image-12546" title="bob-dylan" alt="" src="http://sparksheet.com/wp-content/uploads/2012/04/bob-dylan.jpg" width="672" height="525" /></a><p class="wp-caption-text">Bob Dylan in 1966. Photo by Barry Feinstein via Flickr</p></div>
<p><strong>Where does the editing or refining process come into play? Is that still part of the creative process? </strong></p>
<p>It is. When you talk to creative people they begin by telling these romantic stories about how they had a big epiphany in the shower, but if you keep pressing them they’ll confess that even after that big epiphany they still had to go through endless drafts.</p>
<p>Look at Beethoven, the definition of an artistic genius. The guy was going through 70 drafts of a single musical phrase until he found the perfect one. Editing is an essential part of the creative process.</p>
<p>This kind of work doesn’t seem as romantic or grand as the light bulb going off when we least expect it, but it is just as important. There’s nothing glamorous about it, it’s quite dismal in fact and may even make us a little depressed, but it’s how we make our ideas perfect.</p>
<p>The larger point is that creativity is damned hard. If it were easy, if it were just about finding ways to relax and going on vacations, Pablo Picasso wouldn’t be so famous.</p>
<p><strong><a href="http://www.amazon.com/Imagine-Creativity-Works-Jonah-Lehrer/dp/0547386079/ref=sr_1_1?ie=UTF8&amp;qid=1334160228&amp;sr=8-1"><img class="alignright size-full wp-image-12533" title="Imagine-hardcover" alt="" src="http://sparksheet.com/wp-content/uploads/2012/04/Imagine-hardcover.jpg" width="300" height="454" /></a>What about your own creative process? Do you browse the academic literature to find a narrative, or do you start with an idea and build from there? </strong></p>
<p>I start with the mystery. I start with something I want to know more about. In this case it was the mystery of the moment of insight. Figuring out where these ideas come from when they arrive out of the blue just struck me as totally befuddling. I wanted to learn about it. That’s where I began.</p>
<p>Then, of course, I go to the peer review literature and the science. The hardest part is finding the stories that bring the science to life, that will let you make the connections between the abstract experiments in the lab and the creativity in the room.</p>
<p><em>Jonah Lehrer will be speaking at<a href="http://c2mtl.com/"> C2-MTL</a>, a global conference that explores the relationship between commerce and creativity. As a media partner, Sparksheet will bring you exclusive content before, during and after the event, which takes place May 22 to 25 in Montreal. </em></p>
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		<slash:comments>46</slash:comments>
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		<title>The Business of Irrationality: Q&amp;A with Dan Ariely</title>
		<link>http://sparksheet.com/the-business-of-irrationality-qa-with-dan-ariely/</link>
		<comments>http://sparksheet.com/the-business-of-irrationality-qa-with-dan-ariely/#comments</comments>
		<pubDate>Mon, 31 Jan 2011 14:29:52 +0000</pubDate>
		<dc:creator>Dan Levy</dc:creator>
				<category><![CDATA[Q&A]]></category>
		<category><![CDATA[behavioral economics]]></category>
		<category><![CDATA[books]]></category>
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		<category><![CDATA[dan ariely]]></category>
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		<category><![CDATA[humanizing business]]></category>
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		<guid isPermaLink="false">http://sparksheet.com/?p=5396</guid>
		<description><![CDATA[In his latest bestselling book, <em>The Upside of Irrationality</em>, behavioural economist <a href="http://danariely.com/">Dan Ariely</a> explores how defying logic can actually be good for business. We spoke to him about the ups and downs of technology and how social science can help humans design a better world.]]></description>
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<div id="attachment_5410" class="wp-caption alignright" style="width: 310px"><a href="http://www.flickr.com/photos/poptech/5102436162/"><strong><strong><img class="size-full wp-image-5410  " title="Dan Ariely" src="http://sparksheet.com/wp-content/uploads/2011/01/ariely2.jpg" alt="" width="300" height="300" /></strong></strong></a><p class="wp-caption-text">Dan Ariely by poptech via flickr</p></div>
<p><strong>You talk a lot in the book about the need to design better products and systems that take into account human limitations. Are you generally positive about the role of technology and branded products in making us behave more rationally?</strong></p>
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<p>Am I generally optimistic? Not really about <a href="http://sparksheet.com/open-book-branding-truth-transparency-and-trust-in-marketing/">brands</a>. The commercial world is creating many incentives for companies to get us to behave badly. It’s very hard to think about the company who would want us to save for retirement or to consume in 30 years.</p>
<p>Companies inherently want us to spend money now. I think what technology is actually quite good at is creating the infrastructure for a large number of people to try and fight these incentives. So from that perspective, I’m optimistic.</p>
<p><strong>What products have you seen lately that you’ve been impressed by and what are you still waiting for someone to design?</strong></p>
<p>There are many products that I am waiting for people to design. I am a big fan of the phone because it can connect our good intentions to the way we actually work in the world. We can all sit at home and have lots of good intentions. The question is, do we execute them? And the answer we have to admit most often is no.</p>
<p>The phone is a very interesting thing in that it’s with you both when you make the plans and when you execute them. If we can get our phones to be more aware of what we are doing, of our initial plans, and of the mishmash between them, I think there could be some wonderful opportunities.</p>
<p><strong>What about what you call the <a href="http://hbr.org/web/2009/hbr-list/ikea-effect-when-labor-leads-to-love">“IKEA effect,”</a> the idea that people find deeper enjoyment and value in things that they had a hand in creating? By doing so much of the legwork for us, has technology made us less happy? (If not less smart, as Nicholas Carr contends).</strong></p>
<p>I think that’s an interesting question concerning <a href="http://sparksheet.com/freeing-the-customer-with-vrm-qa-with-doc-searls-%e2%80%93-part-i/">the optimal role of our involvement with technology</a>. If you’ve created something or have been a part of it, you will be more likely to listen to it.</p>
<p>It’s a continuum between convenience on the one hand and motivation to participate on the other. I think the issue with technology is determining the golden point of connection.</p>
<p>For example, it’s four o’clock and I have a problem with eating cookies. Now I’m at Starbucks and the phone reminds me of my pledge. Perhaps it shows me a photo of how I might look in 30 years if I keep on eating like this.</p>
<p>My personal problem involves time management. I think, again, it’s one of those things where we all like to be productive and efficient and then we get to the office and look at our e-mail and Facebook accounts. There is a great opportunity for fixing things in that direction as well.</p>
<p><strong>Do you think the Internet has made the <a href="http://www.whiteboardoflife.com/2010/12/12/lesson-34-not-invented-here-bias/">“Not-Invented-Here Bias”</a> (our tendency to be more attached to our own ideas and creations) less powerful? After all, aren’t we in the age of curation, open-source collaboration and Wikipedia?</strong></p>
<p>I think it’s a question of, <a href="http://sparksheet.com/you-be-the-brand-how-marketers-are-providing-co-creation-experiences-for-customers/">“What do we need to do to feel that something is ours?” </a>We were able to show in the book that people could simply unscramble a sentence and feel like they had written it themselves. Just the fact that you had to unscramble the words and reconnect them suddenly made you much more proud.</p>
<p>So the barrier to feel that something is ours is actually quite low. If you talk about Wikipedia, I think that the people who curate it actually think it is theirs; they don’t think they are curating it, but that they’re creating it.</p>
<p><strong>Another interesting concept for marketers in the book is the “Hedonic Treadmill” – the idea that people inevitably adapt to and fall out of love with things once they’re no longer new and shiny. Now, it’s easy to see how this is good for marketers and brands, but not so much for debt-ridden consumers. So here’s my question: Do you ever fear that your research and tips are going to be used for evil instead of good?</strong></p>
<p>Very much. If you understand something about how people work, you can use it for good and for bad. I think there is a risk of people really doing the wrong thing and making lots of money from it. If you look at the world as a zero-sum game, it’s a very depressing thing because it means that everything you make, other people lose.</p>
<p>But I think there are many opportunities to provide real value where everybody benefits. Let’s say you started a company that helped people to lose weight or to waste five percent less of their time at work. Now we can create real value.</p>
<p>The sad thing about behavioural economics is that you understand how inferior and fallible people are compared to what you want them to be. The good news is that it means that there are places for real improvement.</p>
<p><strong>You spend a lot of time touring the world speaking to business executives about how their bonuses might actually be making them less productive, or telling doctors that the methods they’ve been using for hundreds of years are wrong. What’s it like being the bearer of bad news?</strong></p>
<p>What I usually try is not to be the bearer of bad news, but the bearer of data. It’s not me telling you how things are but saying, “Look, this is what people believe in general.  Here is the data.”</p>
<p>What do we want to do given this data? How do we want to update or change our understanding? I think that by trying to remain objective and not idealistic, and by saying that it’s basically all about data, it becomes a little simpler.</p>
<p><strong>As someone who spends a lot of time touring the world, what frustrates you most about air travel? How can brands make the experience more rational?</strong></p>
<p>For me the biggest thing is uncertainty. I never know if the flight will take off, and when – or if – I will get to my destination.</p>
<p>If I know what to expect I can plan for it. Airlines are taking bigger precautions by making flight times longer so they arrive on time. This is a good trick because it helps us schedule more effectively.</p>
<p>And then, of course, there is the rudeness. If you’re in a situation where things are not going well, it would be very nice to deal with someone who is empathetic. But the whole experience of flying is a continuing struggle.</p>
<p><strong>How have you applied your research to your personal and professional life? In the same way that a fitness trainer might be expected to have six-pack abs, do people expect you to be Mr. Rationality?</strong></p>
<p>Not so much. Partly because I admit my irrationalities in the book. And it’s clear that they give me lots of sources for ideas. But people do approach me for help with difficult decisions they have in their lives. They expect me to have a different perspective.</p>
<p>I can’t turn off the behavioural economist in me. I have never tried to turn it off; I try to share it with people. We could be standing in line for something and asking questions about what is really going on and why we do certain things. I am continually fascinated by people.</p>
<p>Actually that’s one of the main benefits of social science – we can ask questions about our own lives and realize how little we know about the subject.</p>
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