Question: What sparked your interest in economics?
Dan Ariely: So the starting of . . . For me the starting of this journey on irrational behavior started from actually being in the hospital. So quite a few years ago I got injured in an explosion. I got burned in about 70 percent of my body. And as a consequence I spent about three years in hospital. The first few months in the burn department were particularly painful, and one of the particularly difficult things is what is called the “bath treatment”. So everybody had the bandages on, and they took it off, and it’s always a little bit painful. Imagine there was no skin whatsoever; and it’s not a small bandage, but it’s covering 70 percent of your body. That’s a long process and incredibly painful. So during the procedure the nurses would put me on a stretcher and would lower me into a bath full of iodine water that would sting to start with. And then they would go ahead and rip the bandages off one by one for about an hour. And during that process, I would have debates over weeks about what is the best way to do it. Here I was experiencing this incredible pain, and what I wanted to do was to minimize it. So I would have arguments with them about what was the right way to trade off the intensity at each moment and the duration. So think about it. Should you have a shorter experience with a high momentary intensity? Or should you have a lower momentary intensity – tearing the bandages slower, but having longer duration? Should you start form the least painful and move to the most painful or do the opposite? Does it matter? Should you give people breaks or not breaks? And I had my own intuitions about what’s the best way to give me the least pain. And the nurses had a different intuition. But given the fact that I was the patient and they were the nurses, they were deciding what to do. And when I got out of the hospital and I learned a little bit about the experimental method, I decided to test what’s the right way. So I created lab experiments in which I would bring people in, and I would hurt them for longer durations, and lower intensities, and higher intensities; decreasing, increasing; with breaks, without breaks. And after each experience I would ask people how painful was this? So which one of these two pains would you prefer to repeat again? And so I would try to infer how people actually aggregate this pain. If you had an experience that lasts over time and change the intensity, at the end of it how do you think about the whole experience? And to my surprise the nurses were wrong. What does it mean? That their intuition . . . That having the treatment being relatively short – let’s say an hour – and tearing bandages one after the other was the right approach. They thought that high spikes and high intensity until duration was the way to go. It turns out that it was wrong. It’s much better to have lower intensity and longer duration; not to have spikes. It also turns out it would be better to start from the most painful part and go down (07:01) over time. And it would have been good to have breaks. And when I came back to present this to them, it struck me that these were really kind, wonderful people. They gave their life to their patients. I mean this is not something that you would . . . Unless you felt like it was your mission, this is not a job that you would choose. And at the same time they were wrong. And even though they had vast experience and the best intentions in the world, they were still very wrong. And I started wondering about what other cases are there where people have experience and good intentions, but are still fundamentally wrong? And that kind of opened my eyes to look at many things in which people are good, well meaning, but still fundamentally wrong.
Recorded on: Feb 19 2008