Think Like a Freak

by Steven D. Levitt

is easier to fall in line with what your family and friends think than to find new family and friends! But running with the herd means we are quick to embrace the status quo, slow to change our minds, and happy to delegate our thinking.

wines

who made up answers about Mary’s trip to the

you might never have come up with that one unless you were willing to blurt out, childlike, everything that wandered through your brain. So when it comes to solving problems, channeling your inner child can really pay off. It all starts with thinking small.

If you meet someone who fancies himself a thought leader or an intellectual, one of the nicest compliments you can pay is to call him a “big thinker.” Go ahead, try it, and watch him swell with pride. If he does, we can virtually

guarantee you he has no interest in thinkin...

As Albert Einstein liked to say, everything should be made as simple as possible, but not simpler.

It is easy to get seduced by complexity; but there is virtue in simplicity too.

the people involved seem to be having a good time as they learn. Freaks like to have fun.

They don’t say they want to go to the opera when they’d rather play video games. They don’t pretend they’re enjoying a meeting when they really want to get up and run around. Kids are in love with their own audacity, mesmerized by the world around them, and unstoppable in their pursuit of fun.

But best as we can tell, there is no correlation between appearing to be serious and actually being good at what you do.

Why is it so important to have fun? Because if you love your work (or your activism or your family time), then you’ll want to do more of it. You’ll think about it before you go to sleep and as soon as you wake up; your mind is always in gear. When you’re that engaged, you’ll run circles around other people even if they are more naturally talented.

Unfortunately, the lottery is a dreadful investment. It typically pays out only 60 percent of the take, far less than any casino or racetrack would dare offer. So for every 100 lottery dollars you “invest,” you can expect to lose 40. But what if the fun part of playing the lottery could somehow be harnessed to help people save money? That is the idea behind a prize-linked savings (PLS) account. Here’s how it works. Rather than spend $100 on lottery tickets, you deposit $100 in a bank account. Let’s say the going interest rate is 1 percent. In a PLS account, you agree to surrender a small chunk of that interest, perhaps .25 percent, which then gets pooled with all the other small chunks from fellow PLS depositors. What happens to that pool of money? It is periodically paid out in a lump sum to some randomly chosen winner—just like the lottery! A PLS account won’t deliver multimillion-dollar jackpots, since the payout pool is drawn from interest rather than principal. But here’s the real benefit: even if you never win the PLS lottery, your original deposit (and the interest) remain in your bank account. That’s why some people call it a “no-lose lottery.” PLS programs have helped people all over the world save money while at the same time not blowing their hard-earned salary on the lottery. In Michigan, a group of credit unions recently put together a PLS pilot program called “Save to Win.” Its first big winner was an eighty-six-year-old woman named Billie June Smith. With a ...

So if you are the person designing an incentive scheme, you can use this knowledge to herd people into doing the right thing—even if they’re doing it for the wrong reasons. With any problem, it’s important to figure out which incentives will actually work, not just what your moral compass tells you should work. The key is to think less about the ideal behavior of imaginary people and more about the actual behavior of real people. Those real people are much more unpredictable. Consider another Robert Cialdini experiment, this one at Petrified Forest National Park in Arizona. The park had a problem, as it made clear on a warning sign: YOUR HERITAGE IS BEING VANDALIZED EVERY DAY BY THEFT LOSSES OF PETRIFIED WOOD OF 14 TONS A YEAR, MOSTLY A SMALL PIECE AT A TIME. The sign plainly appealed to the visitors’ sense of moral outrage. Cialdini wanted to know if this appeal was effective. So he and some colleagues ran an experiment. They seeded various trails throughout the forest with loose pieces of petrified wood, ready for the stealing. On some trails, they posted a sign warning not to steal; other trails got no sign. The result? The trails with the warning

Resources are not infinite: you cannot solve tomorrow’s problem if you aren’t willing to abandon today’s dud.

The key is failing fast and failing cheap.