Kitabı oku: «The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home»

INTRODUCTION Lessons from Procrastination and Medical Side Effects

I don’t know about you, but I have never met anyone who never procrastinates. Delaying annoying tasks is a nearly universal problem—one that is incredibly hard to curb, no matter how hard we try to exert our willpower and self-control or how many times we resolve to reform.

Allow me to share a personal story about one way I learned to deal with my own tendency to procrastinate. Many years ago I experienced a devastating accident. A large magnesium flare exploded next to me and left 70 percent of my body covered with third-degree burns (an experience I wrote about in Predictably Irrational^*). As if to add insult to injury, I acquired hepatitis from an infected blood transfusion after three weeks in the hospital. Obviously, there is never a good time to get a virulent liver disease, but the timing of its onset was particularly unfortunate because I was already in such bad shape. The disease increased the risk of complications, delayed my treatment, and caused my body to reject many skin transplants. To make matters worse, the doctors didn’t know what type of liver disease I had. They knew I wasn’t suffering from hepatitis A or B, but they couldn’t identify the strain. After a while the illness subsided, but it still slowed my recovery by flaring up from time to time and wreaking havoc on my system.

Eight years later, when I was in graduate school, a flare-up hit me hard. I checked into the student health center, and after many blood tests the doctor gave me a diagnosis: it was hepatitis C, which had recently been isolated and identified. As lousy as I felt, I greeted this as good news. First, I finally knew what I had; second, a promising new experimental drug called interferon looked as if it might be an effective treatment for hepatitis C. The doctor asked whether I’d consider being part of an experimental study to test the efficacy of interferon. Given the threats of liver fibrosis and cirrhosis and the possibility of early death, it seemed that being part of the study was clearly the preferred path.

The initial protocol called for self-injections of interferon three times a week. The doctors told me that after each injection I would experience flulike symptoms including fever, nausea, headaches, and vomiting—warnings that I soon discovered to be perfectly accurate. But I was determined to kick the disease, so every Monday, Wednesday, and Friday evening over the next year and a half, I carried out the following ritual: Once I got home, I would take a needle from the medicine cabinet, open the refrigerator, load the syringe with the right dosage of interferon, plunge the needle deep into my thigh, and inject the medication. Then I would lie down in a big hammock—the only interesting piece of furniture in my loftlike student apartment—from which I had a perfect view of the television. I kept a bucket within reach to catch the vomit that would inevitably come and a blanket to fend off the shivering. About an hour later the nausea, shivering, and headache would set in, and at some point I would fall asleep. By noon the next day I would have more or less recovered and would return to my classwork and research.

Along with the other patients in the study, I wrestled not only with feeling sick much of the time, but also with the basic problem of procrastination and self-control. Every injection day was miserable. I had to face the prospect of giving myself a shot followed by a sixteen-hour bout of sickness in the hope that the treatment would cure me in the long run. I had to endure what psychologists call a “negative immediate effect” for the sake of a “positive long-term effect.” This is the type of problem we all experience when we fail to do short-term tasks that will be good for us down the road. Despite the prodding of conscience, we often would rather avoid doing something unpleasant now (exercising, working on an annoying project, cleaning out the garage) for the sake of a better future (being healthier, getting a job promotion, earning the gratitude of one’s spouse).

At the end of the eighteen-month trial, the doctors told me that the treatment was successful and that I was the only patient in the protocol who had always taken the interferon as prescribed. Everyone else in the study had skipped the medication numerous times—hardly surprising, given the unpleasantness involved. (Lack of medical compliance is, in fact, a very common problem.)

So how did I get through those months of torture? Did I simply have nerves of steel? Like every person who walks the earth, I have plenty of self-control problems and, every injection day, I deeply wanted to avoid the procedure. But I did have a trick for making the treatment more bearable. For me, the key was movies. I love movies and, if I had the time, I would watch one every day. When the doctors told me what to expect, I decided to motivate myself with movies. Besides, I couldn’t do much else anyway, thanks to the side effects.

Every injection day, I would stop at the video store on the way to school and pick up a few films that I wanted to see. Throughout the day, I would think about how much I would enjoy watching them later. Once I got home, I would give myself the injection. Then I would immediately jump into my hammock, make myself comfortable, and start my mini film fest. That way, I learned to associate the act of the injection with the rewarding experience of watching a wonderful movie. Eventually, the negative side effects kicked in, and I didn’t have such a positive feeling. Still, planning my evenings that way helped me associate the injection more closely with the fun of watching a movie than with the discomfort of the side effects, and thus I was able to continue the treatment. (I was also fortunate, in this instance, that I have a relatively poor memory, which meant that I could watch some of the same movies over and over again.)

THE MORAL OF this story? All of us have important tasks that we would rather avoid, particularly when the weather outside is inviting. We all hate grinding through receipts while doing our taxes, cleaning up the backyard, sticking to a diet, saving for retirement, or, like me, undergoing an unpleasant treatment or therapy. Of course, in a perfectly rational world, procrastination would never be a problem. We would simply compute the values of our long-term objectives, compare them to our short-term enjoyments, and understand that we have more to gain in the long term by suffering a bit in the short term. If we were able to do this, we could keep a firm focus on what really matters to us. We would do our work while keeping in mind the satisfaction we’d feel when we finished our project. We would tighten our belts a notch and enjoy our improved health down the line. We would take our medications on time and hope to hear the doctor say one day, “There isn’t a trace of the disease in your system.”

Sadly, most of us often prefer immediately gratifying short-term experiences over our long-term objectives.^* We routinely behave as if sometime in the future, we will have more time, more money, and feel less tired or stressed. “Later” seems like a rosy time to do all the unpleasant things in life, even if putting them off means eventually having to grapple with a much bigger jungle in our yard, a tax penalty, the inability to retire comfortably, or an unsuccessful medical treatment. In the end, we don’t need to look far beyond our own noses to realize how frequently we fail to make short-term sacrifices for the sake of our long-term goals.

WHAT DOES ALL of this have to do with the subject of this book? In a general sense, almost everything.

From a rational perspective, we should make only decisions that are in our best interest (“should” is the operative word here). We should be able to discern among all the options facing us and accurately compute their value—not just in the short term but also in the long term—and choose the option that maximizes our best interests. If we’re faced with a dilemma of any sort, we should be able to see the situation clearly and without prejudice, and we should assess pros and cons as objectively as if we were comparing different types of laptops. If we’re suffering from a disease and there is a promising treatment, we should comply fully with the doctor’s orders. If we are overweight, we should buckle down, walk several miles a day, and live on broiled fish, vegetables, and water. If we smoke, we should stop—no ifs, ands, or buts.

Sure, it would be nice if we were more rational and clearheaded about our “should”s. Unfortunately, we’re not. How else do you explain why millions of gym memberships go unused or why people risk their own and others’ lives to write a text message while they’re driving or why…(put your favorite example here)?

THIS IS WHERE behavioral economics enters the picture. In this field, we don’t assume that people are perfectly sensible, calculating machines. Instead, we observe how people actually behave, and quite often our observations lead us to the conclusion that human beings are irrational.

To be sure, there is a great deal to be learned from rational economics, but some of its assumptions—that people always make the best decisions, that mistakes are less likely when the decisions involve a lot of money, and that the market is self-correcting—can clearly lead to disastrous consequences.

To get a clearer idea of how dangerous it can be to assume perfect rationality, think about driving. Transportation, like the financial markets, is a man-made system, and we don’t need to look very far to see other people making terrible and costly mistakes (due to another aspect of our biased worldview, it takes a bit more effort to see our own errors). Car manufacturers and road designers generally understand that people don’t always exercise good judgment while driving, so they build vehicles and roads with an eye to preserving drivers’ and passengers’ safety. Automobile designers and engineers try to compensate for our limited human ability by installing seat belts, antilock brakes, rearview mirrors, air bags, halogen lights, distance sensors, and more. Similarly, road designers put safety margins along the edge of the highway, some festooned with cuts that make a brrrrrr sound when you drive on them. But despite all these safety precautions, human beings persist in making all kinds of errors while driving (including drinking and texting), suffering accidents, injuries, and even death as a result.

Now think about the implosion of Wall Street in 2008 and its attendant impact on the economy. Given our human foibles, why on earth would we think we don’t need to take any external measures to try to prevent or deal with systematic errors of judgment in the man-made financial markets? Why not create safety measures to help keep someone who is managing billions of dollars, and leveraging this investment, from making incredibly expensive mistakes?

EXACERBATING THE BASIC problem of human error are technological developments that are, in principle, very useful but that can also make it more difficult for us to behave in a way that truly maximizes our interests. Consider the cell phone, for example. It’s a handy gadget that lets you not only call but also text and e-mail your friends. If you text while walking, you might look at your phone instead of the sidewalk and risk running into a pole or another person. This would be embarrassing but hardly fatal. Allowing your attention to drift while walking is not so bad; but add a car to the equation, and you have a recipe for disaster.

Likewise, think about how technological developments in agriculture have contributed to the obesity epidemic. Thousands of years ago, as we burned calories hunting and foraging on the plains and in the jungles, we needed to store every possible ounce of energy. Every time we found food containing fat or sugar, we stopped and consumed as much of it as we could. Moreover, nature gave us a handy internal mechanism: a lag of about twenty minutes between the time when we’d actually consumed enough calories and the time when we felt we had enough to eat. That allowed us to build up a little fat, which came in handy if we later failed to bring down a deer.

Now jump forward a few thousand years. In industrialized countries, we spend most of our waking time sitting in chairs and staring at screens rather than chasing after animals. Instead of planting, tending, and harvesting corn and soy ourselves, we have commercial agriculture do it for us. Food producers turn the corn into sugary, fattening stuff, which we then buy from fast-food restaurants and supermarkets. In this Dunkin’ Donuts world, our love of sugar and fat allows us to quickly consume thousands of calories. And after we have scarfed down a bacon, egg, and cheese breakfast bagel, the twenty-minute lag time between having eaten enough and realizing that we’re stuffed allows us to add even more calories in the form of a sweetened coffee drink and a half-dozen powdered-sugar donut holes.

Essentially, the mechanisms we developed during our early evolutionary years might have made perfect sense in our distant past. But given the mismatch between the speed of technological development and human evolution, the same instincts and abilities that once helped us now often stand in our way. Bad decision-making behaviors that manifested themselves as mere nuisances in earlier centuries can now severely affect our lives in crucial ways.

When the designers of modern technologies don’t understand our fallibility, they design new and improved systems for stock markets, insurance, education, agriculture, or health care that don’t take our limitations into account (I like the term “human-incompatible technologies,” and they are everywhere). As a consequence, we inevitably end up making mistakes and sometimes fail magnificently.

THIS PERSPECTIVE OF human nature may seem a bit depressing on the surface, but it doesn’t have to be. Behavioral economists want to understand human frailty and to find more compassionate, realistic, and effective ways for people to avoid temptation, exert more self-control, and ultimately reach their long-term goals. As a society, it’s extremely beneficial to understand how and when we fail and to design/ invent/create new ways to overcome our mistakes. As we gain some understanding about what really drives our behaviors and what steers us astray—from business decisions about bonuses and motivation to the most personal aspects of life such as dating and happiness—we can gain control over our money, relationships, resources, safety, and health, both as individuals and as a society.

This is the real goal of behavioral economics: to try to understand the way we really operate so that we can more readily observe our biases, be more aware of their influences on us, and hopefully make better decisions. Although I can’t imagine that we will ever become perfect decision makers, I do believe that an improved understanding of the multiple irrational forces that influence us could be a useful first step toward making better decisions. And we don’t have to stop there. Inventors, companies, and policy makers can take the additional steps to redesign our working and living environments in ways that are naturally more compatible with what we can and cannot do.

In the end, this is what behavioral economics is about—figuring out the hidden forces that shape our decisions, across many different domains, and finding solutions to common problems that affect our personal, business, and public lives.

AS YOU WILL see in the pages ahead, each chapter in this book is based on experiments I carried out over the years with some terrific colleagues (at the end of the book, I have included short biographies of my wonderful collaborators). In each of these chapters, I’ve tried to shed some light on a few of the biases that plague our decisions across many different domains, from the workplace to personal happiness.

Why, you may ask, do my colleagues and I put so much time, money, and energy into experiments? For social scientists, experiments are like microscopes or strobe lights, magnifying and illuminating the complex, multiple forces that simultaneously exert their influences on us. They help us slow human behavior to a frame-by-frame narration of events, isolate individual forces, and examine them carefully and in more detail. They let us test directly and unambiguously what makes human beings tick and provide a deeper understanding of the features and nuances of our own biases.^*

There is one other point I want to emphasize: if the lessons learned in any experiment were limited to the constrained environment of that particular study, their value would be limited. Instead, I invite you to think about experiments as an illustration of general principles, providing insight into how we think and how we make decisions in life’s various situations. My hope is that once you understand the way our human nature truly operates, you can decide how to apply that knowledge to your professional and personal life.

In each chapter I have also tried to extrapolate some possible implications for life, business, and public policy—focusing on what we can do to overcome our irrational blind spots. Of course, the implications I have sketched are only partial. To get real value from this book and from social science in general, it is important that you, the reader, spend some time thinking about how the principles of human behavior apply to your life and consider what you might do differently, given your new understanding of human nature. That is where the real adventure lies.

READERS FAMILIAR WITH Predictably Irrational might want to know how this book differs from its predecessor. In Predictably Irrational, we examined a number of biases that lead us—particularly as consumers—into making unwise decisions. The book you hold in your hands is different in three ways.

First—and most obviously—this book differs in its title. Like its predecessor, it’s based on experiments that examine how we make decisions, but its take on irrationality is somewhat different. In most cases, the word “irrationality” has a negative connotation, implying anything from mistakenness to madness. If we were in charge of designing human beings, we would probably work as hard as we could to leave irrationality out of the formula; in Predictably Irrational, I explored the downside of our human biases. But there is a flip side to irrationality, one that is actually quite positive. Sometimes we are fortunate in our irrational abilities because, among other things, they allow us to adapt to new environments, trust other people, enjoy expending effort, and love our kids. These kinds of forces are part and parcel of our wonderful, surprising, innate—albeit irrational—human nature (indeed, people who lack the ability to adapt, trust, or enjoy their work can be very unhappy). These irrational forces help us achieve great things and live well in a social structure. The title The Upside of Irrationality is an attempt to capture the complexity of our irrationalities—the parts that we would rather live without and the parts that we would want to keep if we were the designers of human nature. I believe that it is important to understand both our beneficial and our disadvantageous quirks, because only by doing so can we begin to eliminate the bad and build on the good.

Second, you will notice that this book is divided into two distinct parts. In the first part, we’ll look more closely at our behavior in the world of work, where we spend much of our waking lives. We’ll question our relationships—not just with other people but with our environments and ourselves. What is our relationship with our salaries, our bosses, the things we produce, our ideas, and our feelings when we’ve been wronged? What really motivates us to perform well? What gives us a sense of meaning? Why does the “Not-Invented-Here” bias have such a foothold in the workplace? Why do we react so strongly in the face of injustice and unfairness?

In the second part, we’ll move beyond the world of work to investigate how we behave in our interpersonal relations. What is our relationship to our surroundings and our bodies? How do we relate to the people we meet, those we love, and faraway strangers who need our help? And what is our relationship to our emotions? We’ll examine the ways we adapt to new conditions, environments, and lovers; how the world of online dating works (and doesn’t); what forces dictate our response to human tragedies; and how our reactions to emotions in a given moment can influence patterns of behavior long into the future.

The Upside of Irrationality is also very different from Predictably Irrational because it is highly personal. Though my colleagues and I try to do our best to be as objective as possible in running and analyzing our experiments, much of this book (particularly the second part) draws on some of my difficult experiences as a burn patient. My injury, like all severe injuries, was very traumatic, but it also very quickly shifted my outlook on many aspects of life. My journey provided me with some unique perspectives on human behavior. It presented me with questions that I might not have otherwise considered but, because of my injury, became central to my life and the focus of my research. Far beyond that, and perhaps more important, it led me to study how my own biases work. In describing my personal experiences and biases, I hope to shed some light on the thought process that has led me to my particular interest and viewpoints and illustrate some of the essential ingredients of our common human nature—yours and mine.

AND NOW FOR the journey…

Part I THE UNEXPECTED WAYS WE DEFY LOGIC AT WORK

CHAPTER 1 Paying More for Less

Why Big Bonuses Don’t Always Work

Imagine that you are a plump, happy laboratory rat. One day, a gloved human hand carefully picks you out of the comfy box you call home and places you into a different, less comfy box that contains a maze. Since you are naturally curious, you begin to wander around, whiskers twitching along the way. You quickly notice that some parts of the maze are black and others are white. You follow your nose into a white section. Nothing happens. Then you take a left turn into a black section. As soon as you enter, you feel a very nasty shock surge through your paws.

Every day for a week, you are placed in a different maze. The dangerous and safe places change daily, as do the colors of the walls and the strength of the shocks. Sometimes the sections that deliver a mild shock are colored red. Other times, the parts that deliver a particularly nasty shock are marked by polka dots. Sometimes the safe parts are covered with black-and-white checks. Each day, your job is to learn to navigate the maze by choosing the safest paths and avoiding the shocks (your reward for learning how to safely navigate the maze is that you aren’t shocked). How well do you do?

More than a century ago, psychologists Robert Yerkes and John Dodson^* performed different versions of this basic experiment in an effort to find out two things about rats: how fast they could learn and, more important, what intensity of electric shocks would motivate them to learn fastest. We could easily assume that as the intensity of the shocks increased, so would the rats’ motivation to learn. When the shocks were very mild, the rats would simply mosey along, unmotivated by the occasional painless jolt. But as the intensity of the shocks and discomfort increased, the scientists thought, the rats would feel as though they were under enemy fire and would therefore be more motivated to learn more quickly. Following this logic we would assume that when the rats really wanted to avoid the most intense shocks, they would learn the fastest.

We are usually quick to assume that there is a link between the magnitude of the incentive and the ability to perform better. It seems reasonable that the more motivated we are to achieve something, the harder we will work to reach our goal, and that this increased effort will ultimately move us closer to our objective. This, after all, is part of the rationale behind paying stockbrokers and CEOs sky-high bonuses: offer people a very large bonus, and they will be motivated to work and perform at very high levels.

SOMETIMES OUR INTUITIONS about the links between motivation and performance (and, more generally, our behavior) are accurate; at other times, reality and intuition just don’t jibe. In Yerkes and Dodson’s case, some of the results aligned with what most of us might expect, while others did not. When the shocks were very weak, the rats were not very motivated, and, as a consequence, they learned slowly. When the shocks were of medium intensity, the rats were more motivated to quickly figure out the rules of the cage, and they learned faster. Up to this point, the results fit with our intuitions about the relationship between motivation and performance.

But here was the catch: when the shock intensity was very high, the rats performed worse! Admittedly, it is difficult to get inside a rat’s mind, but it seemed that when the intensity of the shocks was at its highest, the rats could not focus on anything other than their fear of the shock. Paralyzed by terror, they had trouble remembering which parts of the cage were safe and which were not and, so, were unable to figure out how their environment was structured.

The graph below shows three possible relationships between incentive (payment, shocks) and performance. The light gray line represents a simple relationship, where higher incentives always contribute in the same way to performance. The dashed gray line represents a diminishing-returns relationships between incentives and performance.

The solid dark line represents Yerkes and Dodson’s results. At lower levels of motivation, adding incentives helps to increase performance. But as the level of the base motivation increases, adding incentives can backfire and reduce performance, creating what psychologists often call an “inverse-U relationship.”

Yerkes and Dodson’s experiment should make us wonder about the real relationship between payment, motivation, and performance in the labor market. After all, their experiment clearly showed that incentives can be a double-edged sword. Up to a certain point, they motivate us to learn and perform well. But beyond that point, motivational pressure can be so high that it actually distracts an individual from concentrating on and carrying out a task—an undesirable outcome for anyone.

Of course, electric shocks are not very common incentive mechanisms in the real world, but this kind of relationship between motivation and performance might also apply to other types of motivation: whether the reward is being able to avoid an electrical shock or the financial rewards of making a large amount of money. Let’s imagine how Yerkes and Dodson’s results would look if they had used money instead of shocks (assuming that the rats actually wanted money). At small bonus levels, the rats would not care and not perform very well. At medium bonus levels, the rats would care more and perform better. But, at very high bonus levels, they would be “overmotivated.” They would find it hard to concentrate, and, as a consequence, their performance would be worse than if they were working for a smaller bonus.

So, would we see this inverse-U relationship between motivation and performance if we did an experiment using people instead of rats and used money as the motivator? Or, thinking about it from a more pragmatic angle, would it be financially efficient to pay people very high bonuses in order to get them to perform well?

The Bonus Bonanza

In light of the financial crisis of 2008 and the subsequent outrage over the continuing bonuses paid to many of those deemed responsible for it, many people wonder how incentives really affect CEOs and Wall Street executives. Corporate boards generally assume that very large performance-based bonuses will motivate CEOs to invest more effort in their jobs and that the increased effort will result in higher-quality output.^* But is this really the case? Before you make up your mind, let’s see what the empirical evidence shows.

To test the effectiveness of financial incentives as a device for enhancing performance, Nina Mazar (a professor at the University of Toronto), Uri Gneezy (a professor at the University of California at San Diego), George Loewenstein (a professor at Carnegie Mellon University), and I set up an experiment. We varied the amount of financial bonuses participants could receive if they performed well and measured the effect that the different incentive levels had on performance. In particular, we wanted to see whether offering very large bonuses would increase performance, as we usually expect, or decrease performance, analogous to Yerkes and Dodson’s experiment with rats.

We decided to offer some participants the opportunity to earn a relatively small bonus (equivalent to about one day’s pay at their regular pay rate). Others would have a chance to earn a medium-sized bonus (equivalent to about two weeks’ pay at their regular rate). The fortunate few, and the most important group for our purposes, could earn a very large bonus, equal to about five months of their regular pay. By comparing the performances of these three groups, we hoped to get a better idea of how effective the bonuses were in improving performance.

I know you are thinking “Where can I sign up for this experiment?” But before you make extravagant assumptions about my research budget, let me tell you that we did what many companies are doing these days—we outsourced the operation to rural India, where the average person’s monthly spending was about 500 rupees (approximately $11). This allowed us to offer bonuses that were very meaningful to our participants without raising the eyebrows and ire of the university’s accounting system.

Once we decided where to run our experiments, we had to select the tasks themselves. We thought about using tasks that were based on pure effort, such as running, doing squats, or lifting weights, but since CEOs and other executives don’t earn their money by doing those kinds of things, we decided to focus on tasks that required creativity, concentration, memory, and problem-solving skills. After trying out a whole range of tasks on ourselves and on some students, the six tasks we selected were:

1 Packing Quarters: In this spatial puzzle, the participant had to fit nine quarter-circle wedges into a square. Fitting eight of them is simple, but fitting all nine is nearly impossible.

2 Simon: A bold-colored relic of the 1980s, this is (or was) a common electronic memory game requiring the participant to repeat increasingly longer sequences of lit-up colored buttons without error.

3 Recall Last Three Numbers: Just as it sounds, this is a simple game in which we read a sequence of numbers (23, 7, 65, 4, and so on) and stopped at a random moment. Participants had to repeat the last three numbers.

4 Labyrinth: A game in which the participant used two levers to control the angle of a playing surface covered with a maze and riddled with holes. The goal was to advance a small ball along a path and avoid the holes.

5 Dart Ball: A game much like darts but played with tennis balls covered with the looped side of Velcro and a target covered with the hooked side so that the balls would stick to it.

6 Roll-up: A game in which the participant moved two rods apart in order to move a small ball as high up as possible on an inclining slope.

Having chosen the games, we packed six of each type into a large box and shipped them to India. For some mysterious reason, the people at customs in India were not too happy with the battery-powered Simon games, but after we paid a 250 percent import tax, the games were released and we were ready to start our experiment.

We hired five graduate students in economics from Narayanan College in the southern Indian city of Madurai and asked them to go to a few of the local villages. In each of these, the students had to find a central public space, such as a small hospital or a meeting room, where they could set up shop and recruit participants for our experiment.

One of the locations was a community center, where Ramesh, a second-year master’s student, got to work. The community center was not fully finished, with no tiles on the floors and unpainted walls, but it was fully functional and, most important, it provided protection from wind, rain, and heat.

Ramesh positioned the six games around the room and then went outside to hail his first participant. Soon a man walked by, and Ramesh immediately tried to interest him in the experiment. “We have a few fun tasks here,” he explained to the man. “Would you be interested in participating in an experiment?” The deal sounded suspiciously like a government-sponsored activity to the passerby, so it wasn’t surprising that the fellow just shook his head and continued to walk on. But Ramesh persisted: “You can make some money in this experiment, and it’s sponsored by the university.” And so our first participant, whose name was Nitin, turned around and followed Ramesh into the community center.

Ramesh showed Nitin all the tasks that were set up around the room. “These are the games we will play today,” he told Nitin. “They should take about an hour. Before we start, let’s find out how much you could get paid.” Ramesh then rolled a die. It landed on 4, which according to our randomization process placed Nitin in the medium-level bonus condition, which meant that the total bonus he could make from all six games was 240 rupees—or about two weeks’ worth of pay for the average person in this part of rural India.

Next, Ramesh explained the instructions to Nitin. “For each of the six games,” he said, “we have a medium level of performance we call good and a high level of performance we call very good. For each game in which you reach the good level of performance, you will get twenty rupees, and for each game in which you reach the very good level of performance you will get forty rupees. In games in which you don’t even reach the good level, you will get nothing. This means that your payment will be somewhere between zero rupees and two hundred forty rupees, depending on your performance.”

Nitin nodded, and Ramesh picked the Simon game at random. In this game, one of the four colored buttons lights up and plays a single musical tone. Nitin was supposed to press the lighted button. Then the device would light the same button followed by another one; Nitin would press those two buttons in succession; and so on through an increasing number of buttons. As long as Nitin remembered the sequence and didn’t make any mistakes, the game kept going and the length of the sequence increased. But once Nitin got a sequence wrong, the game would end and Nitin’s score would be equal to his largest correct sequence. In total, Nitin was allowed ten tries to reach the desired score.

“Now let me tell you what good and very good mean in this game,” Ramesh continued. “If you manage to correctly repeat a sequence of six steps on at least one of the ten times you play, that’s a good level of performance and will earn you twenty rupees. If you correctly repeat a sequence of eight steps, that’s a very good level of performance and you will get forty rupees. After ten attempts, we will begin the next game. Is everything clear about the game and the rules for payment?”

Nitin was quite excited about the prospect of earning so much money. “Let’s start,” he said, and so they did.

The blue button was the first to light up, and Nitin pressed it. Next came the yellow button, and Nitin pressed the blue and yellow buttons in turn. Not so hard. He did fine when the green button lit up next but unfortunately failed on the fourth button. In the next game, he did not do much better. In the fifth game, however, he remembered a sequence of seven, and in the sixth game he managed to get a sequence of eight. Overall, the game was a success, and he was now 40 rupees richer.

The next game was Packing Quarters, followed by Recall Last Three Numbers, Labyrinth, Dart Ball, and finally Roll-up. By the end of the hour, Nitin had reached a very good performance level on two of the games and a good performance level on two others. But he failed to reach the good level of performance for two of the games. In total, he made 120 rupees—a little more than a week’s pay—so he walked out of the community center a delighted man.

The next participant was Apurve, an athletic and slightly balding man in his thirties and the proud father of twins. Apurve rolled the die and it landed on 1, a number that, according to our randomization process, placed Apurve in the low-level bonus condition. This meant that the total bonus he could make from all six games was 24 rupees, or about one day of pay.

The first game Apurve played was Recall Last Three Numbers, followed by Roll-up, Packing Quarters, Labyrinth, and Simon, and ending with Dart Ball. Overall, he did rather well. He reached a good performance level in three of the games and a very good performance level in one. This put him on more or less the same performance level as Nitin, but, thanks to the unlucky roll of the die, he made only 10 rupees. Still, he was happy to receive that amount for an hour of playing games.

When Ramesh rolled the die for the third participant, Anoopum, it landed on 5. According to our randomization process, this placed him in the highest-level bonus condition. Ramesh explained to Anoopum that for each game in which he reached the good level of performance he would be paid 200 rupees and that he would receive 400 rupees for each game in which he reached the very good score. Anoopum made a quick calculation: six games multiplied by 400 rupees equaled 2,400 rupees—a veritable fortune, roughly equivalent to five months’ pay. Anoopum couldn’t believe his good luck.

The first randomly selected game for Anoopum was Labyrinth.^* Anoopum was instructed to place a small steel ball at the start position and then use the two knobs to advance the small ball through the maze while helping it avoid the trap holes. “We’ll play this game ten times,” Ramesh said. “If you manage to advance the ball past the seventh hole, we’ll call this a good level of performance, for which you will be paid two hundred rupees. If you manage to advance the ball past the ninth hole, we’ll call that a very good level of performance, and you will get four hundred rupees. When we’ve finished with this game, we’ll go on to the next. Everything clear?”

Anoopum nodded eagerly. He grabbed the two knobs that controlled the tilt of the maze surface and stared at the steel ball in its “start” position as if it were prey. “This is very, very important,” he mumbled. “I must succeed.”

He set the ball rolling; almost immediately, it fell into the first trap. “Nine more chances,” he said aloud to encourage himself. But he was under the gun, and his hands were now trembling. Unable to control the fine movements of his hands, he failed time after time. Having flubbed Labyrinth, he saw the wonderful images of what he would do with his small fortune slowly dissolve.

The next game was Dart Ball. Standing twenty feet away, Anoopum tried to hit the Velcro center of the target. He hurled one ball after another, throwing one from below like a softball pitch, another from above as in cricket, and even from the side. Some of the balls came very close to the target, but none of his twenty throws stuck to the center.

The Packing Quarters game was sheer frustration. In a minuscule two minutes, Anoopum had to fit the nine pieces into the puzzle in order to earn 400 rupees (if he took four minutes, he could earn 200 rupees). As the clock ticked, Ramesh read out the remaining time every thirty seconds: “Ninety seconds! Sixty seconds! Thirty seconds!” Poor Anoopum tried to work faster and faster, applying more and more force to fit all nine of the wedges into the square, but to no avail.

At the end of the four minutes, the Packing Quarters game was abandoned. Ramesh and Anoopum moved on to the Simon game. Anoopum felt somewhat frustrated, but he braced himself and tried his utmost to focus on the task at hand.

His first attempt with Simon resulted in a two-light sequence—not very promising. But, on the second try, he managed to recall a sequence of six. He beamed, because he knew that he had finally made at least 200 rupees, and he had eight more chances to make it to 400. Feeling as though he was finally able to do something well, he tried to increase his concentration, willing his memory to a higher plane of performance. In the next eight attempts, he was able to remember sequences of six and seven, but he never made it to eight.

With two more games to go, Anoopum decided to take a short break. He went through calming breathing exercises, exhaling a long “Om” with each breath. After several minutes, he felt ready for the Roll-up game. Unfortunately, he failed both the Roll-up game and the Recall Last Three Numbers task. As he left the community center, he comforted himself with the thought of the 200 rupees he had earned—a nice sum for a few games—but his frustration at not having gotten the larger sum was evident on his furrowed brow.