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I'm Adam Grant I'm here with Steven Dubner the author of The Freakonomics
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Enterprise along with Steven levit Stephen welcome thanks Adam uh your books have been fascinating to read
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they've obviously created an international explosion your latest is Think Like a Freak what motivated you to
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write this one well boredom no um honestly after so we wrote the first one together which was an accident I was a I
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am a journalist I hadd written an article about Steve levit and his strange brand of um e economics economic
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research and I was working on a totally separate book about the psychology of money I was really was and remain really
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interested in that so I was interested in behavioral economics what we now call that so I wrote about Lev then we
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decided after this article uh someone decided it would be a good idea if we teamed up and we did and wrote free
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economics which was very successful we didn't plan on it being successful we
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didn't plan on working together even once then we thought do we want to do another and we took about two years to
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to decide if we did and if we had if we could come up with enough good material for a second one which we did then for a
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third one we were pretty sure we weren't going to do another because we just
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didn't want to you know milk it um Contra the wishes of our publisher an agent you know you have to anytime
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someone sees a franchise presented to them they want to take it and exploit it and we just you know we had slightly
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different incentives we felt like we'd profited and been really lucky to get to
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that point and we didn't want to exploit it uh unless we had material that we
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were really proud of so again it took us a couple years to come up with a framework for a different book and
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that's this this third book Think Like a Freak and basically what what happened
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is we hear from people a lot emails mostly which is great I mean you know of all the things that the digital
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revolution has produced one of the coolest simplest ones is you can now contact people who write books that you
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read which used to be you used to have to write a letter to the publisher and hope they pass along which they never
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did so we hear from people with all these problems and questions and queries about the way the world works and we
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couldn't answer them all it's hard you know to answer one email well could take
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forget about one day could take months of research so rather than trying and failing to answer A Shard of those
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questions we thought what if we could write a book that basically deputizes the entire world or whoever wants to to
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think like we do to to kind of develop a set of rules a kind of blueprint for for
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essentially problem solving um it's not always problem solving but mostly that's
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what we try to do and that's what this book is it's meant to be a fun engaging
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practical way to think about the way the world really works think about the way incentives really work the way that
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people really respond to incentives rather than how they say they might and then if you're trying to solve a problem
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big or small in business or government or in your own family you know how you can maybe slightly increase your chances
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to actually solve it that's the idea well you you certainly accomplish those
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goals and you start with the premise that there are three words that all of us should probably utter more often than
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we do which are I don't know yeah where did that come from um well I think that came primarily from
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the fact that levit and I Le Steve levit my co-author you know he lives in a world of in the world of Academia where
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you are I'm a writer I've been a journalist you know for my whole adult life and both of us wouldn't have a job
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if we pretended we knew all the answers all the time the whole premise of what I
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do as a journalist is go find people who know things that are interesting or worthwhile or hidden and ask them about
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it try to find out so you have to acknowledge what you don't know levit in Academia and you in Academia you know
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what academic what good academic research is like good medical research like good uh physics or engineering
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research is trying to Sol trying to figure out questions um where you don't yet know the answers so once you come in
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with that mindset you're going to have a different approach you're going to
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acknowledge what you know which may not be very much and what you don't know and
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then you're going to in order to try to figure out what you need to know you're
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going to develop a framework for experimentation Gathering feedback and so on now as totally ridiculously
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obvious as that sounds what I just said there are huge quadrants of modern society particularly in business and in
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government where people are constantly pretending they know the answer to a question or the solution to a problem
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and I get it I understand the way the incentives work I understand that reputational you know reputation Works
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nobody wants to be the ignoramus or the dummy so if I'm a politician and someone
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says you know Governor blah blah Senator blah blah you know we just had this terrible mass shooting at a school if
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you could do anything if if all options were available to you what would you do to prevent that fut in the future the
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way the world works is I'm I'm going to tell you I'm going to tell you I'm going
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to do these three things and that's what'll do it do you have any evidence
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is there any empirical reason to think that that actually would work often I hate to say it no and so you see that in
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certain Realms politics and in business where the incentives are different there's a big incentive to get it right
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in business but there's also a lot of you know for lack of a a more sophisticated term peer pressure to be
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the gal or guy who knows who has the plan so you know a really basic um you know rule of thumb is uh um you know or
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a basic Mo that happens very frequently now is a firm will say we need to come up with a plan or a solution let's get
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our 20 top people get together in a room for an hour that's 20 person hours and
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let's come up with the best one the best idea and then put all our resources into
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that and go what are the odds I mean if this were science what are the odds that
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that would bear a good result almost none so then there's the counter example
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of Someone Like A Google who lets its Engineers take 20% of their time and work on their projects on the side the
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idea being you know have a lot of ideas most of them will be bad but let the triage process work and let people
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figure out through scientific or empirical ways how they can really learn stuff and then once you've done some
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experimentation and some small scale work then maybe put some resources behind it so that's something that I
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think business needs to do much better but I think many businesses are moving in the right direction and
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the digital Revolution helps that so much because it's now so easy and cheap
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to gather data and do AB testing or a through z testing to tell you what's actually working do you have favorite
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tests that you're seeing recently that kind of represent this revolution in a
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positive direction as opposed to you know we can all name bad decisions that should have been based on evidence but
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weren't are there are there any standout examples for you I'll tell you one
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example Le I don't know how well it's working out I did some reporting on it a
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few years ago I have no idea how well it's working out I like the idea because
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it's uh the federal government doing it and the federal government has typically
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been really bad I mean they're the worst and if you think about it it makes sense
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why they are on the top theoretically in some ways of 50 state governments and all those Municipal governments under
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them so they're not in a position really to go micro um and I I understand that
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but what they did with this race to the toop program and education I thought was
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a really good idea and again I don't know how well it's going to work out but
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basically they set up first of all a contest which means that there are incentives that presumably are going to
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work better than no incentives or then than there's or better than some kind of
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negative reinforcement that we're used to and basically uh you know Arie Duncan
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Secretary of Education the president said to all the states hey we need to think of ways to improve or rethink our
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education system and believe me you know I could talk about that for years because education is such a complicated
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box with so many inputs and so many outputs it's it's really easy to look
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for Magic Bullets you know hire Pay Teachers more or get rid of the unions or smaller class size everybody likes
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those Magic Bullets but it's a very complicated scenario so basically the Department of Education said we go to
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all 50 states each of you we want you to try to come up with a good program a good idea a good solution that works and
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if works we'll pay you for it and there's a good chance then we'll run it
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up and we'll kind of you know standardize it that's the right kind of thinking um think
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small don't pretend you know the answers um experiment get feedback these are all
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the premises of Think Like a Freak really and and there's one example where even the federal government which we're
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not used to thinking that empirically I think you know gave it a good shot you have some fascinating examples of the
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book uh that probably stretch beyond what most readers would themselves be willing to do uh one of which is you
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actually got people to agree to let you randomly assign them to do things like ask for a raise or quit their job or
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even break up with their significant other uh what was the logic behind that what you learn so this came about
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because of a uh a podcast episode we do free economics Radio podcast and public radio show and we did an episode that I
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I love it was just to me this was a great topic because it's a blend of data
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and empirical thinking with narrative storytelling which is my tradition um so it was called the upside of quitting and
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it was basically making an economic argument to some degree which is um considering that most of us have been
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conditioned to not quit we've been conditioned to think that quitting is an equivalent of fail is a failure a form
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of failure um how do we know that that's true and how much of the counter might
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be opposite so um you know if you think about a project a job a war you know all
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a relationship all these things that you might could quit but because of sunk costs and because of peer pressure and
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because of um you know your own moral position you might not want to quit we tried to look at you know what is the
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upside of quitting and we we argued that there's a significant upside that people
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are really bad at um estimating um opportunity cost what they could be doing if they could quit and so on so
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but the fact is it's really hard to get data on this because it's not like
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you can go into you know one big school district and say you know I'm going to
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take a thousand kids and I'm going to totally mix them so their grades are you
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know equivalent on either side and I'm going to randomly Force half of them to
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quit school uh don't allow them to go back to school and then 10 and 20 and 30
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years later see how their lives turned out that's one way to you might do that
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experiment but of course we couldn't do that the people who tend to quit school
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tend to be a very different population than the people who don't quit school so
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to compare them after is not equivalent so what we came up with was a website called free economics experiments where
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we offered that if people had a decision to make it wasn't necessarily something
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to quit although usually it was if they had a decision to make um should I quit my job and go back to grad school should
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I join the military or stick with my job should I leave my boyfriend or girlfriend or husband or wife uh all
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different kinds of things should I get a tattoo or not and if they had a decision
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and they couldn't and they really were on the really truly on the fence then we
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offered to help him out and flip a coin for him and we asked all we asked is that they fill out a survey beforehand
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telling us about it and that then they tell us whether or not they followed the coin because we have no power to make
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them follow the coin and then we would follow up with them and and do research later to find out uh what their outcomes
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were and so to many different categories a variety of outcomes and the research isn't done yet but the short short
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answer is that when people quit something that they were generally really worried about quitting their
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lives tend to get a little bit better so even if they didn't get a lot worse you
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might argue that it's a a pretty good uh a pretty good bet so basically I think we should all consider
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quitting as a really good option um but you know it's hard when you have the
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words of Vince Lombardi you know a quitter never wins and a winner never quits which was wasn't Lombardi
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originally and Winston Churchill telling people never never never never never give up in anything large or small
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greater Petty you know you have these great people and that gets in your ear and it convinces you that oh man if I
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start a project I have to see it through but if you just for five minutes spend some time thinking about the sunk cost
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and thinking about opportunity cost then you can really get to different places so that's what we were trying to
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accomplish there well I'm the opposite of quitting I think another one of the
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most audacious things that comes out and think like a freak dates back to Super Freakonomics I remember reading that you
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said that that basically terrorists should buy life insurance and thinking there was an awfully interesting way
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that you could use that information which you then went and did tell us a little so you thought yeah you you were
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thinking a step ahead of most people reading I was just right with you thinking like a social scientist well a
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lot of people were thinking so right in super fre economics we described this algorithm that levit worked on with a a
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British bank that was trying to catch terrorists from nothing more than retail banking data that was for our purposes
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anonymized and so there were all these metrics that seemed to indicate someone who might be uh you know either we
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couldn't tell from their banking dat it wasn't like we know that they're buying
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bomb making materials although that would have showed up but they're not that stupid but if they were consorting
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with other people um but then there were other Clues um that would uh raise the that would move the needle for
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indicating that someone is is quite possibly involved in it but then there was one argument that we made in super
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fre economics that if you really um one really good indicator is that young men who are prone to thinking about
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terrorism are not going to buy life insurance from their bank because why would you because if you if you kill
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yourself in the commission of a crime it's not going to pay out so why would
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you waste the money that was the argument we made so basically we were saying here's this algorithm we made
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here are what here are the metrics that comprise the algorithm there's one or
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two that are too good we're not going to tell you but here's by the way is
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another really good one that we will tell you which is that you should buy life insurance from your bank now this
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was done for real the algorithm was real and we were really trying to catch people and it worked to some degree we
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think it worked to some degree but the life insurance thing was just a red herring or it was a it was a trap and
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the idea was that very few people buy life insurance from their banks anyway like very very very few people even
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though most banks offer it and the same is in Britain but by putting that in our
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book and then when we went to uh Britain for book tour what most people were saying when they interviewed us is you
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idiots why would you go to the trouble to build a a tool to catch terrorists then tell them how to evade it and then
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we were just like well yeah maybe we huh because that's the tool yeah so um because that was the tool so then the
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algorithm was already in place uh by that point so anybody that saw us talking about this or saw journalists
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there yelling at us for giving away this clue what are they maybe now a little bit more likely to do if they're guilty
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to cover their tracks go buy some life insurance from their bank then the algorithm being in place we could look
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at that data and see who already fit the profile and now additionally ran out and
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bought some life insurance and that increased the likelihood even a little bit more that those people were bad guys
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that generated a new smaller list that we then passed on to the authorities there do you know what was done with
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that list so my colleague Lev presented It To The Head or near head of uh the Intelligence
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Division he presented it it was literally an envelope with a wax seal because he'd been given the envelope
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from the bank because we were again we weren't allowed to see any identifying
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data on any of the people and it was a little bit it it was a little bit um maybe James Bond outtake combined with
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uh the very end of Raiders the Lost Arc where they get the arc and it and it goes into the warehouse and the camera
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pulls back and you see that there are 8 million boxes so we have no idea uh whether this list that we were quite
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sure had some value for anti-terror uh purposes um whether or to what degree it was put to use uh that that wasn't part
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of the game we were allowed to play in basically yeah so in closing um other than saying I don't know when working on
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Freakonomics the book the radio the podcast the movie um through that whole process what's the biggest lesson you've
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taken away about how to think like a freak oh the biggest lesson um I I guess I should know that by now
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shouldn't I since this is kind of my thing um you know I it's amazing that I'm
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coming up blank to the question that should be the first one that I don't come up blank to um I I guess I really
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um so this is more of a philosophical answer than a a kind of tactical or strategic answer to me the challenge is
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always going to be the blend between the empirical or scientific or data whatever
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you want to call that and the intuitive or the human or the Humane whatever you want to call that and what I mean by
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that is especially in this era of big data which is kind of what we've been doing for a long time now not as
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systematically as a lot of firms and governments are doing it now but you know we believe in it we believe that if
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you get a pile of data representing a million decisions that that's better than asking three people what decisions
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they made so while I very much believe that to be true and I very much applaud all the instincts for all of us to kind
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of work with data in aggregate to distill the biggest truths I also know that we're humans and that we're
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fallible and bi I shouldn't say fallible although we're fallible too we're biased
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in a lot of ways so that even if you could tell me or I could tell you the most foolproof strategic way to reach a
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decision or the best decision to make or the best strategy or the best set of numbers to embrace there might be a lot
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of good reasons why you still won't be successful and that's because the people
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that you are now employing that strategy on or the people that you're now offering those incentives to don't
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respond the way way you think about the problem and that requires a lot of humility um and that's something that
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people in government in business in Academia in journalism uh everywhere where you know people in all those
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fields are really used to like when we come up with something and we put it into play we're used to people like
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snapping up and saying okay we're going to do this now that's a lot of power
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that's a lot of authority but with that power and authority comes I think the
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need for humility to understand that when you make decisions like that put out incentives whatever they are big or
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small governmental or non that there are people on the other end of that and how
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it affects their lives the decision makers don't often think through very well how they'll respond to the
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incentives and so on and so that to me is the balance to be as scientific as you can while understanding that even if
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I can present a 100 people with the science that says hey you should really do this 90 of them might have a really
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good reason for not wanting to do it they might be wrong I might be right but it doesn't mean I'll win the argument
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and being right doesn't win that many arguments um weirdly enough I mean there
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are a lot of people who are right about a lot of things who who don't get their
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way so I think that's really the the trickiest part I mean I'm working on a a
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radio Podcast episode right now about the flu vaccine very very simple it's pretty effective the flu vaccine about
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60% or so influenza along with pneumonia is always one of the 10 leading causes of death in the US which most people
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don't think about or don't know and um and yet very few people a lot of people
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who should get the flu vaccine don't why it's kind of a conundrum so we're going
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through all these different layers of Behavioral and uh PR um and uh um you know financial decisions to try to
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figure out how is something as seemingly simple as this so hard to accomplish and
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that is what I'm constantly reminded is the people the smart money may be smart
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but unless it can deliver on something that really raises everyone's Behavior
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then it's not worth that much thank you for joining us my pleasure Adam [Music]
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thanks