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The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics

May 22, 2020

Today’s episode features a discussion with Dr. Dan Ariely – you know that name by now right? We talk about the numberless smart scale from the company he co-founded, Shapa, and all the research behind it.  

I am very excited to introduce you to Dan Ariely, one of the best known behavioral economists in the world whom I have mentioned many times on the first 100 episodes of the show, and I know I will continue to do so after he helped me kick off these next hundred. He wrote Predictably Irrational and several other books and has done some amazing research.

As I mentioned in the opening, Dan has worked on a huge amount of projects, and while this conversation could have gone in a million directions, we are specifically talking about Shapa. The company he co-founded showcases a numberless scale that was created to change the way we all think about our health and make it easier to do something that many of us find scary…stepping on the scale.

The discussion ties back to a bunch of past episodes (including loss aversion, partitioning, the focusing illusion, herding) as well as on an experiment I did which was influenced by one of Dan’s studies from Kenya. We also talk about overall health (emotional, physical, financial) and how it is all related. I hope you enjoy the conversation as much as I did, and thank you again for joining me Dan!


Show Notes:

  • [02:18] In this episode we are specifically talking about Shapa. A company Dan co-founded for a numberless scale that was created to change the way we all think about our health.
  • [03:26] Shapa has many components. How would a social scientist approach helping people lose weight? 
  • [05:04] The struggle for health is a daily struggle. You can’t be healthy five days a week. It doesn’t work. Your healthy life needs to start in the morning. 
  • [07:08] They started studying the bathroom scale. They learned it is a good idea to stand on the scale every morning, not at night. 
  • [08:01] The second thing they learned is that weight fluctuates from 2-8 pounds a day. (wow!)
  • [09:38] They also learned that people think their weight will change very fast if they go on a diet. The reality is that it can take 8 days to two weeks to see results. 
  • [12:31] A year where nothing bad happens is an amazing year. 
  • [12:36] The story of obesity in the U.S. is a story of gaining a little bit throughout the year and not losing - especially in November and December. 
  • [13:39] Shapa created this 5 point scale which includes, “congratulations nothing bad happened!” They tested it and the studies were great.  
  • [15:34] We are obsessed with absolute levels. People usually want to know how what they are doing is improving their health and they want to be motivated. 
  • [16:55] When people go to the doctor they get stressed and their blood pressure goes up. If you go to the doctor and you are the kind of person that gets stressed because you’re seeing a doctor, they might prescribe you blood pressure medicine because you are stressed because of the doctor not because you are really stressed usually.  
  • [18:29] The way they start the process with Shapa is that they ask people to tell them about their environment. 
  • [19:54] Suggestions are sorted by the probability that you will take them and then they give you tips. 
  • [20:07] They focus on small changes and do it for two weeks and then add the next one. 
  • [22:53] Look with fresh eyes from social science about little things in life and then use the digital revolution to really change things. 
  • [24:51] The problem is that the scale has become so negative and the numbers are so depressing. 
  • [25:44] How much do you want to be in a race where the best you can do is not that bad? 
  • [27:59] We need to change our thinking about finances and health. We need to do more things that give people a sense of success and achievement.
  • [30:34] Finances and health are both long-term and often painful struggles; we need strong motivation to achieve there. 
  • [32:17] What are the incentives we can give people to behave in a certain way?
  • [33:30] Shapa has five levels and they each have a different color.
  • [34:39] Mostly we want to have no change with improvements from time to time. 
  • [35:12] Focus on the things where you can make the biggest behavioral impact.
  • [37:02] The feeling of success is important to keep people motivated.
  • [39:46] It is time to fix some of the habits we got wrong during the coronavirus crisis. It is time to take care of ourselves and feel better about ourselves. 
  • [43:10] It always comes back in this way, and you never know what is around the corner.
  • [43:33] If you are working on a health journey as well, with a Shapa or on your own, let’s support each other and do this together - connect with me on social media (links below!).

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