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

Feb 24, 2023

In today's conversation, I am joined by Dr. Nick Epley, Director of the Center for Decision Research at the University of Chicago Booth School of Business. I was introduced to Nick by the amazing Ayelet Fishbach, who has been on The Brainy Business twice before.

Nick studies social cognition—how thinking people think about other thinking people—to understand why smart people so routinely misunderstand each other. He teaches an ethics and well-being course to MBA students called Designing a Good Life (sounds like a perfect fit around here, and we do talk about this in the episode). His research has appeared in more than two dozen empirical journals, been featured by the New York Times, Wall Street Journal, CNN, Wired, NPR, and more. 

As Nick will share with us may not realize it, but you were born with an extraordinary ability to understand what others think, feel, believe, want, and know. You are a mind reader! It’s a sixth sense you use every day, in every personal and professional relationship you have. Today, Nick will share a bit of what scientists have learned about our ability to understand others and the surprising mistakes we so routinely make.

Show Notes:

  • [00:45] In today's conversation, I am joined by Dr. Nick Epley, director of The Center of Decision Research at the University of Chicago, Booth School of Business. Nick studies social cognition.
  • [02:52] You may not realize it, but you were born with an extraordinary ability to understand what others think, feel, believe, want, and know. You are a mind reader. 
  • [05:02] Nick shares about himself and his background. He is a professor of behavioral science at the University of Chicago. 
  • [07:32] There are systematic gaps between our beliefs about someone else and reality. If we can understand what those gaps are we can understand why they exist. 
  • [09:38] The quality of our social relationships is a critical determinant of our happiness, probably the most important. Other people are the single biggest source of our happiness as well as our misery. 
  • [11:55] One of the big barriers to people being more social in their daily lives is that they underestimate how social others are. 
  • [13:35] We get that risk-reward trade-off with other people wrong. We think it is riskier to reach out and engage than it is. 
  • [15:05] Failing to realize that other people are social is a barrier to us.
  • [17:43] One of the common things we find is that people are often surprised at how much they learned, how enjoyable the conversation was, and how much they have in common with the other person. 
  • [20:22] Conversations have a magnetic quality to them. It draws people together and surprises people. 
  • [22:02] If you don’t like small talk…stop having it. When you take an interest in other people they reveal interesting stuff and take an interest in you. 
  • [24:18] Take an interest in another person - that is how you have good conversations. 
  • [26:26] If you care about somebody then you ask them questions that matter to them. Treat other people like they are good friends. 
  • [28:09] When people imagine having a meaningful conversation with a stranger, they think the other person is not going to want to hear about it or care about it. When they get into it and open up to each other it generally goes way better than people expect. 
  • [29:56] Having a culture where people are open, honest, and willing to engage and connect with one another, they feel connected to the place because they are connected to each other is the kind of culture that every organization wants to have and helps get the job done. 
  • [31:56] People’s reluctance to reach out and engage with others is exactly the kind of barrier that organizations would want to get rid of. 
  • [33:38] The things that basic psychology has to teach people in business is the same thing we have to teach people in their everyday lives.  
  • [36:02] If you are bringing people into your organization, think about interviewing with your culture in mind. 
  • [38:46] When you make connection activities routine, common, easy, and part of the habits so people aren’t thinking about it, you design it with the context so it just happens this way that is how they spread through organizations and you sustain them. 
  • [41:30] Often organizations don’t choose to make these types of opportunities a priority.  
  • [43:52] Typing and texting lack the emotion and the thinking behind those words that you get from a person’s voice. 
  • [45:32] Share kind thoughts with other people. 
  • [46:35] Think about somebody you feel grateful to and write them a note. Try to connect with a stranger.
  • [49:17] Melina’s closing thoughts
  • [50:36] Take the time for real human connections, even small ones each day and see what happens. 

Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

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