Unpacking Charitable Giving and Tipping Behaviors

John List — A Master Economist on Strategic Quitting, How to Practice Theory of Mind, Learnings from Uber, Optimizations to Boost Donations, the Primitives of Decision-Making, and How Field Experiments Reveal Hidden Realities | Brought to you by Athletic Greens all-in-one nutritional supplement, Four Sigmatic mushroom coffee, and Allform premium, modular furniture. More on all three below.

John A. List (@Econ_4_Everyone) is the Kenneth C. Griffin Distinguished Service Professor in Economics at the University of Chicago.

His research has led to collaborative work with several different firms, including Lyft, Uber, United Airlines, Virgin Airlines, Humana, Sears, Kmart, Facebook, Google, General Motors, Tinder, Citadel, Walmart, and several nonprofits. For decades, his field experimental research has focused on issues related to the inner workings of markets; the effects of various incentives schemes on market equilibria and allocations; how behavioral economics can augment the standard economic model; early childhood education and interventions; and, most recently, on the gender earnings gap in the gig economy (using evidence from rideshare drivers). 

His research includes more than 200 peer-reviewed journal articles and several published books, including the best seller he coauthored with Uri Gneezy, The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life, and his new book, The Voltage Effect: How to Make Good Ideas Great and Great Ideas Scale.

List was elected a member of the American Academy of Arts and Sciences in 2011 and a fellow of the Econometric Society in 2015. He received the 2010 Kenneth Galbraith Award, the 2008 Arrow Prize for Senior Economists for his research in behavioral economics in the field, and was the 2012 Yrjö Jahnsson Lecture Prize recipient. He is a current editor of the Journal of Political Economy.

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What is a clawback incentive, and how has John found it useful as a father of eight children? What other incentives have proven to be effective social tools in the real world? [07:44]

The side effects of modifying or removing incentives, how incentive durability is measured, and why getting human beings to take on short-term inconveniences for long-term but far-off rewards can be troublesome. [15:23]

John details his extensive work researching the science of charitable giving and tipping (particularly with ridesharing) and what he’s discovered over time. [22:33]

Why the ability to publish his work in academic journals was the deciding factor in John’s acceptance of a job at Uber over Amazon, and what research had to say about the efficacy of tipping ranges in user interfaces. [35:07]

What data says about customer service and the power of apologies, and the consequences of allowing such data to be published in academic journals instead of hidden away in some proprietary lockbox. [44:04]

What John learned about human nature by measuring social preferences and reputation effects in actual transactions as an economist — and during his time as a baseball card dealer. [51:52]

John’s thoughts on critical thinking hierarchy, theory of mind, and what the bar scene in A Beautiful Mind got wrong about the Nash equilibrium. [57:54]

How does someone develop theory of mind as an applicable skill? [1:03:09]

How John came to win a poker tournament in Australia while killing time before a conference. [1:07:34]

What prompted John to write The Voltage Effect: How to Make Good Ideas Great and Great Ideas Scale? [1:10:26]

John addresses the replication and credibility crises in science, and their real-world consequences. [1:15:38]

“Scaling is not a silver bullet problem. Rather, it is an Anna Karenina problem.” How to check the vital signs that determine if an idea is scalable, with Jonas Salk’s success in conquering polio by way of vaccination serving as an example. [1:19:36]

Untended side effects of failing to understand spillovers while scaling — like when the introduction of tipping to the ridesharing dynamic presents drivers with a new set of problems, or when drivers exploit technical loopholes to ditch responsibility for rudely cancelling a customer’s pickup from afar. [1:28:09]

Why did John have such a slow start entering the job market after getting his PhD? What was holding him back? [1:36:34]

Is there any application for fractal mathematics to economics? [1:41:26]

Scalable incentives, marginal thinking, optimal quitting, and building culture. [1:45:46]

Why is StubHub one of John’s favorite apps? [2:07:46]

Thoughts on blockchain as a rich source of data for behavioral economists. [2:09:10]

How should a modern, uninitiated audience approach Adam Smith’s The Wealth of Nations? [2:12:05]

Parting thoughts. [2:16:30]

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