Choiceology with Katy Milkman

Hardware stores and home improvement shows often promote do-it-yourself projects. And while it’s challenging to make your own projects look as good as the ones on TV or in glossy brochures, building something yourself can be a very rewarding experience. The trouble is, the DIY approach can sometimes cloud your perceptions of the value of your project.In this episode of Choiceology with Katy Milkman, we look at how putting personal effort into something—be it a hand-knit scarf, a new deck, or even a small business—can lead people to overestimate the value of that effort.Michael Ojo is a web developer and pilot influencer. He runs a popular YouTube channel called MojoGrip, where he shares his love of aviation. It’s also where he documented a project near and dear to him: the building of his first kit airplane, the Sling TSI. You’ll hear the story of Michael’s epic project. Everything from the steep learning curve, to the technical challenges, to the trials and tribulations of building a complicated piece of machinery in the midst of a pandemic. And then, the big question: will it fly?Next, Mike Norton joins Katy to discuss the science behind why people tend to place a higher value on their own projects, using research that, among other experiments, observed volunteers as they completed simple origami projects and then had them auctioned off against origami made by an expert. The results were surprising, and quite charming, as you’ll hear from our re-enactment of the experiment.Michael I. Norton is the Harold M. Brierley Professor of Business Administration at the Harvard Business School and co-author of the book Happy Money: The Science of Smarter Spending.Finally, Katy discusses the ways in which you can leverage this effect to boost happiness and satisfaction, while avoiding the pitfalls of overvaluing your own handiwork.Choiceology with Katy Milkman is an original podcast from Charles Schwab. For more on the series, visit schwab.com/podcast.If you enjoy the show, please leave a ⭐⭐⭐⭐⭐ rating or review on Apple Podcasts.Important Disclosures:All expressions of opinion are subject to change without notice in reaction to shifting market conditions.The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.All corporate names are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.Investing involves risk, including loss of principal. (0321-1YAM)

In a past episode titled “Spoiled for Choice,” we looked at how decision-making can be hampered by our desire to avoid the painful emotion of regret. In fact, regret aversion can cause people to abandon certain decisions entirely.In this episode of Choiceology with Katy Milkman, we look more closely at regret itself. Stirling Hart is a professional lumberjack. He’s also a world-class lumberjack sports athlete. He has travelled the world competing against the best of the best in events such as the underhand chop, the spring board, the single buck, and the standing block chop. These grueling and dangerous tasks require explosive strength, accuracy, and nerves of steel.In 2016, Stirling Hart represented Canada at the Stihl Timbersports® World Championship in Stuttgart, Germany. He was dominating the events until he came to the hot saw (an event involving a chainsaw built from a modified motorcycle engine). That’s when one split-second decision changed the course of the competition. You’ll hear how that one moment affected Stirling for months afterward.Stirling Hart lives and works in Squamish, British Columbia, Canada.Next, Katy speaks with Colin Camerer about the neuroscience of regret. Colin explains how regret arises and how it can affect our behavior, for better and for worse. You’ll hear about a fascinating study by Tom Gilovich identifying regret in Olympic medalists, and you’ll learn about the ways that regret can influence investment decisions. You’ll also gain valuable insight on how to minimize some of the negative effects of regret.Colin Camerer is a Robert Kirby Professor of Behavioral Finance and Economics at the California Institute of Technology, where he teaches cognitive psychology and economics. You can read more about regret in his paper “Neural Evidence of Regret and Its Implications for Investor Behavior.”Choiceology is an original podcast from Charles Schwab. For more on the series, visit schwab.com/podcast.If you enjoy the show, please leave a ⭐⭐⭐⭐⭐ rating or review on Apple Podcasts.Important Disclosures:All expressions of opinion are subject to change without notice in reaction to shifting market conditions.The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.Investing involves risk, including loss of principal. (1020-081T)

For some people, the check engine light on their car dashboard means an immediate trip to the repair shop. But for others, it represents a nagging unpleasant feeling that’s best to be avoided. So they put it out of their mind for as long as they can. In this episode of Choiceology with Katy Milkman, we examine the tendency to avoid or ignore certain information when it may be uncomfortable or inconvenient.Amelia Boone is a high achiever. Within a short time of taking up the grueling sport of obstacle course racing, she was winning world championships. At the top of her game, she went looking for other challenges, and eventually took up ultra-running—where athletes compete in races longer than marathons, sometimes as long as 100 miles! Again, Amelia quickly rose to the upper echelons of this elite club of athletes.But then the injuries began. You’ll hear about Amelia’s attitude of pushing through the pain and training harder—an attitude that nearly destroyed her athletic career. When her injuries finally sidelined her from racing, Amelia realized that she’d been ignoring a crucial aspect of her health. Amelia Boone is an obstacle racer, ultra-runner, and attorney living in Colorado.Next, Emily Ho joins Katy to talk about the science behind this tendency to avoid certain types of information. She explains how the phenomenon impacts investors, medical patients, and employees, and she illustrates the perils of ignoring uncomfortable facts.Emily Ho is a research assistant professor at Northwestern University’s Department of Medical Social Sciences. You can read more about information avoidance in the research paper she co-authored with George Loewenstein and David Hagmann.Choiceology is an original podcast from Charles Schwab. For more on the series, visit schwab.com/podcast.If you enjoy the show, please leave a ⭐⭐⭐⭐⭐ rating or review on Apple Podcasts.Important Disclosures:All expressions of opinion are subject to change without notice in reaction to shifting market conditions.The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.(0920-0817)

You’ve probably had the annoying experience of going to a store to pick up a few things, only to leave having forgotten at least one of them. That’s likely due to the challenge of holding more than one piece of information in your working memory while you shop, not to mention the effects of time pressure, distraction, and the procedural complexity of a seemingly simple trip to a store.In this episode of Choiceology with Katy Milkman, we look at effective tools for managing complex and time-sensitive procedures, from grocery shopping to space exploration.Fifty years ago, astronauts aboard the Apollo 13 lunar spacecraft radioed Mission Control with the now iconic phrase “Houston, we’ve had a problem.” A critical piece of equipment had exploded, putting the three crew member’s lives in extreme danger. What followed was a monumental problem-solving effort to bring the astronauts safely back to Earth.Historian Andrew Chaikin tells the harrowing story of Apollo 13, based on his interviews with NASA engineers and the Apollo crew. You’ll hear about the incredibly complex and dangerous procedures involved in piloting the hobbled ship and how Mission Control and the crew used a simple tool—the checklist—to help limit potential errors and manage complicated operations.Andrew Chaikin is the author of A Man on The Moon: The Voyages of The Apollo Astronauts.Next, Kirabo Jackson joins Katy to explain his work studying the effectiveness of checklists in a more down-to-earth setting: auto repair shops. You’ll hear how the implementation of checklists improved productivity and increased profits for shop owners. Kirabo Jackson is the Abraham Harris Professor of Education and Social Policy at Northwestern University. You can read more about his work in his research paper with Henry S. Schneider on checklists and worker behavior.Finally, Cass Sunstein discusses with Katy the more general topic of simplification. He explains how checklists and simplified processes can save governments and businesses money and time, as well as significantly increasing citizen participation in programs.Cass Sunstein is the Robert Walmsley University Professor at Harvard Law School. He is also the founder and director of the Program on Behavioral Economics and Public Policy at Harvard Law School, former administrator of the U.S. government’s Office of Information and Regulatory Affairs, and author of many books. His latest book is Too Much Information: Understanding What You Don’t Want to Know.Choiceology is an original podcast from Charles Schwab. For more on the series, visit schwab.com/podcast.If you enjoy the show, please leave a ⭐⭐⭐⭐⭐ rating or review on Apple Podcasts.Important Disclosures:All expressions of opinion are subject to change without notice in reaction to shifting market conditions.The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.(0920-0U2X)

“Mom! Janey got more ice cream than me! Not fair!” For kids—and many adults—the notion of what’s fair or not often involves comparing quantities of some valuable thing. But there’s another, more nuanced concept of fairness that crops up in certain types of negotiations. In this episode of Choiceology with Katy Milkman, we look at what people perceive as fair or not amid changing circumstances.At the turn of the 20th century, professional baseball had entered what came to be known as the dead-ball era. Pitchers had a distinct advantage over batters, resulting in low-scoring games and a substantial drop in attendance. Owners and league officials decided they needed to change some rules to entice fans back to their stadiums. One option on the table was to ban the spitball.John Thorn explains the history of the spitball and other doctored pitches and describes the state of baseball at the time. While empty bleachers were clearly bad for the bottom line, the owners also recognized the problem of implementing a rule change that would likely destroy some pitchers’ careers. You’ll hear about the clever solution that the league arrived at to ensure a more exciting game without alienating their players.John Thorn is the official historian for Major League Baseball and the author of Baseball in the Garden of Eden: The Secret History of the Early Game.Next, Richard Thaler joins Katy to explain his pioneering work with Daniel Kahneman and Jack Knetsch in describing the principle of dual entitlement. You’ll hear about several different scenarios where the phenomenon occurs and how it relates to status quo bias.Richard Thaler is a Nobel Prize-winning economist and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago’s Booth School of Business. He is the author of several books, including Misbehaving: The Making Of Behavioral Economics.Choiceology is an original podcast from Charles Schwab. For more on the series, visit schwab.com/podcast.If you enjoy the show, please leave a ⭐⭐⭐⭐⭐ rating or review on Apple Podcasts.Important Disclosures:All expressions of opinion are subject to change without notice in reaction to shifting market conditions.The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.All corporate names are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.(1020-0XDB)

Traditional economic theory says that more choice should always be better than less. After all, if the cereal aisle has corn flakes, honey nut corn flakes, toasted coconut corn flakes, chocolate corn flakes, multi-grain flakes, and all the rest, you’ll surely be able to find the breakfast carbs that suit your taste buds perfectly. But it turns out that, in certain situations, more choices can be counterproductive.In this episode of Choiceology with Katy Milkman, we look at how having too many options can sometimes produce anxiety, reduce satisfaction, and even lead us to abandon the decision we’d planned to make altogether.You’ll hear from professional bridesmaid (yes, that’s a real thing) Jen Glantz about her experiences supporting brides through the many decisions they face in planning a wedding. Jen has seen it all: the fatigue, the indecision, the anxiety, and the emotional toll that can result from managing myriad choices while planning the big day.Jen, herself, is now engaged to be married. But rather than subject herself to that giant list of wedding day choices, she has come up with a clever plan to offload the decision-making effort.Jen Glantz runs Bridesmaid for Hire and is based in Brooklyn, New York.  Barry Schwartz is an academic authority on this phenomenon. His book The Paradox of Choice challenged traditional economic theory about the utility of ever-expanding options in prosperous societies. Barry joins Katy to explain where choice overload occurs, and where it doesn’t, and to discuss the benefits of satisficing when it comes to choosing televisions or restaurants or blue jeans. Barry Schwartz is the Dorwin P. Cartwright Professor Emeritus of Social Theory and Social Action at Swarthmore College.Choiceology is an original podcast from Charles Schwab. For more on the series, visit schwab.com/podcast.If you enjoy the show, please leave a ⭐⭐⭐⭐⭐ rating or review on Apple Podcasts. Important Disclosures:All expressions of opinion are subject to change without notice in reaction to shifting market conditions.The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.All corporate names are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security.(0820-03K4)

Have you ever bid in a competitive auction—say, on eBay—and won the item, only to see a similar item for sale elsewhere at a lower price? If so, you may have fallen prey to the winner’s curse.In this episode of Choiceology with Katy Milkman, we look at bias that can lead people to overpay in auctions and other types of negotiations.We begin with the story of Havre de Grace. This prize filly had an exceptionally successful career as a racehorse before being auctioned as a broodmare. Expectations were high for the sale because Havre de Grace had such a strong thoroughbred pedigree. But the way the auction proceeded surprised everyone in the room.Glenye Cain Oakford was at the Fasig-Tipton November Mixed Sale and paints a vivid picture of a dramatic bidding process. She is an award-winning journalist, writer, and videographer based in Lexington, Kentucky. She was the senior bloodstock correspondent at the Daily Racing Form at the time of the auctionSpecial thanks to Fasig-Tipton for use of the audio clips from the Havre de Grace auction.Max Bazerman has contributed important research to the study of the winner’s curse. He joins Katy to discuss the ways in which this phenomenon can affect purchasing decisions around everything from jewelry to oil leases—and how the bias can diminish your ability to negotiate successfully. Max Bazerman is the Jesse Isidor Straus Professor of Business at the Harvard Business School and the Harvard Kennedy School and the author of many books, including the upcoming book Better, Not Perfect: The Realist’s Guide to Maximum Sustainable Goodness, which will be released later this year by Harper Collins. Choiceology is an original podcast from Charles Schwab. For more on the series, visit schwab.com/podcast.If you enjoy the show, please leave a ⭐⭐⭐⭐⭐ rating or review on Apple Podcasts.Important Disclosures:All expressions of opinion are subject to change without notice in reaction to shifting market conditions.The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.(0520-0BPD)

Have you ever purchased a car or a motorcycle or a boat, based on some particular quality it had that made you fall in love? Maybe it was candy apple red. Maybe it had sleek lines. Maybe the engine made a pleasing purr. Hopefully that decision was a happy one. But what happens when the red sports car spends most of its time in the shop? Or the sleek motorbike is hard on your back? Or the purring boat engine is a gas-guzzler?In this episode of Choiceology with Katy Milkman, we look at how our preferences tend to shift when we evaluate a choice on its own versus side-by-side with other possible options.The episode begins with Vivienne Wagner and her family’s decision to adopt an adorable puppy after seeing a popular movie that featured the breed. (You know, the spotty dogs—over a hundred of them.) It’s a cautionary tale about a lovable but incredibly difficult pooch named Barkley and the perils of selecting a family pet in a vacuum. Max Bazerman is an authority on the phenomenon of shifting preferences when decisions are made separately or jointly. He joins Katy to discuss the ways in which our evaluation tendencies can impact activities ranging from hiring an employee to communicating with a spouse. He also discusses strategies to be more deliberative while making important decisions.Max Bazerman is the Jesse Isidor Straus Professor of Business at the Harvard Business School and the Harvard Kennedy School and the author of many books, including, most recently, The Power of Experiments: Decision-Making in a Data-Driven World with Mike Luca.Choiceology is an original podcast from Charles Schwab. For more on the series, visit schwab.com/podcast.If you enjoy the show, please leave a ⭐⭐⭐⭐⭐ rating or review on Apple Podcasts.Important Disclosures:All expressions of opinion are subject to change without notice in reaction to shifting market conditions.The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.(0420-0A3H)

If you’ve ever signed up for a frequent flyer program, chances are good that you were awarded a certain number of bonus points to start. Those bonus points feel like a nice little gift, but they also serve another purpose: to increase your motivation to participate in the program.In this episode of Choiceology with Katy Milkman, we explore how your proximity to a goal can affect the way you behave.You’ll hear the fascinating story of Brian Zinn and his decade-spanning quest to unravel an elaborate riddle. When Brian was a college student, he stumbled upon a book called The Secret: A Treasure Hunt. In it were 12 cryptic puzzles—arcane verses and mysterious images that, when paired and solved, would point readers to 12 treasures buried in undisclosed locations around the United States.The treasure hunt was a harmless pastime during Brian’s college days, but when he rediscovered the book years later, it became something of an obsession. You’ll learn about his escalating adventures attempting to locate one of the book’s hidden treasures. Since the publication of The Secret nearly 40 years ago, only three of the 12 treasures have ever been found.Next, Oleg Urminsky joins Katy to reveal the behavioral mechanisms that drive us to increase our efforts as we approach a goal, or perceive that we’re approaching a goal. Urminsky’s research led him to demonstrate surprising shifts in behavior using a simple coffee card loyalty program. Oleg Urminsky is a professor of marketing at the University of Chicago Booth School of Business. You can read more about his research in the 2006 paper “The Goal-Gradient Hypothesis Resurrected.” Choiceology is an original podcast from Charles Schwab. For more on the series, visit schwab.com/podcast.If you enjoy the show, please leave a ⭐⭐⭐⭐⭐ rating or review on Apple Podcasts.Important Disclosures:All expressions of opinion are subject to change without notice in reaction to shifting market conditions.The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.(0420-08H4)

An unprecedented global health crisis has overwhelmed healthcare systems, disrupted economies and financial markets, and radically altered our daily lives. And while social distancing is the responsible thing to do to slow the spread of disease, it also heightens the emotional challenges we face during these scary and uncertain times.In this special bonus episode of Choiceology with Katy Milkman, we look to the science of happiness to see how we might mitigate the adverse impacts to our mental health and well-being—and maybe even cultivate good new habits that can help us when the crisis is over.In 2018, psychologist Laurie Santos introduced a new course at Yale—its subject, happiness—which quickly became the storied university’s most popular class ever. Katy interviews Laurie to find out what insights from the course apply to our current situation and to solicit advice on happiness-improvement steps we can be taking now.Laurie Santos is a professor of psychology and head of Silliman College at Yale University. A version of her “happiness class”—The Science of Well-Being—is now available online for free through Coursera. Laurie also hosts the hit podcast The Happiness Lab.  Choiceology is an original podcast from Charles Schwab. For more on the series, visit schwab.com/podcast. Schwab also has resources to help you make sense of the pandemic’s impact on your finances at schwab.com/volatility, including FAQs and strategies for long-term investors and people nearing or in retirement.If you enjoy the show, please leave a ⭐⭐⭐⭐⭐ rating or review on Apple Podcasts.Important Disclosures:All expressions of opinion are subject to change without notice in reaction to shifting market conditions.The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.Dr. Laurie Santos and The Happiness Lab are not affiliated with Schwab and the views expressed may not necessarily reflect those of The Charles Schwab Corporation or its affiliates.(0420-068J)