416: How to Find Insights Others Miss with Steven Landsburg

By March 22, 2019Podcasts

 

 

Steven Landsburg says: "The world is full of people doing things that I don't understand... train yourself to stop and ask yourself why they're doing those things."

Economist Steven Landsburg offers key questions to push your thinking beyond the obvious to generate helpful insights.

You’ll Learn:

  1. How to jog your brain out of complacent thinking
  2. A common assumption that often leads people to make poor decisions
  3. Two exercises to help expand your thinking beyond the obvious

About Steven

Steven E. Landsburg is a Professor of Economics at the University of Rochester, where students recently elected him Professor of the Year. He is the author of The Armchair EconomistFair PlayThe Big Questions, two textbooks in economics, and much more. His current research is in the area of quantum game theory. He writes the monthly “Everyday Economics” column in Slate magazine, and has written regularly for Forbes and occasionally for the New York Times, the Wall Street Journal and the Washington Post. He appeared as a commentator on the PBS/Turner Broadcasting series “Damn Right”, and has made over 200 appearances on radio and television broadcasts over the past few years.

Items Mentioned in this Show:

Steven Landsburg Interview Transcript

Pete Mockaitis
Steven, thanks so much for joining us here on the How to be Awesome at Your Job Podcast.

Steven Landsburg
Thank you so much for having me here.

Pete Mockaitis
Well, I’m excited to dig into your wisdom and to learn about your skills with aerial silks. What’s this about?

Steven Landsburg
Well, that’s a little bit off the topic I thought we’d be talking about, but I’m happy to talk about it.

Pete Mockaitis
Well, yeah, let’s warm it up a little.

Steven Landsburg
Aerial silks is like what you see in Cirque du Soleil where you’ve got a long piece of fabric hanging typically 24 feet from the ceiling, and a performer will climb on the fabric, and you wrap your body in various ways so that when you let go you fall almost to the floor, but the fabric catches you before you actually land.

Pete Mockaitis
And the crowd gasps.

Steven Landsburg
And the crowd gasps. I’m not quite as good at it as those performers you see in Cirque du Soleil, but I’ve been doing it for some years. It’s my hobby. It’s what I do in the evenings. I enjoy it a lot.

Pete Mockaitis
That is so fascinating. You’re an economics professor, and this is what you do for kicks.

Steven Landsburg
It’s a good workout. It’s less boring than most of the other things I used to do to workout, and it’s fun.

Pete Mockaitis
I guess I just wonder like where do you sign up for that? Do you see a flyer, you’re like, “Oh, cool. I’ll give this a shot.” How does one begin?

Steven Landsburg
I got into it because I’ve got a lot of friends, as it happens in Boston, who all simultaneously got excited about this at the same time, and there was a place for them to go take lessons in Boston. I live in Rochester, New York. There was no place here, so I used to do it from time to time when I visited my Boston friends. But then I was very excited after a couple of years of that when the studio finally opened up in Rochester, and I went and took a lesson. It turned out the instructors were fantastic, so I’ve been going ever since.

Pete Mockaitis
That’s great. I can’t come up with a brilliant segue way on the spot. We’re going to talk about mental acrobatics now. In your book, Can You Outsmart an Economist, you lay out a 100 puzzles, not just for funsies, but rather with the particular goal of training the brain to think and operate better. That sounds so cool. I’d love it if you could kick us off by sharing maybe one of the most surprising and fascinating insights you’ve gleaned from us humans and our thought processes from this puzzle creation and working process.

Steven Landsburg
Well, it’s all about thinking beyond the obvious, and it’s all about looking at human behavior that you might be inclined to dismiss as just irrational or pointless and thinking a little deeper and asking yourself, “Why are people behaving the way they’re behaving?” Try to put yourself in those shoes, try to see what kind of incentives they were facing, and try to figure out what’s really going on.

Steven Landsburg
Here’s an example. I’m a college teacher. At the end of every semester my students fill out these evaluation forms to say how they liked me, and every college teacher in the country faces the same thing.

Pete Mockaitis
And every year you nail it.

Steven Landsburg
I do pretty well actually. I’m happy to say I do pretty well. But there is very strong statistical evidence that physically beautiful teachers do better on those forms than other teachers who appear to be equally well-qualified, equally good. Systematically, the most beautiful teachers do best on these things.

Pete Mockaitis
So, now we see why you do pretty well on these. Steven, huh?

Steven Landsburg
I’m afraid I do well on these despite [crosstalk 00:03:38]. But the question is, why are students so consistently favoring the most physically beautiful professors? Now, the simple, straightforward, obvious answer is that students are a little bit shallow, and like everybody else, they are swayed by things that aren’t actually relevant, and so they’re making evaluations that are not really accurate evaluations of the teaching quality. They’re letting all sorts of other things influence them.

That’s the obvious explanation, but I think it’s the wrong explanation. I believe what’s really going in is this. Beautiful people have a lot of job opportunities that other people don’t have. Not just in modeling, not just in the movies, but in retail, in sales beauty helps in anything where you have to deal with the public. A beautiful person who chose to be a college teacher, on average, is going to be a person who gave up a lot of other opportunities in order to be a college teacher. On average, that’s going to be somebody who’s enthusiastic about college teaching and is probably pretty good at it.

On the other hand, and again speaking about broad averages here, people who are less attractive had fewer other opportunities. Maybe some of them went into college teaching because it was the only thing available to them. You would expect in any occupation, even an occupation where physical beauty doesn’t matter—especially in an occupation where physical beauty doesn’t matter—if beautiful people go into that occupation, on average they’re going to be the best because they’re the ones who gave up the most in order to go there.

As I say in the book, if you show me a lighthouse keeper with movie star good looks, I’m going to show you the world’s best lighthouse keeper because if he gave up a career in Hollywood to keep that lighthouse, he must really love lighthouse keeping. The whole idea of the book, Can You Outsmart an Economist, is to think one step deeper like that about all of the various little and big mysterious things that we see as we go through life.

Pete Mockaitis
Steven, you’ve really got me hooked and intrigued by the particular example with the beautiful professors. I think it was the Rate My Professor with the chili peppers, you know, the chili pepper havers. That seems like a very plausible hypothesis.

Steven Landsburg
Sure.

Pete Mockaitis
That could add up and explain things and make some sense. Now I’m wondering, “Hey, is it true?” I guess the way we’d maybe test that would be you have to have almost actors with the same mannerisms and vocal inflection, maybe even lip-syncing an audio.

Steven Landsburg
I cannot prove to you that this is true. As I say in the book, there are a number of puzzles here where I don’t know for sure that I have the right answer, but I think I have an answer that’s got a pretty good chance of being right and a good reason why it’s got a pretty good chance of being right. For goodness’ sake, the message is not that you should just believe me. The message is that you should try to think the same way and try to find some other explanations. Can I give you another example of the same sort of thing?

Pete Mockaitis
Oh, sure thing. Yes. Maybe just one more tidbit on that first.

Steven Landsburg
Sure.

Pete Mockaitis
You’re right. What’s fun about it is, you’re right, we may not know it to be true, but it is teeing up a great extra question or piece of research, and I think it’s just keeping me a little bit more just mentally limber in the sense of now I’m a lot more fascinated by this question than I was beforehand, and I figure we’ve got one fine hypothesis which can very well spark additional hypotheses and in so doing, I’m just doing better thinking.

Steven Landsburg
Yes, absolutely. But there is evidence for very similar phenomena. For example, barbers. Barbers today are about exactly as productive as they were 200 years ago. It takes just as long to cut somebody’s hair now as it did 200 years ago. The equipment hasn’t gotten all that better. Nothing has changed in terms of the productivity, and yet the wages of a barber today compared to 200 years ago are 25-35 times as much. Why did that happen?

Pete Mockaitis
This is adjusted for inflation?

Steven Landsburg
After adjusting for inflation. Yes, of course. The real purchasing power of the wages is 30-35 times as much as it used to be. Why did that happen? The answer most economists believe, and we do have a lot of evidence on this, is that 200 years ago, a lot of people became barbers because there was nothing else to do. Today, people who become barbers have a lot of alternative, possible occupations. There are so many other things you can do which have gotten more productive: factory work, being a tailor, anything like that.

Steven Landsburg
The machines are so much better now. Everybody is so much more productive, and so those occupations have drawn a lot of barbers away into those other fields where there’s greater opportunity. The remaining barbers face less competition and therefore command higher wages. So as long as wages go up in some industries, that pulls up wages in the other industries even where no productivity change has happened. It does it by pulling people out of that occupation, making less competition and driving the wages up.

Pete Mockaitis
It’s also interesting that I think of barbers nowadays as like a specialty like, “If you just need your haircut, you go over to Great Clips or wherever and fork over just a few bucks.” Whereas a barber, oh boy, they’re going to get a fancy brush, and they’re going to put some foamy gel or foamy shave cream on your neck and use a straight blade. That’s the barbers I love to go to. I don’t know if barbers back in the day were more sort of commonplace with regard to, “Yeah, this is where you go for your haircut.”

Steven Landsburg
But even the guy at Great Clips today is earning 35 times what [crosstalk 00:10:05] 200 years ago.

Pete Mockaitis
No offense to the Great Clips listeners out there. But there’s the branding. It’s kind of value-oriented. It’s there. Intriguing. We’re looking beyond the obvious and practice how do we get into that habit? Are there key questions that you ask yourself? One of them was just about thinking about the incentives or underlying things. How else do you kind of jog the brain out of just complacently taking the obvious approach?

Steven Landsburg
A lot of it is thinking about incentives. A lot of it, of course, is just practice. You train yourself to think this way all the time. The world is full of little mysteries. You look around, and you train, analyze. The world is full of people doing things that I don’t understand and you train yourself to stop and ask yourself why they’re doing those things.

I’ll have more examples of that sort of thing for you later on if you want them. But in another direction, another thing I touch on a lot in the book is not taking statistics at face value but looking a little bit deeper, looking at what underlies the numbers that seem to tell a story sometimes, but when you look a little deeper they’re telling a very different story.

For example, at the University of California at Berkeley some years ago somebody noticed that the admission rate for graduate programs for male applicants was about three times as great as for female applicants even when they were equally qualified. A man applying to graduate school at Berkeley and an equally qualified woman applying to graduate school at Berkeley, the man had three times greater chance of being accepted.

You look at that statistic and you say, “Wow, that looks like discrimination.” A lot of lawyers took that seriously. They took it so seriously that the university ended up being sued for discrimination. This case ended up in court. The case fell apart when somebody noticed that the discrepancy was entirely accounted for by the fact that for some reason, at that time and place, women were consistently applying to the most selective programs and men to the least selective programs.

I’m making this up. I don’t know that it was the law school and the medical school. But the law school, let’s say, accepts almost everyone who applies, male or female. The medical school takes a tiny fraction of those who apply, male or female. They both treat everybody equally, but for some reason, men tend to apply to the law school, women tend to apply to the medical school. That’s going to cause men to be mostly accepted and women to be mostly rejected even though there is absolutely no discrimination going on.

Sometimes there is real discrimination, but in the case of Berkeley there was clearly not. Once you look at the numbers carefully, there was clearly not. The case was thrown out of court as soon as somebody realized this. However, before, a lot of lawyers made a lot of money.

Pete Mockaitis
Right. That is intriguing. I find that’s often the case with … Hey, I’ve just done this recently with my podcast data. I’ve got some Apple engagement data which will tell me what is the average proportion of an episode that gets listened to. But that is by no means a fair indicator of which episodes are the most engaging because some of my episodes are much longer than others.

Steven Landsburg
There you go.

Pete Mockaitis
So, I actually went to great lengths to come up with a fairer comparison point, which was, what percentage of listeners got to minute 25? It’s kind of what I’m using, so it’s like whether the episode was 33 minutes or 54 minutes. It’s fair enough to see was it interesting enough for you to hang out for 25 minutes?

Steven Landsburg
That sounds just right to me.

Pete Mockaitis
Well, thank you.

Steven Landsburg
I’m glad you’re doing that.

Pete Mockaitis
Likewise, with download numbers with regard to, “Hey, what are the most downloaded episodes ever?” It’s like, “Well, some of the episodes have been around longer.” They’ve had more opportunity to be downloaded, and some of them appeared during hotter streaks in which there were more total listeners listening to everything. I’ve chosen to index them to the recent episodes. But anyway, I’m right with you. Sometimes you got to dig deeper than the data on the surface.

Steven Landsburg
I won’t go into the details because I think you need a piece of paper in front of you with some numbers on it. But equally well, there are cases where you can look at statistics that seem to be clearly showing that there is no discrimination whereas, in fact, there is a lot of discrimination underlying the numbers. Again, I’ll give you some examples in the book. The numbers can fool you in either direction.

Pete Mockaitis
Oh, that’s interesting. Could you maybe walk us through some particular categories of bias or things that you’re seeing again, and again and again that can lead us to some optimal decisions?

Again, there’s the statistical stuff. There is a chapter. Again, I would hesitate to try and give these examples on the air because they involve a few numbers, and I think it helps a lot to see the numbers on the page in front of you. But there are examples in the book of simple little games that you can play where you’ve got a choice of what kind of prizes you want to be eligible for, and you can decide whether you want to play for these prizes, or decide whether you want to play for those prizes, play the game, see how things turn out.

Consistently, people prefer certain sets of prizes to others in these games. They prefer playing certain ways to playing other ways. If you allow them to play the way that the majority of people choose to play, the combination of games that they’re playing guarantees, absolutely guarantees, that at the end of the day they will lose money. They are making choices that guarantees that they will lose more money in the games they lose than they will in the games they win.

Those are the choices people instinctively make. Clearly, those are not good choices to be making. I think we can learn a little from that about how we should be more careful about the choices that we instinctively make.

Pete Mockaitis
You say we prefer certain ways. Are there a couple of summary principles that point to the nature of our instinctive preferences that can serve optimally?

Steven Landsburg
For one thing, we’re often too quick to suppose that other people are behaving irrationality when in fact they’re behaving very purposefully in ways that we don’t understand. I recently bought a Sony television set. I was surprised to discover that it’s absolutely exactly the same price no matter where I shop. I can go to Best Buy, I can go to a discounter, I can go to the internet. It’s exactly the same price everywhere except from a couple of places on the internet that are pretty skeevy-looking and where it’s pretty clear you’re never going to get your television set.

But it’s the exact same price everywhere and it turns out that the reason for that is that Sony requires all of their retailers to charge the same price. At first that might look like Sony is trying to keep the price up, but you think about that and it doesn’t actually make any sense because Sony doesn’t care about the retail price. They care about the wholesale price, and they have total control over the wholesale price. They sell the television set for $1,000 to the retailers. Why should they care whether the retailer resells it for 1,200, or 1,500, or 2,000?

It looks like Sony is just being irrational there. A person might be tempted to say, “Boy, Sony hasn’t really thought this through.” But, you know, Sony is in this business. They thought it through. You’ve got assume that they’ve thought this through, and there is a good reason for it. It turns out that the good reason is this: what they’re trying to combat is people like me, who, if the price were different at different places, I would go to Best Buy where they’ve got fantastic customer service, they’ve got all the models on the wall, they’ll talk to me for two hours about the pros and cons of the different models, and then I’ll go across town to the discounter and buy it cheaper.

The problem with that is if enough people do that, Best Buy will stop carrying the television sets, and Sony does not want that. So they’re requiring the discounter to keep the price up not because they care about the retail price, but because they care about the discounter stealing customers from Best Buy and giving Best Buy an incentive to stop offering that customer service. They care about the customer service because that makes people more likely to buy Sony.

Again, if you look at something somebody is doing, it doesn’t seem to make sense. Sometimes we have an instinct to say, “Wow, they never thought that through,” but usually, they have thought it through if it’s something that’s important to them, and then you can learn something by thinking a little deeper about why they’re doing what they’re doing.

Pete Mockaitis
It’s interesting. To go maybe meta there for a moment, we’re too quick to assume and suppose that others are behaving irrationally. I suppose that is adaptive for us because it’s just easier. There’s less energy required from our brains to be like, “Huh, that was stupid of them,” as opposed to really thinking, “Hmm, what was behind that? What could they be benefiting? What are the implications?” That’s a lot more work.

Steven Landsburg
Sure. Part of my message is that that work can be a lot of fun. People like solving puzzles. People enjoy crossword puzzles, they enjoy Sudokus, they enjoy brain teasers. You can harness that love of doing puzzles to doing this kind of puzzle. I think it does make you a little more insightful. It is a little more work, but there’s no reason that that work can’t be a lot fun.

Pete Mockaitis
Let’s say that you’re at work and a puzzle presents itself. I guess I have to make an example, so we can get kind of concrete. But I want to hear your steps, or approaches or what you do for a second and a third. So let’s just say we are thinking, “You know, we’re having all of these dissatisfied customer service calls. They call and they’re not pleased with what has happened on the other end of the line. We want to fix that.” How would you begin to disentangle this and solve the puzzle?

Steven Landsburg
That’s such a broad question. It’s a little hard to answer without knowing more about the nature of the business and exactly what’s coming in on the calls. I guess I would start with listen to what they’re saying, and engage with them, ask some follow-up questions, and don’t jump to the conclusion that you understand exactly what they’re upset about. Sometimes, especially when people are upset, they’re not so good at articulating what the problem is, and so you got to slow them down and try to pin them down on the details of exactly what has made them unhappy and what could have made them happier.

Beyond that, I think so much depends on exactly all of the details that you didn’t give me in this hypothetical story, but starting by listening to people is probably always the right place.

Pete Mockaitis
I’d love to get your take when it comes to the asking and the listening. You’re right. Sometimes you don’t quite get what you want. I’m thinking about entrepreneurs who ask, “Hey, would you buy this at $20 a unit?” And people say, “Absolutely.” They say, “Well, great. I’ve got some in my car right now.” He’s like, “Oh, never mind.” What we ask of people is often not reflective of their true behaviors. Any ways around that?

Steven Landsburg
Always be trying to look beyond the obvious. What are the incentives that are driving the way people are behaving? In your case, of course, people are saying yes probably because it’s the easiest to get you to shut up.

If you stop and think about what they’re trying to accomplish, what you’re hoping they’re trying to accomplish is to give you accurate information, but they’re not interested in whether you have accurate information. They’re interested in moving onto something they find a little more interesting. Just having that level of insight into what other people are trying to accomplish will help you interpret what they’re telling you.

Pete Mockaitis
Very much. I think about that with regard to surveys where your answer could make you look bad in terms of, “Yes, of course, I recycle always,” because to admit aloud is probably even harder to do than, say, an anonymous survey that you don’t recycle, or you recycle very rarely when it’s only super convenient for you or whatever the thing may be. The incentive at play here is just not feeling like a jerk or a loser.

Steven Landsburg
Yeah, absolutely.

Pete Mockaitis
So—
Go ahead.

Steven Landsburg
No, go on.

Pete Mockaitis
So then you got a bunch of puzzles in your book. I’d love it if you were so kind as to spare us from those. That would be kind of too complex without the visual aid to work with, but could you perhaps share one that we can work with auditorily alone that you think offers some pretty substantial mental expansion when you work through it?

Steven Landsburg
Okay, here’s one from the political world. Coal miners get a lot of attention from politicians. There’s a lot of pressure to make life better for coal miners to keep their wages up, to keep their working conditions better. Fast food cooks are far more numerous than coal miners. You don’t see any of that with the fast food cooks. Politicians they campaign in West Virginia, they make promises for what they’re going to do for the coal miners. We don’t see any of that for so many other unskilled occupations, which have many, many more people in them.

What is it about the coal miners that causes them to get all this attention that the other people don’t get? The answer to that question-

Pete Mockaitis
Can I try?

Steven Landsburg
Go ahead. Yeah, absolutely.

Pete Mockaitis
My guess is that if you think about incentives, the politicians are receiving some election campaign money from energy companies that have a vested interest in coal being alive and well and flourishing.

Steven Landsburg
Why do they get that from the coal companies and not, say, from the restaurants?

Pete Mockaitis
Yeah, that’s another layer.

Steven Landsburg
Why are the coal companies putting all that pressure on them to say, “Take care of our employees,” and the restaurants not putting all that pressure on them?

Pete Mockaitis
My knee-jerk reaction is that the fast food companies have plans to automate away many of their workers as soon as possible as I’m seeing with the McDonald’s order kiosk, but there could be any number of factors.

Steven Landsburg
This has been going on for decades, and decades and decades. The answer that most economists will give you and that I absolutely believe is the correct one is this. If politicians respond to the needs of coal companies, coal companies will benefit. If politicians help fulfill the needs of the restaurants, what will happen is new restaurants will open to take advantage of that. It’s much easier to open a new restaurant than to open a new coal mine. There’s a limited amount of places where you can open a coal mine. The coal mines are already there.

If we make life better for the coal miners and the people who employ the coal miners, the people in the coal mines will benefit. If we make life better for the restaurants and the people who are employed by the restaurants, new restaurants will spring up to take advantage of that and the benefits will be dissipated. They will spread out until the new restaurants will drive down prices of the old restaurants to the point where the old restaurants don’t benefit much anyway and therefore they don’t bother lobbying for these favors. They don’t bother lobbying for things that new entrants can come along and take a share of.

This is the same reason why all around the world, farmers get all kinds of largess from government whereas, motels, for example, do not. Farmers find it worthwhile to lobby for government favors because there’s a limited amount of farm land. They don’t have to worry about new farms cropping up in the middle of New York City. If you treat the motels well politically, new motels will open up. The old motels will suffer from the new competition almost as much as they benefit from the government benefits.

All around the world in all times what we see is that government largess is directed towards those industries that it is difficult to enter and not to the industries that it’s easy to enter. There are strong patterns of that all over the place. What we see follows those patterns just as theory predicts that it would.

Pete Mockaitis
That is thought-provoking. Hopefully, not disheartening.
I was listening to this podcast which was just an audiobook called The United States is Lesterland. It was all about the people who donate to campaigns. Apparently, there’s approximate the same number of people who donate to campaigns as there are people named Lester in the US. That was the analogy, and it kind of got you thinking about the incentives and how they’re aligned. It did make you feel so great in terms of government “by the people, for the people” kind of a way.

Steven Landsburg
Shall I go onto another example?

Pete Mockaitis
Let’s do it. That’s good.

Steven Landsburg
Sure.

Pete Mockaitis
We were thinking about incentives and the next layers of incentives. Let’s do it.

Steven Landsburg
Let’s move away from politics and go to something much more within the family. All over the world there are cultures where for one reason or another we have a lot of evidence parents prefer sons to daughters overwhelmingly in some places.

Pete Mockaitis
We just had a daughter, and we think she’s wonderful for the record.

Steven Landsburg
I have got my one child as a daughter. I always wanted a daughter. It was perfect. But there are many places around the world where there is an overwhelming preference for sons. What would you expect then at the adoption agencies in those places if you go to those places where people are striving for sons? When you go to the adoption agencies, who do you think gets adopted more easily, the boys or the girls?

If you didn’t think very deeply, you would expect it to be the boys. That’s what people want. They’ll go to the adoption agencies, they’ll ask for boys. The opposite is true. At the adoption agencies and those places they ask for girls. The more the boys are preferred in those cultures, the more it’s the girls who are most easily placed by the adoption agencies. What’s the reason for that?

Again, it kind of looks crazy on the surface, but if you think about the incentives people are facing, it’s pretty clear in a place where people really want boys, they will sometimes take a perfectly healthy, perfectly functioning, intelligent, cheerful girl-child, and put her up for adoption just because they don’t want a girl. It’s a very sad thing, but it happens.

Boys tend to get sent to the adoption agency only if there’s something really wrong with them behaviorally, or if they’ve got an illness or something like that. When you go to that adoption agency, you look at the kids and maybe you can’t see for sure, but if you live in that culture, you’re pretty aware going in that a lot of the boys in that agency are going to be there because they were problem children. A lot of the girls in that agency are going to be there just because they’re girls.

Even if you prefer a boy, you don’t want a problem child. You may prefer a healthy well-behaved girl to an unhealthy ill-behaved boy, even if you prefer boys. Going into the agency, you know statistically what you’re most likely to find there, and so you turn immediately to the girls.

Pete Mockaitis
Is there a name for that phenomenon? There’s a reversal based upon the reaction to the incentives. There’s got to be [crosstalk 00:32:52] name for that.

Steven Landsburg
There ought to be a name for that, isn’t there? I don’t know.

Pete Mockaitis
Because I’ve heard this sort of a thing in a number of different scenarios. Well, maybe that will be your legacy, Steven.

Steven Landsburg
I’ll work on it. I don’t know.

Pete Mockaitis
No pressure.

Steven Landsburg
But again, the idea is that you see people behaving in a way you don’t quite understand, and you think a little deeper about it, and then you do understand it. It’s fun to understand things. It works not just for people but for animals. What happens if you take a big strong pig and a little weak pig and you put them in a box and you make them compete for food?

Now, economists thought about this question and made a prediction, and then the biologists did us the favor of actually taking a big strong pig and a little weak pig and putting them in a box and letting them compete for food.

Pete Mockaitis
Because they’re macabre, these biologists.

Steven Landsburg
The pigs behave exactly as the economists would predict, which might not be the way that everyone would predict. In fact, it’s the little pig who eats better, and here’s why. The little pig gets most of the food. The box is set up so there’s a food bowl at one end and a lever at the other. You got to push the lever to make the bowl fill up with food.

The little pig has absolutely no incentive to push that lever because if the little pig pushes the lever the big pig will grab all of the food. He’ll push the little pig. The little pig will come down to the bowl. The big pig will already be there and will push him aside. He will eat 100% of the food. Because of that, the little pig quickly figures out there’s no point in pushing that lever.

If the big pig pushes the lever, here’s what happens. The little pig waits by the bowl and eats most of the food before the big pig can get down there. The big pig pushes the lever and then comes running the length of the box. Once the big pig gets there, he pushes the little pig out of the way and gets the dregs, gets the little bit of food that’s left just enough to give him an incentive to keep pushing that lever.

The little pig eats most of the food. The big pig does all the work, and again, it’s perhaps the opposite of what you would have expected at first, but it’s exactly what you would expect if you took the time to think through the incentives, and it’s also exactly what actually happens in the real world.

Pete Mockaitis
That set up that totally makes sense. I guess if there was just food in the middle and there’s a free-for-all, then—

Steven Landsburg
Then the big pig would get it all.

Pete Mockaitis
It’s just sort of simple kind of pushing around factors. Steven, tell me, anything else you want to make sure to mention before we shift gears and hear some of your favorite things?

Steven Landsburg
Well, I certainly want to mention that if anybody is intrigued by some of these examples and wants to see more, they can go to outsmartaneconomist.com. It’s all one word, outsmartaneconomist.com. They can read the first chapter of this book for free, read some reviews, and get some information on how to order the book. If you are intrigued or think you might be intrigued, go to outsmartaneconomist.com and read the first chapter and see if you like it.

Pete Mockaitis
Okay, sure thing. Now could you share with us a favorite quote that you find inspiring?

Steven Landsburg
A favorite quote. I’m going to go with ‘Look beyond the obvious.’ I think that’s the quote that is most appropriate to what we’ve been talking about here. Always look beyond the obvious.

Pete Mockaitis
And how about a favorite study, or experiment, or a bit of research?

Steven Landsburg
All these little stories you can tell about the way people behave and the studies that point to intriguing unusual little bits of behavior that then we can try to explain. Again, I like to look at those many, many small things rather than trying to point to one big thing.

Pete Mockaitis
All right, and how about a favorite book?

Steven Landsburg
A favorite book in any area?

Pete Mockaitis
Right?

Steven Landsburg
Let’s see. Well, I’ve just finished reading a couple of these books by Steven Pinker, the evolutionary psychologist and linguist. I find them very insightful. He thinks a lot about human behavior. He thinks a lot about what’s going on a little deeper than many people do. He’s not an economist, but he is looking at the same kinds of questions people look at; why do people behave the way they do? What underlies a lot of apparently irrational behavior? How do we explain that behavior as actually being in the best interests of the people who are behaving that way?

Steven Landsburg
The one book of his that stands out to me is called The Blank Slate. I certainly recommend that one. There are so many good books in economics. There’s a textbook by Armen Alchian and William Allen called Exchange and Production. I expect that title sounds pretty boring, but it’s actually an extremely lively book and a wonderful book to learn fantastic amounts of economics with very little formalism, very little mathematics. Just a lot of storytelling but wonderful stories. That’s another book I would encourage everyone to get a hold of.

Pete Mockaitis
And how about a favorite tool? Something that helps you be awesome at your job.

Steven Landsburg
My computer, without a doubt. I’m never without it.

Pete Mockaitis
And a favorite habit?

Steven Landsburg
A favorite habit. I guess I have a favorite/unfavorite habit of doing that half-hour on the treadmill every morning no matter what. I hate it, but I am very happy with the fact that I have cultivated that habit. I don’t let myself miss it. I hope it’s doing some good for my health. God knows there could be a study coming out tomorrow showing just the opposite, but as far as I know it’s good.

Steven Landsburg
I think cultivating the habit of doing things that are really good for you, even when you don’t want to do them, is probably a good amount of habit.

Pete Mockaitis
Is there a particular nugget that you share that really seems to connect and resonate with readers?

Steven Landsburg
That thinking is fun. Thinking a little more deeply about things not only does it make you more able to cope with the world, not only does it make you more able to make decisions better and understand other people’s decisions and interact with other people in politics, in markets, in the family, but the main the reason to think deeply about things is that you have a lot of fun along the way.

Pete Mockaitis
And your final challenge or call-to-action for folks seeking to be awesome at their jobs?

Steven Landsburg
Buy my book.
Pete Mockaitis
Okay, right on. Steven, thanks so much and good luck to you.

Steven Landsburg
Thank you very much.

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