 Huge welcome to Professor Eric Johnson, absolute legend in the behavioural science world, incredible author and all-round gentleman and wonderful human. I could try and do an introduction but I'll probably fail miserably so if it's okay, Sir Eric, would it be okay to introduce yourself a little bit and share how wonderful you are? Obviously you don't want modest to be one of the virtues I'm going to talk about. So I'm a psychologist by training and I've been teaching in business schools and working with people and companies and governments for the last 35 years. And it turns out there's a name for what I do and it's sort of looking at choice architecture and that has been a ton of fun. The basic idea is that you actually can change the environment where people make choices and that will change their behaviour. And I didn't know I was doing this so when I started a long time ago we looked at these things and said oh these are amazing human tricks, framing. Look people will choose this or you frame it this way or that, choose other ways. Then all of a sudden sometime in the last 15 years people decide you know this is actually something we can use for good. We can help people make better choices by presenting them with choices in a way that will help them do what they would want to do if they really had the time and energy to think about it. So as a psychologist I've always been interested in application and thus in part being in the business school. You know I do theoretical work as well but you know the exciting thing is to actually figure out how you can maybe help make the world a better place. It's incredible and your most recent book The Elements of Choice I saw Danny Kahneman described it as indispensable which is a pretty good recommendation. But what I love about it is it seems like as you were saying you work at the business school and a lot of it is how this can practically be applied in real life and in everyday life. As I guess most of us don't realise is we make millions of choices every day and don't realise that someone has designed a lot of them. But yeah I mean I wonder what are some of the best examples that you've come across so far. So you hit on a really important point which is that we're not aware that other people could be influencing us or even more importantly that we can influence other people. So a very simple example from real life was a president of a foundation who was I had a nice writing fellowship there for a few years. He says oh I know what you guys are doing I do this all the time with my three year old daughter. We have a big fight when I ask her does she want to go to bed. Now what I figured out is I just say do you want to fly into bed or do you want to bounce into bed. No more fights. Brilliant. And you know that was an early example but it sort of gets you along the way of saying gee how you pose choices actually can influence what gets chosen. That's absolutely incredible. I love it and I think I saw it might have actually been in your nudge stop talk that you showed back in the day I was a pilot and I think you showed a cockpit. I mean there's tons of design and architecture that goes on there. I can't remember what was the reason you were showing that again. I should have shown it more clearly. Here's here's the thing the thing about most design for choices is tap hazard we don't know we're doing anything so we have some programmer decides let's put this button there. Let's sort by price whatever and we can talk about examples of that in business. But the one thing that really appealed to me about cockpit design is that that actually is a science. People sit there with pilots and actually say what's the right place to put various gauges and various buttons. They put people in a flight simulator with a proposed cockpit design and see if they crash Charles de Gaulle. And if they don't they are they say let's go to Tito Barrow and see if they crash there and let's go to CTAC and see if they crash there. So what you end up with is a scientifically designed selection of what gauges and indicators are there that it's proven to produce good outcomes. That doesn't happen. So I tell the longer story about how that design saved famously US Air Flight 1549 which you might remember is a famous flight that landed in the middle of the Hudson River. Particularly memorable for me because I have a view of where I was in town. I was actually in a plane at the time. I took off about two gates away from flight 1549. But what was interesting is that that gauge if you read the transcripts allowed the pilot Sully Sunberger to focus on the right things. That design essentially saved the plane. He was a skilled pilot of course but given a bad design who knows what the outcome would have been. I often wondered what was two things that came to mind when you were talking about that. One was I think that that started to happen wasn't it? The US Air Force designed originally designed a US Air Force cockpit chair to be designed for the average person. But of course there is no average person so people kept on crashing the planes and they realized that actually everything needs to be adjustable. The thing I was going to ask was I'm guessing that particularly when you were at a business school you must see a lot of other industries must be able to learn from good examples from different industries if that makes sense. Sorry I'm not using my words properly but hopefully you can understand what I'm trying to get to. Have you seen that happen quite a lot? Let's get back in a second or two to your point about designing things for the individual. The ejection seat example uses a good example and not all people need the same design to make good decisions and that's important but let's come back to that. The thing that is interesting is that actually a surprising little amount of learning from one industry to the other. If you look at websites they take a while and they've converged to having certain common features but still Amazon does not look like Netflix does not look like the US Airway site does not look like. I mean there are some principles and largely that learning comes because they hire the same consultants but not because they have a good idea of what they want to do with their website or stores. I mean stores have been with us, grocery stores have been with us for over 100 years and there's some difference there but it's taken that long for the standard model to emerge. That makes a lot of sense and I guess with supermarkets I think I've heard you talk a lot about default premiums and defaults. I think you mentioned a famous example with Safari and Google, is that right? It's actually Apple and Google, the iPhone. So if you take my iPhone here it turns out there's a default search engine there. And that search engine of course is very valuable property because it means whoever is seeing you type in a flight or tickets for a play captures that information. Now it turns out that Google pays Apple an estimated $12 billion a year, B. That's like one quarter of what it would cost Elon Musk to buy Google a year just to be not the required search engine but the default. Let me just explain what a default means. It means that basically it's the option that happens if you don't make an active choice. So it's pre-selected. It turns out these days it's actually relatively easy three or four clicks and I could change to that. Most people I talk to them don't even know they have a choice and when you ask them to look almost all of them have Google as the default search engine. So that is very powerful and obviously very valuable because this has been the case. This payment has been made by Google to Apple since 2014 and increasing every year. It must be nuts. I guess in a day-to-day sort of world I know that when I was working in advertising there's often a premium to be on the shelf at sort of eye level pay a massive premium for that. So I guess that would sort of also, would that still be a default do you think? I don't call that quite a default. It has some of the same mechanisms. And one of the things I try really hard to think about is what's in common because many times in behavioral sciences you know Chris people just have a list of here are a bunch of tricks you know we have a bunch of post-it notes. But there really is one person in one psychology that's actually determining how those work. So shelf position has in common that it gets you to think about something first right because you think about it because it's right in front of you. That's one of the ways defaults work. Defaults you often ask yourself first why is the default a good thing? So probably my most famous research Richard Taylor says they should put this on my tombstone is a graph about defaults and organization rates in various European countries. And it turns out those countries where you're a donor by default which are called opt out countries have rates that are closer to 90%. Those countries like the UK until at least now but perhaps change and unlike Wales which has the other default in the UK in fact you're not a donor as in the US unless you choose to be. Now that has a huge effect on people's willingness to be a donor and part of that is because people think about what is why would I want to not be a donor first or why would I want to be a donor first. Now the point is that is actually what's happens with a shelf you think about why is this biscuit the best biscuit for me and often suppose you stop short it will have an effect. But the difference is it's not pre checked. It's not something where someone has made the choice for you, although in a subtle sense they've influenced your choice. So that's one of the big powerful ways that choice architecture works by changing what you how the order in which you think about things. It's really fascinating and I mean when you were writing the book was there a particular reason why you chose to write it. Now, I mean, as opposed as it was it just you'd be quite busy. There were other alternatives but I thought it would be useful to summarize where we were. Most people know about this area because of a fine book called Nudge by Richard Taylor and Cass Sunstein, which they claim they've published the final edition. But I think we've learned a lot since Nudge was published in 2008 and it's time for a fresh overview. The other thing I think I want to do is bring some idea of what the psychology what the theory is. I think I have lots of great examples but also understanding what are the principles that drive choice architecture for two reasons. One is if you know how choice architecture works, you can choose what is it going to be the best tool for you as a designer. So I'm going to call choice architects designers because that's an easier word than repeating choice architect. Second thing, it gives you a chance to actually think about new choice architecture, new designs that might work and how they work. There's actually a third thing which is it sort of helps you understand the ethics of choice architecture. That is if it's something that people are aware of and they know about, fine, there's no ethical issue. But if it's something like many defaults where people don't think the default influences their choice, then I think there is an ethical issue, particularly if you're trying to choose defaults that might be in your interest but not in the deciders, the chooser's best interest. You must have some incredible examples of bad defaults. Do you have any favorites? Bad for the chooser particularly. There are certainly many and you don't have to look far to find them, but one of my favorites is a court case that was brought by the American Federal Trade Commission. This website had basically given you got something for free and then they had four choices underneath the thing you got for free. Only one of them was pre-checked and it cost you $10 a month and it appeared below the screen. So unless you scrolled up, you never saw it. So there's a default that and obviously since the FTC, the Federal Trade Commission was involved, they were told not to do that. But that's, to me, a good example of a very sneaky default, a very sneaky choice architect. Do you think a lawmaker is going to have to look at this more? How would they be able to judge some of these things as well? That one sounded pretty clear-cut. It was just horrendous. I'd imagine these kind of bad defaults happen a lot. I mean, particularly in the finance industry, maybe I'd imagine. Oh, certainly in finance. Also, just think about when you go to a website and it asks you to make a decision about the cookie policy. You'll notice one button saying, leave things alone is typically bright red or bright blue. The other button that says, I want to manage cookies is usually gray on gray. It's very hard to see. So how would you regulate that is a very good question. And it's not an easy question to answer because choice architecture is always going to be there. And sometimes you want an option that most people will choose to be the red button. So for example, here's an example. There are conferences where you get to choose the food. Do you want different foods to have different colored buttons? I think that's very interesting. You may if you want to say it's an environmental conference. This has actually been done. You want to encourage people to eat vegetarian. Maybe you make the vegetarian button red and the meat button harder to see. Given most people going to that conference, probably think that's a good idea. You've actually increased the number of people who get what they want. So it's more difficult than saying the buttons have to be the same color. I mean, I guess when you're looking at choice architecture, is there possibly a hard question to answer? But is there an optimum number of options that we can deal with as individuals, as humans? Because sometimes you look at stuff and you look at a menu at a restaurant. There's like a million options. I have no idea where to stop. And there's this whole literature that talks about the curse of choice. In German even rhymes, it's called the Qualdeval. How bad it is, do you have too many choices? And we all feel that. But there's also something else that happens when we get an option, which is it could be different from the first option. In fact, the reason we make a choice is because somebody wants to know what we want. Now that doesn't mean you have to give people 120 options arranged alphabetically, which unfortunately is very often done. My favorite example of this is in choices of health care policies are often in the state of Utah. I believe they had 124 policies. And imagine those are arranged alphabetically. That's not a good idea. But what you could do is arrange those in some way and actually give yourself an aid to find the right ones. Maybe you ask someone what their goals are. And if you do, then you can give them a set that's smaller. They still have in theory the broader set they could choose from. But they're more like to end up with a small set that's appropriate to them. I call this a choice engine, an engine which actually makes it easier for you to make a choice. And if the designer has your intent in mind, it could be helpful. My naive English solution would be to give everyone universal health care. That indeed might be a better solution. But I do think we would agree that 124 is probably too many. And even then, obviously, there are choices involved in the NHS. You can decide to see somebody outside the system. There are different kinds of options. So there are still, even in a single payer system like the NHS, choices are presented to people. Your doctor, when you see them, is going to present you with choices. They're a designer. So there's no getting around design, even if a small set of choices. That sort of tips that you use in your own life to help you make better decisions when you're confronted by an onslaught of options. That may be another reason I wrote the book, is to teach myself what I think I should do. I do think knowing when you've seen the right number of options and not feeling obsessed to look at everything. At the same time, I just was booking hotel. I wanted to make sure that I looked at more than one option. It turns out when you look at people's behavior on websites, they tend to only click through to one hotel. And economists have looked at that, and that costs them money. They should be searching more. And so what we should be doing, and what I should be doing when I design things for myself, is making search easy. So if I am going to give you five or six options, maybe I should say these are the ones that are close to the airport, but more expensive. These are the ones that are farther from the airport, but less expensive. Which do you want? Here's the average price. So you can actually arrange the choice in a way that makes a big number of options more feasible. Makes a lot of sense. I think I was reading a lovely article from me. I think you posted the other day on... I was going to say the Wall Street Journal, but I might get this wrong. It was on how to choose the right credit card for you or the right type of card that's right for you. I think that's something that people often struggle with is how to get that right. Because it's also written in so complicated, the paperwork that you get with all that sort of stuff. The way that they display the figures and the interest rates are also often done a bit strangely. Have you got any advice on that actually? Well, I think there are a couple of things. One thing you're pointing out that actually this is a case where it's probably the case that complication doesn't help you make a better choice. In fact, there's something very fundamental about credit cards that makes it hard. It's true of most consumer finance, which is that you have properties that are going to go against each other. We academic call negatively correlated. You're good on one, you can be bad on the other. So for credit cards, for example, that's often... There's an annual fee, which is the fee that you're charged for your balance over time. And then there's a teaser rate. It's sometimes called an initial introductory rate. And that actually turns out the lower the introductory rate, the higher the long-term rate is going to be. So you can't just pick one. I want the one with the lowest introductory rate because you're going to end up paying more money later. And so that is a good example of where it's very difficult. What I suggest in the article is that you can actually just average those two. If you know you're going to have a credit card for two years, you can actually figure out what's the average interest rate over that. Then now you have only one number to worry about, and that's going to be a lot easier. So it's being smart. You have to do some, as the British would say, math, but you can make those math easier by doing things like that. Credit card choice is very difficult. I did spend some time as a senior advisor at the US equivalent of the Financial Conduct Authority, which is called the Consumer Financial Protection Bureau. And it's amazing how difficult some consumer choices are. And that's a place where most people just want to make sure the information is there, and it's hard for them to think about how to present the information in a way that will make consumers make better choices. But as the director recently pointed out in a blog post, if we can make the information easier to process, the markets become more competitive. And actually consumers will be better off if the market's competitive. So there's a sense in which bad-charge architecture actually is in some firms' best interests, not the best firms, actually the mediocre firms, but it's in the best interest of mediocre firms, but not in consumers' best interests. And actually I think a really important role of regulators is to make sure people can make intelligent choices. And I guess like a huge number of the viral audience, sort of people in marketing or people starting their own businesses, do you have any sort of advice that you normally give those sort of people? Apart from, obviously, read your book, tip number one. And buy copies for all your employees. Yes, of course. But I do think there's a generic thing, and I find this all the time with my students. I teach at Columbia Business School, and they think about the product the way they think about it. They don't think about the product the way their customers think about it. You know, they might do a focus group, but even then they don't really necessarily listen. And there's lots of examples of this. But as a result, they end up paying attention to features that are less important to the customer and more important to them. Engineers tend to think about performance characteristics more than they should maybe aesthetic characteristics. There's lots of examples of that. So we all have our own biases, I guess. So is the way to overcome that then just make sure you have asked more questions or asked opinions from different people? And certainly listening is useful. You know, one of the things that is often done with websites that can be done anywhere is not a focus group because then people are talking to each other, but actually just listen to one person going through the site and seeing where they're confused. Another way of doing it, which is quite a bit more techie actually, but increasingly doable is you can watch people's eyes as they look at the website, eye tracking. And everyone I know who's watched someone do this is amazed that, oh, you're looking at that. We want you to look at this. We want you to look at how excellent our stop returns are. Instead, you're looking at the picture of the family that's smiling. I mean, it's actually quite eye-opening pun sort of intended to watch the eye. By the way, it's actually interesting is actually a still camera. We think of it as if it was a movie camera, a TV camera, and it's continuous. It's actually taking serious snapshots. So if you actually look at someone reading, their eye will move, stop, move, stop. And so it's incredibly informative to look at the areas where the eye is stopped, because that's when it's actually seeing things. So one way to get outside of your head, inside your consumer's head, is to actually watch your consumer make the choice using eye tracking. It's a fascinating thing. I remember, I mean, it's possibly not related, but we're talking about the way that the eye acts as a camera. We all have a standard refresh rate of everything, which is why the motion appears smoothly. But I remember always thinking in the back of my head, why do birds always only fly out of the way of our cars at the last possible moment? So they're sort of, are they thrill seekers or something? And I remember a scientist telling me that they have a much higher refresh rate on their eye. So to them, it looks like the car's going half the speed that we're going. So they're like, oh, we've got loads of time to move. Every now and then they don't judge it right. Almost if we were looking at the bird, it would be like we're moving in slow motion because their refresh rate is much higher. Anyway, a tightly random thing. But interesting. I mean, our eyes are literally how we make decisions along with our memory. And if you understand what information someone's looking at, you're going to understand a lot more, sort of like you're trying to understand the bird. Yeah, I love asking random questions. So you give a random question. I think I heard that you had an amazing mental. And I was thinking up a little bit about it. But yeah, I wondered if you'd mind sharing a bit of that story. I've been incredibly lucky. And I do think it's luck. I went to Carnegie Mellon for graduate school. And the person who was soon to become the first psychologist to win the Nobel Prize was an amazing man named Herbert Simon, who started out in political science and sort of ended up doing computer simulation. Very well known. And, you know, it was actually quite an interesting thing. And he had a story which I loved in one of his books, which is quite relevant to what we're talking about. He says, imagine you're at the beach and you're watching an ant. And the ant is zig-zagging and it looks very complicated. He says, it turns out that, of course, the ant has a very simple goal. It wants to get from the ant hole to the food and back. What's making the behavior complicated is the environment. They're avoiding stones and avoiding feet of people. You know, what they're doing is actually trying to get from A to B, but do it while surviving. And what this really means is that if we're trying to understand someone making a decision, the person is complicated, certainly more complicated than the ant, but the environment is what's producing a lot of the behavior that looks complicated. So that, you know, was very memorable. And then the other person who I, many people were great mentors, but another person who was very influential, so I then got to do a post-op fellowship thanks to the National Science Foundation with Amos Diversky, who was, would have been the second or tied for a second psychologist, and unfortunately he passed away before they gave the award to Danny Connellyman. But that was actually a wonderful year that I spent at Stanford working with him. What was Amos like? Was he sort of as fun as Danny? I mean, I'm guessing they must have had different... But if you, I mean, you don't have to take my word for it. Michael Lewis in his book has described them as wonderful opposites. And, but, you know, as a young PhD student, or at that time a freshly minted PhD, there's another word that would come to mind, which is intimidating. Not that they meant to be, but, you know, particularly Amos, who I knew well, was very fast. And, you know, writing with him back in the days when people wrote on paper, you know, I would hand him my print out of my nice, you know, best draft, and about a third of it might live. And he was right. It was much better. I hope one of the things I've learned to be is a better writer as a result of that. Well, I'm sure you are. I feel book reviews are anything to go through. It's got a lot of praise from everywhere around the world. So, I mean, congratulations. Anyone who's trying to help people become or make better choices and make their lives a little bit easier is always an incredible human in my book. So, bravo on you for your great work. I wanted to end by just asking you a really silly question that we tend to ask everyone on the podcast. So, if you had to, you know, would you rather always sing whenever you had to talk or dance whenever you wanted to walk? It's interesting because I have been an amateur musician and I'm a better musician but worse vocalist than I might be a dancer. So, I think the dancing might appeal to me, but only because I'm such an awful singer. On the other hand, if you... Oh, there's an old cartoonist, Jules Pfeiffer, who used to talk about interpretive dance. That's probably what would emerge. It would be part of the communication. But it's a great silly question. Now, what I really would want to do is play bass, which is my musical instrument. I think that would be a lot more fun. Well, that can be the answer then. Dance and play bass, or just play bass. And, yeah, I mean, just if people want to... Obviously, if they want to buy your book, the best place to go, I imagine there's any good bookshop or if you've got access to the internet, probably Amazon is your friend. But there are other websites, of course, that you can go to. There's actually a website, TheElementsOfChoice.com. Right. There are many Eric Johnson's, including, by the way, a Grammy Award-winning guitarist who's not me. But Eric J. Johnson, you'll find me. So, TheElementsOfChoice.com, best website to go. We'll put the link in the description here as well. So, Eric, thank you so much for taking the time to talk with us. I really appreciate it. And, yeah, it's been such an honor. And really thank you for all you do. And I hope you keep on doing it for a long, long time. It's very inspirational. So, thank you. Thanks. Chris, thank you so much. It's been a lot of fun. I hope your listeners will enjoy this.