Daniel Goldstein: The battle between your present and future self

312,420 views ・ 2011-12-21

TED


Please double-click on the English subtitles below to play the video.

00:15
Do you remember the story
0
15260
2000
00:17
of Odysseus and the Sirens
1
17260
2000
00:19
from high school or junior high school?
2
19260
2000
00:21
There was this hero, Odysseus, who's heading back home
3
21260
3000
00:24
after the Trojan War.
4
24260
2000
00:26
And he's standing on the deck of his ship,
5
26260
2000
00:28
he's talking to his first mate,
6
28260
2000
00:30
and he's saying,
7
30260
2000
00:32
"Tomorrow, we will sail past those rocks,
8
32260
3000
00:35
and on those rocks sit some beautiful women
9
35260
2000
00:37
called Sirens.
10
37260
2000
00:39
And these women sing an enchanting song,
11
39260
3000
00:42
a song so alluring
12
42260
2000
00:44
that all sailors who hear it
13
44260
2000
00:46
crash into the rocks and die."
14
46260
2000
00:48
Now you would expect, given that,
15
48260
2000
00:50
that they would choose an alternate route around the Sirens,
16
50260
3000
00:53
but instead Odysseus says,
17
53260
3000
00:56
"I want to hear that song.
18
56260
2000
00:58
And so what I'm going to do
19
58260
2000
01:00
is I'm going to pour wax in the ears
20
60260
2000
01:02
of you and all the men --
21
62260
2000
01:04
stay with me --
22
64260
2000
01:06
so that you can't hear the song,
23
66260
2000
01:08
and then I'm going to have you tie me to the mast
24
68260
3000
01:11
so that I can listen
25
71260
2000
01:13
and we can all sail by unaffected."
26
73260
2000
01:15
So this is a captain
27
75260
3000
01:18
putting the life of every single person on the ship at risk
28
78260
2000
01:20
so that he can hear a song.
29
80260
2000
01:22
And I'd like to think if this was the case,
30
82260
2000
01:24
they probably would have rehearsed it a few times.
31
84260
3000
01:27
Odysseus would have said, "Okay, let's do a dry run.
32
87260
3000
01:30
You tie me to the mast, and I'm going to beg and plead.
33
90260
3000
01:33
And no matter what I say, you cannot untie me from the mast.
34
93260
2000
01:35
All right, so tie me to the mast."
35
95260
2000
01:37
And the first mate takes a rope
36
97260
2000
01:39
and ties Odysseus to the mast in a nice knot.
37
99260
3000
01:42
And Odysseus does his best job playacting
38
102260
2000
01:44
and says, "Untie me. Untie me.
39
104260
2000
01:46
I want to hear that song. Untie me."
40
106260
2000
01:48
And the first mate wisely resists
41
108260
2000
01:50
and doesn't untie Odysseus.
42
110260
2000
01:52
And then Odysseus says, "I see that you can get it.
43
112260
3000
01:55
All right, untie me now and we'll get some dinner."
44
115260
3000
01:58
And the first mate hesitates.
45
118260
2000
02:00
He's like, "Is this still the rehearsal,
46
120260
2000
02:02
or should I untie him?"
47
122260
3000
02:05
And the first mate thinks,
48
125260
2000
02:07
"Well, I guess at some point the rehearsal has to end."
49
127260
3000
02:10
So he unties Odysseus, and Odysseus flips out.
50
130260
3000
02:13
He's like, "You idiot. You moron.
51
133260
2000
02:15
If you do that tomorrow, I'll be dead, you'll be dead,
52
135260
2000
02:17
every single one of the men will be dead.
53
137260
2000
02:19
Now just don't untie me no matter what."
54
139260
3000
02:22
He throws the first mate to the ground.
55
142260
2000
02:24
This repeats itself through the night --
56
144260
2000
02:26
rehearsal, tying to the mast,
57
146260
2000
02:28
conning his way out of it,
58
148260
2000
02:30
beating the poor first mate up mercilessly.
59
150260
3000
02:33
Hilarity ensues.
60
153260
3000
02:36
Tying yourself to a mast
61
156260
2000
02:38
is perhaps the oldest written example
62
158260
2000
02:40
of what psychologists call a commitment device.
63
160260
3000
02:43
A commitment device is a decision that you make
64
163260
3000
02:46
with a cool head to bind yourself
65
166260
3000
02:49
so that you don't do something regrettable
66
169260
2000
02:51
when you have a hot head.
67
171260
3000
02:54
Because there's two heads inside one person
68
174260
2000
02:56
when you think about it.
69
176260
2000
02:58
Scholars have long invoked this metaphor of two selves
70
178260
3000
03:01
when it comes to questions of temptation.
71
181260
3000
03:04
There is first, the present self.
72
184260
3000
03:07
This is like Odysseus when he's hearing the song.
73
187260
3000
03:10
He just wants to get to the front row.
74
190260
2000
03:12
He just thinks about the here and now and the immediate gratification.
75
192260
3000
03:15
But then there's this other self, the future self.
76
195260
3000
03:18
This is Odysseus as an old man
77
198260
2000
03:20
who wants nothing more than to retire in a sunny villa
78
200260
3000
03:23
with his wife Penelope
79
203260
2000
03:25
outside of Ithaca -- the other one.
80
205260
3000
03:31
So why do we need commitment devices?
81
211260
4000
03:35
Well resisting temptation is hard,
82
215260
2000
03:37
as the 19th century English economist
83
217260
3000
03:40
Nassau William Senior said,
84
220260
2000
03:42
"To abstain from the enjoyment which is in our power,
85
222260
3000
03:45
or to seek distant rather than immediate results,
86
225260
3000
03:48
are among the most painful exertions
87
228260
2000
03:50
of the human will."
88
230260
2000
03:52
If you set goals for yourself and you're like a lot of other people,
89
232260
3000
03:55
you probably realize
90
235260
2000
03:57
it's not that your goals are physically impossible
91
237260
2000
03:59
that's keeping you from achieving them,
92
239260
2000
04:01
it's that you lack the self-discipline to stick to them.
93
241260
3000
04:04
It's physically possible to lose weight.
94
244260
2000
04:06
It's physically possible to exercise more.
95
246260
3000
04:09
But resisting temptation
96
249260
2000
04:11
is hard.
97
251260
2000
04:13
The other reason
98
253260
2000
04:15
that it's difficult to resist temptation
99
255260
3000
04:18
is because it's an unequal battle
100
258260
3000
04:21
between the present self and the future self.
101
261260
2000
04:23
I mean, let's face it, the present self is present.
102
263260
2000
04:25
It's in control. It's in power right now.
103
265260
3000
04:28
It has these strong, heroic arms
104
268260
2000
04:30
that can lift doughnuts into your mouth.
105
270260
2000
04:32
And the future self is not even around.
106
272260
3000
04:35
It's off in the future. It's weak.
107
275260
3000
04:38
It doesn't even have a lawyer present.
108
278260
2000
04:40
There's nobody to stick up for the future self.
109
280260
2000
04:42
And so the present self can trounce
110
282260
3000
04:45
all over its dreams.
111
285260
2000
04:47
So there's this battle between the two selves that's being fought,
112
287260
4000
04:51
and we need commitment devices
113
291260
2000
04:53
to level the playing field between the two.
114
293260
3000
04:56
Now I'm a big fan of commitment devices actually.
115
296260
3000
04:59
Tying yourself to the mast is the oldest one, but there are other ones
116
299260
3000
05:02
such as locking a credit card away with a key
117
302260
4000
05:06
or not bringing junk food into the house so you won't eat it
118
306260
3000
05:09
or unplugging your Internet connection
119
309260
2000
05:11
so you can use your computer.
120
311260
2000
05:13
I was creating commitment devices of my own
121
313260
2000
05:15
long before I knew what they were.
122
315260
2000
05:17
So when I was a starving post-doc
123
317260
2000
05:19
at Columbia University,
124
319260
2000
05:21
I was deep in a publish-or-perish phase of my career.
125
321260
3000
05:24
I had to write five pages a day
126
324260
2000
05:26
towards papers
127
326260
2000
05:28
or I would have to give up five dollars.
128
328260
3000
05:31
And when you try to execute these commitment devices,
129
331260
3000
05:34
you realize the devil is really in the details.
130
334260
2000
05:36
Because it's not that easy to get rid of five dollars.
131
336260
3000
05:39
I mean, you can't burn it; that's illegal.
132
339260
3000
05:42
And I thought, well I could give it to a charity
133
342260
2000
05:44
or give it to my wife or something like that.
134
344260
2000
05:46
But then I thought, oh, I'm sending myself mixed messages.
135
346260
2000
05:48
Because not writing is bad, but giving to charity is good.
136
348260
3000
05:51
So then I would kind of justify not writing
137
351260
2000
05:53
by giving a gift.
138
353260
2000
05:55
And then I kind of flipped that around and thought,
139
355260
2000
05:57
well I could give it to the neo-Nazis.
140
357260
2000
05:59
But then I was like, that's more bad than writing is good,
141
359260
3000
06:02
and so that wouldn't work.
142
362260
2000
06:04
So ultimately, I just decided
143
364260
2000
06:06
I would leave it in an envelope on the subway.
144
366260
3000
06:09
Sometimes a good person would find it,
145
369260
2000
06:11
sometimes a bad person would find it.
146
371260
2000
06:13
On average, it was just a completely pointless exchange of money
147
373260
3000
06:16
that I would regret.
148
376260
2000
06:18
(Laughter)
149
378260
3000
06:21
Such it is with commitment devices.
150
381260
3000
06:24
But despite my like for them,
151
384260
4000
06:28
there's two nagging concerns
152
388260
2000
06:30
that I've always had about commitment devices,
153
390260
2000
06:32
and you might feel this if you use them yourself.
154
392260
2000
06:34
So the first is,
155
394260
2000
06:36
when you've got one of these devices going,
156
396260
2000
06:38
such as this contract to write everyday or pay,
157
398260
3000
06:41
it's just a constant reminder
158
401260
2000
06:43
that you have no self-control.
159
403260
2000
06:45
You're just telling yourself, "Without you, commitment device,
160
405260
2000
06:47
I am nothing, I have no self-discipline."
161
407260
3000
06:50
And then when you're ever in a situation
162
410260
2000
06:52
where you don't have a commitment device in place --
163
412260
3000
06:55
like, "Oh my God, that person's offering me a doughnut,
164
415260
2000
06:57
and I have no defense mechanism," --
165
417260
2000
06:59
you just eat it.
166
419260
2000
07:01
So I don't like the way that they take the power away from you.
167
421260
3000
07:04
I think self-discipline is something, it's like a muscle.
168
424260
3000
07:07
The more you exercise it, the stronger it gets.
169
427260
3000
07:10
The other problem with commitment devices
170
430260
2000
07:12
is that you can always weasel your way out of them.
171
432260
3000
07:15
You say, "Well, of course I can't write today,
172
435260
2000
07:17
because I'm giving a TEDTalk and I have five media interviews,
173
437260
3000
07:20
and then I'm going to a cocktail party and then I'll be drunk after that.
174
440260
3000
07:23
And so there's no way that this is going to work."
175
443260
3000
07:26
So in effect, you are like Odysseus and the first mate
176
446260
2000
07:28
in one person.
177
448260
2000
07:30
You're putting yourself, you're binding yourself,
178
450260
3000
07:33
and you're weaseling your way out of it,
179
453260
2000
07:35
and then you're beating yourself up afterwards.
180
455260
2000
07:37
So I've been working
181
457260
2000
07:39
for about a decade now
182
459260
2000
07:41
on finding other ways
183
461260
2000
07:43
to change people's relationship to the future self
184
463260
2000
07:45
without using commitment devices.
185
465260
2000
07:47
In particular, I'm interested in the relationship
186
467260
3000
07:50
to the future financial self.
187
470260
3000
07:54
And this is a timely issue.
188
474260
2000
07:56
I'm talking about the topic of saving.
189
476260
2000
07:58
Now saving is a classic two selves problem.
190
478260
2000
08:00
The present self does not want to save at all.
191
480260
3000
08:03
It wants to consume.
192
483260
2000
08:05
Whereas the future self wants the present self to save.
193
485260
3000
08:09
So this is a timely problem.
194
489260
2000
08:11
We look at the savings rate
195
491260
2000
08:13
and it has been declining since the 1950s.
196
493260
3000
08:16
At the same time, the Retirement Risk Index,
197
496260
3000
08:19
the chance of not being able to meet your needs in retirement,
198
499260
3000
08:22
has been increasing.
199
502260
2000
08:24
And we're at a situation now
200
504260
2000
08:26
where for every three baby boomers,
201
506260
2000
08:28
the McKinsey Global Institute predicts
202
508260
2000
08:30
that two will not be able to meet their pre-retirement needs
203
510260
4000
08:34
while they're in retirement.
204
514260
2000
08:36
So what can we do about this?
205
516260
3000
08:39
There's a philosopher, Derek Parfit,
206
519260
3000
08:42
who said some words that were inspiring to my coauthors and I.
207
522260
3000
08:45
He said that, "We might neglect our future selves
208
525260
3000
08:48
because of some failure of belief or imagination."
209
528260
4000
08:52
That is to say,
210
532260
2000
08:54
we somehow might not believe that we're going to get old,
211
534260
3000
08:57
or we might not be able to imagine
212
537260
2000
08:59
that we're going to get old some day.
213
539260
2000
09:01
On the one hand, it sounds ridiculous.
214
541260
2000
09:03
Of course, we know that we're going to get old.
215
543260
2000
09:05
But aren't there things that we believe and don't believe at the same time?
216
545260
3000
09:08
So my coauthors and I have used computers,
217
548260
3000
09:11
the greatest tool of our time,
218
551260
2000
09:13
to assist people's imagination
219
553260
2000
09:15
and help them imagine what it might be like
220
555260
3000
09:18
to go into the future.
221
558260
2000
09:20
And I'll show you some of these tools right here.
222
560260
3000
09:23
The first is called the distribution builder.
223
563260
2000
09:25
It shows people what the future might be like
224
565260
3000
09:28
by showing them a hundred equally probable outcomes
225
568260
3000
09:31
that might be obtained in the future.
226
571260
2000
09:33
Each outcome is shown by one of these markers,
227
573260
3000
09:36
and each sits on a row
228
576260
2000
09:38
that represents a level of wealth and retirement.
229
578260
2000
09:40
Being up at the top
230
580260
2000
09:42
means that you're enjoying a high income in retirement.
231
582260
2000
09:44
Being down at the bottom
232
584260
2000
09:46
means that you're struggling to make ends meet.
233
586260
2000
09:48
When you make an investment,
234
588260
2000
09:50
what you're really saying is, "I accept
235
590260
2000
09:52
that any one of these 100 things
236
592260
2000
09:54
could happen to me and determine my wealth."
237
594260
2000
09:56
Now you can try to move your outcomes around.
238
596260
3000
09:59
You can try to manipulate your fate, like this person is doing,
239
599260
3000
10:02
but it costs you something to do it.
240
602260
2000
10:04
It means that you have to save more today.
241
604260
4000
10:08
Once you find an investment that you're happy with,
242
608260
2000
10:10
what people do is they click "done"
243
610260
2000
10:12
and the markers begin to disappear,
244
612260
2000
10:14
slowly, one by one.
245
614260
2000
10:16
It simulates what it is like to invest in something
246
616260
2000
10:18
and to watch that investment pan out.
247
618260
3000
10:21
At the end, there will only be one marker left standing
248
621260
3000
10:24
and it will determine our wealth in retirement.
249
624260
3000
10:27
Yes, this person retired
250
627260
2000
10:29
at 150 percent of their working income in retirement.
251
629260
4000
10:33
They're making more money while retired
252
633260
2000
10:35
than they were making while they were working.
253
635260
2000
10:37
If you're like most people,
254
637260
2000
10:39
just seeing that gave you a small sense of elation and joy --
255
639260
4000
10:43
just to think about making
256
643260
2000
10:45
50 percent more money in retirement than before.
257
645260
3000
10:48
However, had you ended up on the very bottom,
258
648260
2000
10:50
it might have given you a slight sense
259
650260
2000
10:52
of dread and/or nausea
260
652260
2000
10:54
thinking about struggling to get by in retirement.
261
654260
4000
10:58
By using this tool over and over
262
658260
2000
11:00
and simulating outcome after outcome,
263
660260
3000
11:03
people can understand
264
663260
2000
11:05
that the investments and savings that they undertake today
265
665260
3000
11:08
determine their well-being in the future.
266
668260
2000
11:10
Now people are motivated through emotions,
267
670260
3000
11:13
but different people find different things motivating.
268
673260
3000
11:16
This is a simulation
269
676260
3000
11:19
that uses graphics,
270
679260
2000
11:21
but other people find motivating what money can buy,
271
681260
2000
11:23
not just numbers.
272
683260
2000
11:25
So here I made a distribution builder
273
685260
2000
11:27
where instead of showing numerical outcomes,
274
687260
3000
11:30
I show people what those outcomes will get you,
275
690260
3000
11:33
in particular apartments that you can afford
276
693260
2000
11:35
if you're retiring on 3,000, 2,500,
277
695260
3000
11:38
2,000 dollars per month and so on.
278
698260
3000
11:41
As you move down the ladder of apartments,
279
701260
2000
11:43
you see that they get worse and worse.
280
703260
3000
11:46
Some of them look like places I lived in as a graduate student.
281
706260
4000
11:50
And as you get to the very bottom,
282
710260
4000
11:54
you're faced with the unfortunate reality
283
714260
2000
11:56
that if you don't save anything for retirement,
284
716260
2000
11:58
you won't be able to afford any housing at all.
285
718260
3000
12:01
Those are actual pictures of actual apartments
286
721260
2000
12:03
renting for that amount
287
723260
2000
12:05
as advertised on the Internet.
288
725260
2000
12:07
The last thing I'll show you,
289
727260
2000
12:09
the last behavioral time machine,
290
729260
2000
12:11
is something that I created with Hal Hershfield,
291
731260
3000
12:14
who was introduced to me by my coauthor on a previous project,
292
734260
3000
12:17
Bill Sharpe.
293
737260
2000
12:19
And what it is
294
739260
2000
12:21
is an exploration into virtual reality.
295
741260
2000
12:23
So what we do is we take pictures of people --
296
743260
3000
12:26
in this case, college-age people --
297
746260
2000
12:28
and we use software to age them
298
748260
2000
12:30
and show these people what they'll look like
299
750260
3000
12:33
when they're 60, 70, 80 years old.
300
753260
2000
12:35
And we try to test
301
755260
2000
12:37
whether actually assisting your imagination
302
757260
3000
12:40
by looking at the face of your future self
303
760260
2000
12:42
can change you investment behavior.
304
762260
2000
12:44
So this is one of our experiments.
305
764260
3000
12:47
Here we see the face of the young subject on the left.
306
767260
3000
12:50
He's given a control
307
770260
2000
12:52
that allows him to adjust his savings rate.
308
772260
2000
12:54
As he moves his savings rate down,
309
774260
2000
12:56
it means that he's saving zero
310
776260
2000
12:58
when it's all the way here at the left.
311
778260
2000
13:00
You can see his current annual income --
312
780260
2000
13:02
this is the percentage of his paycheck that he can take home today --
313
782260
3000
13:05
is quite high, 91 percent,
314
785260
2000
13:07
but his retirement income is quite low.
315
787260
2000
13:09
He's going to retire on 44 percent
316
789260
2000
13:11
of what he earned while he was working.
317
791260
3000
13:14
If he saves the maximum legal amount,
318
794260
3000
13:17
his retirement income goes up,
319
797260
2000
13:19
but he's unhappy
320
799260
2000
13:21
because now he has less money on the left-hand side to spend today.
321
801260
3000
13:25
Other conditions show people the future self.
322
805260
3000
13:28
And from the future self's point of view, everything is in reverse.
323
808260
3000
13:31
If you save very little,
324
811260
2000
13:33
the future self is unhappy
325
813260
2000
13:35
living on 44 percent of the income.
326
815260
3000
13:38
Whereas if the present self saves a lot,
327
818260
3000
13:41
the future self is delighted,
328
821260
2000
13:43
where the income is close up near 100 percent.
329
823260
3000
13:46
To bring this to a wider audience,
330
826260
3000
13:49
I've been working with Hal and Allianz
331
829260
3000
13:52
to create something we call the behavioral time machine,
332
832260
3000
13:55
in which you not only get to see yourself in the future,
333
835260
3000
13:58
but you get to see anticipated emotional reactions
334
838260
3000
14:01
to different levels of retirement wealth.
335
841260
3000
14:04
So for instance,
336
844260
2000
14:06
here is somebody using the tool.
337
846260
2000
14:08
And just watch the facial expressions
338
848260
2000
14:10
as they move the slider.
339
850260
2000
14:12
The younger face gets happier and happier, saving nothing.
340
852260
2000
14:14
The older face is miserable.
341
854260
2000
14:16
And slowly, slowly we're bringing it up to a moderate savings rate.
342
856260
2000
14:18
And then it's a high savings rate.
343
858260
2000
14:20
The younger face is getting unhappy.
344
860260
2000
14:22
The older face is quite pleased
345
862260
2000
14:24
with the decision.
346
864260
3000
14:27
We're going to see if this has an effect on what people do.
347
867260
2000
14:29
And what's nice about it
348
869260
2000
14:31
is it's not something that biasing people actually,
349
871260
3000
14:34
because as one face smiles,
350
874260
2000
14:36
the other face frowns.
351
876260
2000
14:38
It's not telling you which way to put the slider,
352
878260
2000
14:40
it's just reminding you that you are
353
880260
3000
14:43
connected to and legally tied to
354
883260
2000
14:45
this future self.
355
885260
2000
14:47
Your decisions today are going to determine its well-being.
356
887260
3000
14:50
And that's something that's easy to forget.
357
890260
3000
14:53
This use of virtual reality
358
893260
3000
14:56
is not just good for making people look older.
359
896260
2000
14:58
There are programs you can get
360
898260
2000
15:00
to see how people might look
361
900260
2000
15:02
if they smoke, if they get too much exposure to the sun,
362
902260
3000
15:05
if they gain weight and so on.
363
905260
2000
15:07
And what's good is,
364
907260
2000
15:09
unlike in the experiments that Hal and myself ran with Russ Smith,
365
909260
3000
15:12
you don't have to program these by yourself
366
912260
2000
15:14
in order to see the virtual reality.
367
914260
3000
15:17
There are applications you can get on smartphones for just a few dollars
368
917260
3000
15:20
that do the same thing.
369
920260
2000
15:22
This is actually a picture of Hal, my coauthor.
370
922260
2000
15:24
You might recognize him from the previous demos.
371
924260
3000
15:27
And just for kicks we ran his picture
372
927260
3000
15:30
through the balding, aging and weight gain software
373
930260
3000
15:33
to see how he would look.
374
933260
2000
15:35
Hal is here, so I think we owe it to him as well as yourself
375
935260
3000
15:38
to disabuse you of that last image.
376
938260
3000
15:42
And I'll close it there.
377
942260
2000
15:44
On behalf of Hal and myself,
378
944260
2000
15:46
I wish all the best to your present and future selves.
379
946260
2000
15:48
Thank you.
380
948260
2000
15:50
(Applause)
381
950260
3000
About this website

This site will introduce you to YouTube videos that are useful for learning English. You will see English lessons taught by top-notch teachers from around the world. Double-click on the English subtitles displayed on each video page to play the video from there. The subtitles scroll in sync with the video playback. If you have any comments or requests, please contact us using this contact form.

https://forms.gle/WvT1wiN1qDtmnspy7