Behavioral Experts Behaving Badly

Rory Sutherland is Vice Chairman at Ogilvy & Mather, an international advertising agency whose founder, David Ogilvy, is said to be the inspiration for the Don Draper character on Mad Men.

Sutherland is an expert on behavioral economics and human psychology. Sales and marketing departments were utilizing behavioral psychology on unsuspecting customers decades before it became mainstream in the world of behavioral finance.

Sutherland appeared on a recent episode of the Freakonomics podcast to discuss his research and findings on such things as loss aversion, social norming and choice architecture. His insights as to how ad agencies have been utilizing an understanding of people’s natural biases for the past 50-60 years were incredible. These firms are experts at getting people to pay attention and subconsciously take action.

But what I found most interesting about the discussion was at the very end when Stephen Dubner, the Freakonomics podcast host, asked Sutherland a personal question. For some background, here’s Sutherland’s Twitter bio:

Dubner asked Sutherland why, if he is a foremost expert in changing people’s behavior, he is still a self-proclaimed, “fat bloke?” Why hasn’t he changed his own behavior and lost weight? Sutherland was a good sport and joked, “The pathetic defense, which isn’t really true, is that I’m a kind of method copywriter that to actually tackle the growing obesity problem I have to experience obesity myself.”

I find the psychology of behavioral change to be fascinating. The Sutherland story reminded me of a passage from one of my favorite behavioral investing books, The Little Book of Behavioral Investing: How to Not Be Your Own Worst Enemy, by James Montier. In the book’s conclusion, after going over nearly every investor blind spot and cognitive bias you can imagine, Montier made an admission:

It is confession time. As anyone who knows me can attest, I am overweight (although I prefer to think of myself as simply too short for my weight). In fact, according to the body mass index which compares height to weight (designed by size fascists, I’m sure) I am on the borderline between overweight and obese.

I know how to correct this problem. I should simply eat less. However, I find this incredibly hard to actually do. So despite the fact I know how to change, I don’t change, so my knowledge doesn’t translate into better behavior. Rather I file the information in the category of “things I know and choose to ignore.”

I don’t know if these stories should make ordinary people who aren’t experts in the field of psychology feel better or worse about their ability to make changes in their own behavior. I find it interesting how people can be so disciplined in one area of their life, but undisciplined in others. But it’s not so uncommon. I know plenty of people that are in excellent health, eat right and workout religiously who are terrible with their spending habits. On the other hand, I know others who are diligent savers and conscientious spenders but cannot for the life of them bring themselves to go to the gym or change their diet.

Everyone has their personal kryptonite. Knowledge alone can’t change your behavior, even if you are an expert in the field of behavioral psychology. This fact should either give everyone else hope or it proves that we’re all doomed.

Sources:
The Little Book of Behavioral Investing
The Maddest Men of All (Freakonomics Podcast)

Further Reading:
Losing Weight, Saving and Decision Fatigue
Why Will Power Alone Isn’t Enough to Change Your Behavior
James Montier’s Laws on Investing