The first experiments we did were with financial bonuses.
But what about other forces? For example, social recognition.
We did a task of anagrams. We asked people to solve some anagrams and
we paid them by their success. And people were scattered around the room
and every person had the little cubicle. And they were solving anagrams for pay.
But from time to time, we asked somebody to get up, come to the board in front of
everybody, and solve the anagram in front of everybody.
They still got paid in the same way. But now they solved it in front of
everybody. Now would this be more important to
people, or less important to people? It's more important because you take the
financial motivation to solve anagram. Plus you add to it the social desire to
have your friends think you're a smart person.
And to avoid looking foolish. But what actually happened to performance?
Performance was about half as high in the public condition than in the private
condition. When people wanted the most to perform
well, they actually worked the hardest. And this is of course things like test
anxiety and so on. When we want to perform to the best of our
ability, it doesn't mean that we can. It means we want to but this wanting to
can actually overwhelm our ability. So, what do we have?
When we think about the relationship between incentive and performance, we
usually think about just an increasing amount.
Sometimes we think about diminishing returns.
Very rarely do we think that performance would go up and then reverse, and go down.
But so far when we've tried things, this is what we see.
And I should point that somebody did an analysis of how people play golf when they
play next to Tiger Woods. This was in the period before he had all
these affairs and he was the top player in the world.
And what do you think would happen to somebody who's playing next to him?
Would Tiger Woods push them to be better or stress them to perform worse?
Well, the results show that he stresses them to perform worse.
By the way, from this perspective, it is also interesting to speculate about Tiger
Woods. He was a guy who was the most important I
guess, successful golf player ever. And all, he was at the height of his
career, all of a sudden he found out that he has some affairs and his performance
drops down. How can it be?
Right? I mean, could it be that he couldn't
concentrate, that he couldn't think very much, that his mind was preoccupied?
I mean, that's one interpretation, but it tells you how easy it is to get people to
being distracted and by thinking about some other things not performing very
well. One of my friends had a different theory.
He said that maybe what he was doing is he basically had no release for his sexual
energy so he was all pent up and he couldn't perform very well.
And I don't know how to differentiate between these two, these two theories.
So now, let's go back to Wall Street executives.
I meet these Wall Street executives, and they say, oh, your results are very, very
nice, but they don't apply to us, to the Wall Street executives.
Why? Because your experiment, dear Dan, are
carried on regular normal people, students, people in India and so on.
We are super special people. If you hide the distribution of people, we
would be at the edge. Regular people would stress, get stressed
by a thousand, 2000, $50 million. We don't worry about this.
In fact, there's not an amount of money in the world that would get us to go off the
continuous improvement. And you can pay us as much as you want and
we would always improve in quality and never deteriorate.
Now, of course, what I do when they say something like this is to invite them to
the lab. And I say you know what, maybe you're
right, why don't you come to the lab and let's test things out and if you'll give
me a research budget, we could see whether you indeed don't get stressed with these
large amounts of money. But none of them is truly that interested
in doing it and nobody has ever appeared in the lab.
But nevertheless, it was an important point.
I don't believe that. I don't believe that all the stress free
people are going to Wall Street and these are not normal people and so on, but
maybe. Now testing people in Wall Street is very
tough. So, instead what we did was we went to
look at professional basketball players. And together with Coach Kane the head of
the university basketball team and we got his help to contact professional coaches
of teams at the NBA, the, the national league for basketball.
And we asked him to tell us, who are the clutch players in the league?
Clutch players are the people who get the ball in the last second, and then shoot
the ball. And everybody thinks that they are doing
fantastic job under stress. And what was interesting is that all these
coaches basically agreed very well about who were the clutch players.
They named 17 people, and the agreement was virtually 100% about who those 17
people are. And then we went back and we looked at the
whole season of basketball games. And we looked at what was the performance
of these clutch players? So, we looked at how many points these
clutch players em, eh, got in the last five minutes of the game versus the last
five minutes of the first half. Two five-minute periods.
One is crucial, one less important. And then we also looked at the regular
team members. So, what do you think happened?
Did the clutch players have more points in the last five minutes of the game compared
to the last five minutes of the first half?
The answer is yes. And did the team members get more points
in the last five minutes compared to the last five minutes of the first half?
No. So the first look it seems like regular
people, nonclutch players have a flat effect from the 5 minutes at the end of
the first half to the last. And clutch players have an improvement.
But there two ways you could get more points, you can get the ball passed to you
more, you can try more often, but just do the same.
Or you can actually improve your percentage average.
Which one do you think they did? Did they just try more frequently or did
they just improve their point average, or a little bit of both?
Well, it's just that they tried more frequently.
There was no higher success in terms of percentage.
Other people seem to think the will try to play him.
They passed him the ball. They think that they're a clutch player.
They try more frequently. Success is just the same.
Now, these are good players. They're fantastic players, but they don't
have this improvement when you look at percentage score.
By the way, when we ask coaches, coaches believe that they actually have an
improvement in percentage, not just in absolute numbers.
So, what happens is we have a team. And we all think that I'm the clutch
player. So, therefore, you pass me the ball, I
take more shots, everybody's happy. There's a self-fulfilling prophecy, in
which I act on our belief, but I actually don't get any better.
Now, you couldn't argue, you could argue against it.
And you could say you know what? These clutch players are really getting
better, but what happen is the defense also knows about.
So, now if I'm the clutch player, everybody passes to me, the defense knows
about it and they're going to protect me to a higher degree.
So, the fact I don't succeed more is not because I didn't get better, it's because
the defense was ready for it and they got better.
So, we looked at that as well. We looked at free throws.
And now there's no role for defense, you're just standing there and would you
do more? So what happened?
In the last five minutes, the clutch players get more points?
Absolutely. Do they get better percentage?
Not at all. They get the ball passed.
They try more frequently. They get far more frequently, they go to
the line more often. They take more shots, but do they do any
better? Only in an absolute way, not in the
perceptive.