For the EVOLution of Business

Put Peer Pressure To Work For Equity and Sustainability with Professor Robert Frank

Episode Summary

Ever feel that your individual actions won't make a difference? Your behaviors DO influence others, AND as they change, it will multiply to influence even more people. Plus, our own small behavior changes also commit us to transform our identities and can make us better advocates, allies and citizens. Inequality and climate change might be the two greatest challenges of our time and Professor Robert Frank believes that we can "put peer pressure to work" on both of these issues at the same time, harnessing behavioral contagion for a more equitable and sustainable future. Plus, in these divided times, don't miss his advice on how to use questions to engage in more productive conversations that might actually change minds. In addition to teaching at Cornell, Robert Frank worked with Nobel Prize winner Richard Thaler in pioneering behavioral economics, is a former New York Times columnist and has written books translated into 23 languages. One of those books, The Darwin Economy, sparked my own interest in bringing evolutionary principles to business and I can trace countless ideas from my forthcoming book "For The EVOLution of Business" to seeds planted while reading Professor Frank's work. In this episode, we discuss his earlier work, especially "The Darwin Economy" and "Success & Luck" and in Part 2 of our conversation, we'll discuss his newly-released book "Under The Influence." Professor Frank is the Henrietta Johnson Louis Professor of Management and Professor of Economics at Cornell's Johnson Graduate School of Management and a Distinguished Senior Fellow at Demos. For more than a decade, his "Economic View" column appeared monthly in The New York Times. He received his BS in mathematics from Georgia Tech, and then taught math and science for two years as a Peace Corps Volunteer in rural Nepal. He holds an MA in statistics and a PhD in economics, both from the University of California at Berkeley. His papers have appeared in the American Economic Review, Econometrica, Journal of Political Economy, and other leading professional journals. His books have been translated into 23 languages, including Choosing the Right Pond, Passions Within Reason, Microeconomics and Behavior, Principles of Economics (with Ben Bernanke), Luxury Fever, What Price the Moral High Ground?, Falling Behind, The Economic Naturalist, The Darwin Economy, and Success and Luck. The Winner-Take-All Society, co-authored with Philip Cook, received a Critic's Choice Award, was named a Notable Book of the Year by The New York Times, and was included in Business Week's list of the ten best books of 1995. Frank is a co-recipient of the 2004 Leontief Prize for Advancing the Frontiers of Economic Thought. He was awarded the Johnson School's Stephen Russell Distinguished teaching award in 2004, 2010, and 2012, and its Apple Distinguished Teaching Award in 2005.

Episode Notes

[1:30] The inspiration for Professor Frank's latest book "Under The Influence" and why behavioral contagion is ripe for innovation

[3:45] Why the harm of second hand smoke are more about peer influence than actual lung damage

[10:45] How payroll taxes dis-incentivize hiring, and why we should tax  behaviors with negative consequences (i.e. smoking) instead

[12:00] Why peer influence was evolutionarily adaptive to our survival

[17:00] The Toyota Prius and we should embrace "virtue signaling" - even if your individual impact is small, you'll influence others, and each person you influence will influence even more! Plus, each behavior you change also changes your identity and makes you more likely to make more changes.

[23:30] How sentiments on same-sex marriage changed so quickly and how we might apply this to other social movements - race relations, #MeToo

[32:00] Why do we tip? (Even when we're on vacation and will never see the waiter again)

[36:30] Harnessing peer pressure to repair the social fabric and increase civic engagement

[41:00] How intrinsic motivation might ultimately develop through cultural and social influence

[43:30] How bidding wars make us work longer hours but don't make us any better off

[50:00] When regulation can make us all better off

[54:30] Success is relative and life is graded on a curve

[57:00] How using peer influence to reduce inequality would also tackle climate change

[1:02:00] "The people who resist raising taxes think it would make them worse off...they'll have less money to spend on the things they want, nobody would deny that...but your ability to bid for the things you want depends on your RELATIVE purchasing power, so the same penthouse apartment will end up in the same hands as before."

[1:06:00] Would you rather live in a low tax world where the rich can afford a Ferrari, but there are potholes in the road, or a higher tax world where the rich can only afford a Porsche, but there is money to invest in infrastructure for well paved roads?

[1:10:00] Having more productively persuasive conversations with good questions

[1:13:15] Using questions to induce gratitude for lucky breaks can make people more likely to give back