38. Sendhil Mullainathan Explains How to Generate an Idea a Minute (Part 2)

Steven Levitt (0:04)

In this week's episode, I continue my conversation with my University of Chicago colleague, Sendhil Mullainathan, an economist, data scientist and MacArthur Genius Award winner, who has remarkable talent both for generating ideas and explaining those ideas in a way that anyone can understand.

SPEAKER_2 (0:22)

Welcome to People I Mostly Admire with Steve Levitt.

Steven Levitt (0:29)

Sendhil has so many interests that in the first half of our conversation, that's last week's podcast episode, I didn't even manage to get to the topics he's thought about most. So if you missed last week's episode, no worries, the order of the two episodes doesn't matter. But in this week's episode, I pick up in the middle of our conversation with me telling Sendhil about my first reaction to hearing that he had written a book entitled Scarcity.

One of the things I found so unbelievable about that book is that I saw the title and it's called Scarcity.

I thought to myself, this is so arrogant because economics is the study of Scarcity. For the last 20 years, we've all been studying Scarcity. So who does Sendhil think he is, that he's going to have something new to say? And I read the book and I'm like, wow. Sendhil had something new to say. So first tell us what you had new to say and then, I think, bring it home with the experiments.

Sendhil Mullainathan (1:26)

So economists study the physical fact of Scarcity. Everything is scarce. You buy something, you're not buying something else. There's a constraint. What we are studying here is the psychology of Scarcity, the feeling of having too little.

And the hypothesis is that when you have too little of something, that tends to capture your attention. Your mind automatically goes towards it. When you're very busy, your mind goes towards the things taking up your time, and the deadlines, the things that are due. For the poor who are scarce in money, their mind automatically goes towards, oh my God, will I be able to make rent? And for me, the most satisfying thing about the book, it's the sheer amount of feedback I've gotten from people who have experienced poverty or who are experiencing poverty, saying, this captures my experience of being poor. And I've had periods of poverty, and that's what you feel. Your mind just keeps going to this thing. So I'll give you the example. This is a study not from the book. This is with Anuj Shah. And what we did was we re-ran the same word study that we just did around the word sleep.

But we ran it with a new set of words.

Steven Levitt (2:46)

Sendhil's referencing a study we talked about in part one of this interview.

Sendhil Mullainathan (2:49)

If you tell people a series of words like bed, rest, awake, nap, dream, wake, doze, snore, slumber, blanket, snooze, tired.

Steven Levitt (3:07)

Things that revolve around sleep, but you don't actually say the word sleep. And you ask people to recall the words, 50% of people will think you said the word sleep. You can induce a memory.

Sendhil's now talking about rerunning that same study, but instead of using words that relate to sleep.

Sendhil Mullainathan (3:25)

There are words like cash, pay, loan, dollar, gas, grocery.

For rich people, if you give them that list, there's no word that they remember having heard. That wasn't there. They remember some of these words, but they don't make up a word. But for poor people, when you give them the same list, a huge fraction of them remember having heard the word money. Because for the poor, you hear grocery, they think money. You hear gas, they think money. And it's like many roads lead back to money. The consequence of this is that if your mind was a processor, like a computer processor, a fraction of it, beyond your control, is constantly churning on these concerns about money, which obviously makes it much harder to think about anything else.

Steven Levitt (4:11)

I love these studies. Can you tell the one about when you bring people into the lab and you tell them not to eat beforehand?

Sendhil Mullainathan (4:19)

Oh yeah, yeah, this is great. People were brought into the lab, everyone's hungry when they show up, but some of them were given some food and now they're less hungry. And they're all given the same word search task. Imagine a grid of letters and you have to look for a word. And we say, okay, first word, cookie. And so you search for cookie.

Second word, tent. And what you're really testing is after you've seen the word cookie, how long does it take for you to find the word tent? If you're not hungry, whatever, it's just another word. Just go right along. If you're hungry, it takes much longer to find the word tent because your mind is still on that cookie. Not even that real cookie, but those letters C-O-O-K-I-E.