Are rules made to be followed—or meant to be broken?

Often, the answer will depend on culture and the context in which people make decisions.

In this episode of Choiceology with Katy Milkman, we look at how carefully people in different contexts follow social norms, rules, and procedures. We'll also see how strict and relaxed cultures affect the quality of our decisions—and how to find the sweet spot depending on your goals.

Professional kitchens have historically been challenging work environments: high standards, long hours with low pay, and a strong hierarchy of cooks in the kitchen. "Yes, chef" was the only appropriate reply to higher-ranked chefs when Simon Rogan came through the ranks during the 1980s and '90s—a time when kitchen culture was tight and uncompromising. Today, Simon is working hard to change that culture across his restaurant group.

Simon Rogan is a chef and restaurateur in the U.K. whose flagship restaurant, L'Enclume, has three Michelin stars and also holds a Michelin Green Star for its sustainable practices. Simon also runs a culinary program for young chefs called the Academy by Simon Rogan.

Next, Katy speaks with Michele Gelfand about her research on tight and loose cultures and their impact on decision-making in different contexts.

You can learn more from Michele’s paper “Differences Between Tight and Loose Cultures” and take the quiz to determine if you tend to lean tight or loose.

Michele Gelfand is the John H. Scully Professor in Cross-Cultural Management and Organizational Behavior at Stanford University. She’s also a member of the National Academy of Sciences and the author of the book Rule Makers, Rule Breakers: How Tight and Loose Cultures Wire Our World.

Choiceology is an original podcast from Charles Schwab.

If you enjoy the show, please leave a rating or review on Apple Podcasts.

Important Disclosures

The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.

Data contained herein from third party providers is obtained from what are considered reliable source. However, its accuracy, completeness or reliability cannot be guaranteed and Charles Schwab & Co. expressly disclaims any liability, including incidental or consequential damages, arising from errors or omissions in this publication.

All corporate names and market data shown above are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Supporting documentation for any claims or statistical information is available upon request.

Investing involves risk including loss of principal.

The book How to Change: The Science of Getting from Where You Are to Where You Want to Be is not affiliated with, sponsored by, or endorsed by Charles Schwab & Co., Inc. (CS&Co.). Charles Schwab & Co., Inc. (CS&Co.) has not reviewed the book and makes no representations about its content.

Apple, the Apple logo, iPad, iPhone, and Apple Podcasts are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.

Spotify and the Spotify logo are registered trademarks of Spotify AB.

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In this episode of Choiceology with Katy Milkman, we look at how framing a decision based on what you stand to lose versus what you stand to gain affects your tolerance of risk.

Luis Green was a contestant on the popular TV game show Deal or No Deal. The game is largely one of chance, but there are moments during play where the contestant has an option to accept a cash offer to quit. At one point in the game, Luis was offered $333,000 to simply walk away. A guaranteed win! It seems like an obvious choice. But as you’ll hear from the story, there are other factors that influenced his decision.

Katy illustrates these factors with a version of a famous experiment. Volunteers are presented with two differently worded but mathematically identical scenarios. A simple shift from framing the scenario as a potential gain to one of potential loss results in starkly different choices from the volunteers.

Next, Katy speaks with special guest Daniel Kahneman about the underlying theory that explains human behavior in these types of situations. Daniel Kahneman served as professor of psychology and public affairs emeritus at the Woodrow Wilson School and the Eugene Higgins Professor of Psychology Emeritus at Princeton University. He was awarded the 2002 Nobel Prize in Economics for his pioneering research with Amos Tversky. Their work helped establish the field of behavioral economics. Kahneman also wrote the bestselling book Thinking, Fast and Slow.

Finally, Katy speaks with Colin Camerer about some of his favorite studies on risk seeking in the domain of losses, as well as practical approaches for avoiding this less-than-ideal behavior. Colin Camerer is the Robert Kirby Professor of Behavioral Finance and Economics at the California Institute of Technology, where he teaches cognitive psychology and economics. You can read his paper “Prospect Theory in the Wild: Evidence from the Field” here.

Choiceology is an original podcast from Charles Schwab.

If you enjoy the show, please leave a rating or review on Apple Podcasts.

Important Disclosures

The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.

Data contained herein from third party providers is obtained from what are considered reliable source. However, its accuracy, completeness or reliability cannot be guaranteed and Charles Schwab & Co. expressly disclaims any liability, including incidental or consequential damages, arising from errors or omissions in this publication.

All corporate names and market data shown above are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Supporting documentation for any claims or statistical information is available upon request.

Investing involves risk including loss of principal.

The policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party.

The book How to Change: The Science of Getting from Where You Are to Where You Want to Be is not affiliated with, sponsored by, or endorsed by Charles Schwab & Co., Inc. (CS&Co.). Charles Schwab & Co., Inc. (CS&Co.) has not reviewed the book and makes no representations about its content.

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When someone asks, "What's your favorite restaurant?" odds are you're inclined to recommend a place you've eaten at recently—even if it's not really your favorite.

It's just top of mind.

Why do we weigh recent events so heavily? And how does this tendency impact important decisions, like whom to vote for or how to conduct medical procedures?

In this episode of Choiceology with Katy Milkman, we look at a phenomenon that can cause us to overweight recent events compared to earlier events and make suboptimal decisions.

The 1968 presidential election was one of the closest elections in American history. Following an eventful year of civil unrest, war, and high-profile assassinations, eleventh-hour political machinations from Lyndon B. Johnson and Richard Nixon majorly impacted results. "October surprises," or last-minute revelations in the days before a November election, can weigh heavily on voters' minds at the polling booths. John A. Farrell documents the surprising events leading up to 1968 Election Day and President Richard Nixon's narrow victory.

John A. Farrell is a historian and celebrated political biographer. He is the best-selling author of Richard Nixon: The Life, and his latest book is Ted Kennedy: A Life.

Next, Katy speaks with Manasvini Singh about her research on recency effect and its impacts on physician decision-making in the delivery room. You can learn more in the Science paper Manasvini authored, titled "Heuristics in The Delivery Room."

Manasvini Singh is an assistant professor of social and decision sciences at Carnegie Mellon University. Her research focuses on topics at the intersection between decision theory and health policy.

Choiceology is an original podcast from Charles Schwab.

If you enjoy the show, please leave a rating or review on Apple Podcasts.

Important Disclosures

The comments, views, and opinions expressed in the presentation are those of the speakers and do not necessarily represent the views of Charles Schwab.

Data contained herein from third party providers is obtained from what are considered reliable source. However, its accuracy, completeness or reliability cannot be guaranteed and Charles Schwab & Co. expressly disclaims any liability, including incidental or consequential damages, arising from errors or omissions in this publication.

All corporate names and market data shown above are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Supporting documentation for any claims or statistical information is available upon request.

Investing involves risk including loss of principal.

The policy analysis provided by the Charles Schwab & Co., Inc., does not constitute and should not be interpreted as an endorsement of any political party.

The book How to Change: The Science of Getting from Where You Are to Where You Want to Be is not affiliated with, sponsored by, or endorsed by Charles Schwab & Co., Inc. (CS&Co.). Charles Schwab & Co., Inc. (CS&Co.) has not reviewed the book and makes no representations about its content.

Apple, the Apple logo, iPad, iPhone, and Apple Podcasts are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.

Google Podcasts and the Google Podcasts logo are trademarks of Google LLC.

Spotify and the Spotify logo are registered trademarks of Spotify AB.

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