A Sticky Situation: With Guests Richard Thaler, Wendy Wood & Susan Budowski | Summary and Q&A

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December 5, 2023
by
Charles Schwab
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A Sticky Situation: With Guests Richard Thaler, Wendy Wood & Susan Budowski

TL;DR

Friction, or the barriers that exist in our way, can significantly impact our decisions and behavior, whether it be in purchasing products, canceling subscriptions, or voting.

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Questions & Answers

Q: How does friction affect our decision-making in customer service interactions?

Friction in the form of long wait times, confusing phone menu options, and frequent call disconnections can frustrate customers and deter them from seeking assistance or resolving their issues.

Q: What are some examples of friction in the world of time shares?

Friction in time shares can manifest in complex contracts, hidden fees, and difficulties in canceling agreements. These barriers make it challenging for owners to sell their stake or get out of their contracts.

Q: How can friction influence our voting behavior?

Friction, such as the need to find childcare or lack of easy transportation options to polling stations, can deter people from voting. Simplifying the voting process and reducing barriers, such as offering online or mobile voting options, can help increase voter turnout.

Q: How can friction be used to promote positive habits and diminish negative ones?

By introducing friction into negative behaviors, such as placing unhealthy snacks out of reach or making it harder to access social media, individuals can make it easier to resist these temptations. Conversely, reducing friction for positive habits, like having exercise equipment at home, can make it more likely for individuals to engage in these behaviors.

Summary & Key Takeaways

  • Friction, in the form of poor design, complex bureaucracy, or intentional barriers, often hinders our progress when interacting with customer service, making purchases, or canceling subscriptions.

  • Examples of friction in real life include long wait times on phone calls, complex rebate forms, and difficult cancellation processes.

  • Friction can also affect decisions in the world of time shares, where the ease of getting into a time share agreement contrasts with the challenges of getting out of complicated contracts.

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