Katy Milkman: We've asked some volunteers to imagine having to deliver two really bad pieces of news to a friend.
Speaker 2: Do we need to start over?
Speaker 3: Yeah, sorry, guys. Let me just turn this off.
Katy Milkman: To make the story memorable, we've asked them to imagine they've been pet-sitting for that friend. And due to a tragic accident, both Goldie and Bubbles passed away under their care.
Speaker 4: Wait, what?
Speaker 3: Don't worry, it's just a thought experiment. But yes, both of the fish died while you were looking after them.
Speaker 4: Oh, that is horrible.
Speaker 5: I would feel terrible if I did something like that.
Speaker 3: OK, but what would you prefer in terms of delivering the news? Would you want to do one bad piece of news on Monday? Like, "Sorry about Goldie." And then on Tuesday, "Bubbles also didn't make it." Or would you just rip the Band-Aid off and just tell them the bad news all at once on a phone call?
Speaker 2: I'm going to go with the option rip the Band-Aid off and tell all the news at one time.
Speaker 4: Totally agree. Why prolong the pain?
Katy Milkman: Everyone agrees it's best to get all the bad news over with in one go. On the flip side, we asked them to imagine giving out joy all at once versus in bite-sized pieces.
Speaker 3: All right, so this situation is a lot nicer. So imagine that you have a limited amount of money to spend on a gift for your romantic partner. So you can afford to buy a dozen roses a year, but would it be better to surprise them with a dozen roses all at once or spread it out so that you're surprising them with one rose every month?
Speaker 5: I mean, it's not as big a deal to get a single rose, but the romance of it would multiply, I think, if you did that one rose a month for a year than a dozen at a time.
Speaker 2: So casting visions of The Bachelor aside, yeah, I think I'd agree that's not a bad idea actually. I think I'd get more points for doling them out a little bit at a time.
Katy Milkman: Again, there's not a lot of disagreement. This time, the volunteers want to dribble out the roses over time. What this tells me is that people have a strong intuition about a simple strategy that can help you minimize the pain you feel from bad experiences …
Speaker 3: That's the worst.
Katy Milkman: … and maximize the pleasure you get from joyful ones.
Speaker 2: I'd want a rose a month, I think. Twice, thrice.
Katy Milkman: I'm Katy Milkman, and this is Choiceology, an original podcast from Charles Schwab. Choiceology is a show about the psychology and economics behind our decisions. We bring you true and surprising stories about real choices, and then we examine how these stories connect to the latest research in behavioral science. We do it all to help you make better judgments and avoid costly mistakes.
Sally Millington: I was just so ecstatic. I was thinking, crikey, I'm actually doing this. I'm all right.
Katy Milkman: This is Sally.
Sally Millington: I'm Sally Millington, and I'm from York in the U.K.
Katy Milkman: Sally is remembering an experience at a climbing gym, doing something she'd never done before.
Sally Millington: Got myself ready when I arrived, and a familiar friend reared its head: I got clammy hands, my heart rate increased, and I felt nerves. And then entering into the gym, it was quite busy, so there were a lot of people there to potentially see me fall off. But we started off on some low-level, teeny tiny little footholds, and my legs were shaking as they stretched out and balanced onto the tiniest holds that no human should ever really be able to balance themselves on. My hands were aching from gripping so tightly onto the different handholds. I was laser-focused on the experience because I was so bothered about not falling off and putting the instructions into practice and making sure I was doing what the instructor said. When I finally came down afterwards, the sense of adrenaline was phenomenal. The feeling of achievement, the sense of pride, the idea that I can do tough things, it was fun and I felt alive, I suppose, because it had brought so many senses to the fore of my mind at the time.
Katy Milkman: Before this experience at the climbing gym, Sally would have described herself as …
Sally Millington: Lacking in self-belief in a lot of areas of my life actually. So I know at work I was good at my job, but I perhaps didn't believe it myself. And the same in thinking about planning some of the things on my dreams list, if you like. I maybe didn't believe I could pull that off. I didn't think I could make that happen. I don't think I was a very confident person before.
Katy Milkman: But something about dangling from a wall she'd climbed up herself inspired Sally. It got her thinking about how rarely she was trying new things.
Sally Millington: I just thought, I want a bit more of this in my life. There were often things on the horizon, such as going on holiday, which was always something to look forward to and think, oh, this is a new experience, going somewhere I've never been before. Wandering the streets of somewhere, having new food, immersing myself in a culture. But other than that, I don't think I was doing a huge amount of new things, to be honest.
Katy Milkman: Instead of saving new experiences only for her vacations, which might be few and far between, Sally decided that she wanted to regularly program more new things into her life. Her job had been in learning and development, and so she borrowed some ideas she knew mattered for successful goal-setting from work.
Sally Millington: I set myself something specific, measurable, achievable, realistic, and time-bound so that it would make sure I got out of my comfort zone, I did more things I'd never done before, I explored the world, and I lived like a child basically.
Katy Milkman: Her goal was to try something new every week for a year. For 52 weeks, Sally tried 52 things she'd never tried before. Some were big and daring. Some were small and mundane.
Sally Millington: I sat in a hammock. I've never got myself into a hammock before. I know lots of people will have done this so many times, but that moment of gingerly edging myself into that teeny tiny roll of fabric and wrapping it around myself and not falling out and then just lying back and trying to feel relaxed in it was quite a nice experience, a good way to spend an afternoon.
Katy Milkman: Of course not every experience was a hit.
Sally Millington: I went to a gong sound bath. So it was one of those immersive experiences where it's all around the percussion instruments that are played. And I thought I was going to enjoy it, but unfortunately, someone started snoring quite early on, so I couldn't really immerse myself into that experience. I've not been back.
Katy Milkman: But the moment this collection of new adventures started to feel like something more than just keeping busy came from a community hall flyer, which read …
Sally Millington: "Come along, release your inner raver and your inner Buddha." And it piqued my interest, and I thought, well, OK, this sounds a bit different. Let's go and give it a go.
Katy Milkman: Inside the community hall, it was dark, but pierced with flashing lights and loud music. It had a nightclub feel, but people weren't there to drink. They were there to dance.
Sally Millington: The first thing we did was warm up. So for half an hour, I'm in this big hall with a lot of strangers, and we were told to just move, just move around and dance. So I started off by shuffling my feet side to side. I probably nodded my head a little bit, but I felt hugely awkward. It was a really self-conscious moment, and it felt utterly bizarre.
Katy Milkman: Their next instruction was to find flow with the rhythm of the music. First with their feet, then their knees and hips.
Sally Millington: Then we moved on to the second rhythm. This was staccato music, so it was all broken beats and syncopated rhythms. And at this point I thought I looked like a really bad martial artist here. I'm just throwing out shapes, jerking around like goodness knows what.
Katy Milkman: But after that, when attendees were asked to dance with one another, something clicked for Sally.
Sally Millington: I just suddenly realized, nobody is looking at me. Seeing other people crawling across the floor, rolling across the floor, throwing shapes like they'd never thrown them before, to feel it, to live it, and to embrace the joy of realizing nobody's looking at me. I became an absolute whirlwind on that empty space on the floor. It was so liberating. It completely loosened up my inhibitions and massively made my confidence grow. As I just joined in with everybody, nobody cared.
Katy Milkman: It was 2018, and Sally successfully completed 52 new things that year. From performing stand-up comedy to making her own pottery, from trying acupuncture to playing cricket, and it didn't stop there.
Sally Millington: So I felt hugely happy at the end of that year and thought, "I'm going to do this another year." And it's spiraled.
Katy Milkman: While she does still use her vacation time to check off some of the more remarkable things on her list, like seeing snow monkeys in Japan or staying in an ice hotel, she doesn't save all of her adventures for those trips. Instead, she spreads the joy of new adventures more evenly across each year.
Sally Millington: It's so easy to think I'll just save them all and do it all at the end of the year or when I'm on holiday. I've decided to do things now, crack on with them.
Katy Milkman: This shift to spreading out fun events over time has made Sally happier, she says. She's more active, less passive, and doesn't let life happen to her anymore. And it's changed her outlook on life.
Sally Millington: I feel like I've perhaps slowed down time in a weird way because if I look back over the years, I wonder how did I fit all of this in? Whereas sometimes if we do the same thing over and over again, things can go by in the blink of an eye. Whereas I've got memorable markers now. I've got more joy that I can look back on and more to look forward to. And I feel like life's got a bit more meaningful for me. Not to make that sound as though it's something big and grand, but for me personally, I find there's a lot more meaning because I'm doing more things.
Katy Milkman: Sally Millington dubbed her project Challenge Fifty-Two. One of her new experiences was creating a website. You can find a link to that site and find out more about Sally in the show notes and at schwab.com/podcast.
The idea that new and positive experiences can make you happier is pretty obvious and unsurprising. But many of us save special experiences like going to new places, trying new foods, or taking in a show for vacations, bundling them all together in one holiday and then returning home to normal life without much exploration or variety afterwards. These bursts of novelty can be great fun, but once they're over, the joy fades fast. What we see in Sally's story and from research is that there's value in unbundling or unpacking the kinds of treats we tend to save up for when we go on a vacation. People can actually maximize their happiness by separating and spreading out enjoyable events much more over time rather than cramming them all into two-week holidays.
Conversely, bundling bad or unpleasant events, grouping them together in time or in your mind, can diminish the total negative psychological impact of those events. Deliberately editing your life in this way to trickle out good experiences and condense bad ones is called hedonic editing. It's a strategy that takes advantage of mental accounting, which you may recall from previous episodes of Choiceology relates to our tendency to treat resources like time and money as if they aren't fungible, but belong in categories. And hedonic editing can help you perceive gains and losses differently, in a way that's more advantageous to your happiness.
Here to talk with me about this is Ellen Evers, who along with collaborators Alex Imas and Christy Kang, has studied hedonic editing. Ellen Evers is an associate professor of marketing at the Haas School of Business at the University of California at Berkeley. Hi, Ellen. Welcome to Choiceology and thank you so much for joining me today.
Ellen Evers: Hey, Katy, I'm super excited to be here. Thanks for inviting me.
Katy Milkman: Well, I'm super excited to talk about the topic of hedonic editing. And actually just wanted to ask you to start by explaining what hedonic editing is. It's not exactly named in a way that makes it intuitive. Could you summarize the idea for us?
Ellen Evers: My take on the idea boils down to something like during periods of time we can experience a lot of things that are either good or bad, and really the question is how do we remember those things in a way that makes us the happiest? So I can have a terrible day where maybe I have a flat tire in the morning, I show up late for my first meeting, a bunch of other stuff goes wrong. Do I want to remember all those things as individual events, or is it better for my well-being to just think, hey, that was a terrible day, tomorrow is another day? So it's really about how do we categorize these instances at an abstract high level or as small little instances.
Katy Milkman: If you think about what the optimal hedonic editing structure would be, figuring out how you might want to categorize experiences and lump them together in order to maximize your happiness. Could you talk a little bit about what the canonical theories have said about what people should be striving to do?
Ellen Evers: By far, what people have mostly relied on is predictions following from prospect theory.
Katy Milkman: And just a reminder for our listeners, prospect theory is the theory we've talked about before on Choiceology that describes how people make decisions involving risk and uncertainty. And it says, for instance, that people evaluate all decisions relative to a current reference point or whatever they have right now and that they're much more sensitive to the first dollar or unit of happiness they gain or lose from an experience than to the 10th or 20th or millionth.
Ellen Evers: Yes. So prospect theory is really mostly studied for monetary outcomes. And in those cases, it's really, really clear that people are happier with a bunch of small monetary outcomes rather than one single big one. So people are happier if they get 100 bucks twice than if they would get 200 bucks at once. And the flip side is true for negative things. People are less unhappy if they lose $200 at once rather than lose $100 twice. So if you think about daily life as something that is similar to making or losing money, then it leads to really, really straightforward predictions. You would be happier if you group a bunch of bad outcomes together as one big bad outcome, and you would be happier if you split up a bunch of good small outcomes and remember those as single good small outcomes rather than one big good outcome.
Katy Milkman: I love that description. And I think what you're saying, Ellen, is this idea of segregating our gains but aggregating our losses to maximize our happiness is because of that return that we have to a reference point after each experience. Which means when I eat an M&M today, it's a new experience that's psychologically independent from the one I had when I ate an M&M last week. And also because when we experience a positive outcome, we have this psychological decrease in benefits, which means the 17th M&M you eat in a row doesn't taste as good as the second M&M you eat. And the same is true in the domain of losses, right?
Ellen Evers: Yeah, definitely. I think your example of the M&M's is a great one, where you are happier if you get five M&M's a day for a week than if you have to eat 35 on one single day. On the flip side, I don't know, gross M&M's, something bad, bugs.
Katy Milkman: Electric shocks. We could do a, thinking of classic …
Ellen Evers: Yeah. But it's better to get them out of the way and get 10 electric shocks at once rather than have one a day for 10 days. That feels worse. So that's the logic, bad stuff, you just want to do it all together at once. Good stuff, you want to split it up to maximize your happiness.
Katy Milkman: The next thing I wanted to just ask is to think a little bit about where you think hedonic editing or this hypothesis that people are maybe going to be better off if they aggregate their losses and segregate their gains. Where do you think that's most relevant to your typical person?
Ellen Evers: I would say as an individual, it's useful, especially if you need to do fun stuff and unfun stuff, it's useful both to know, hey, how do I design my schedule in a way that looking back on it, I'm the most happy as possible? I also think it could be useful to think about coping strategies. Yeah, if a lot of bad stuff happens at the same time, is there a way I can reflect back on those that helps me handle all the negativity? So that's, I think, what I would say on an individual level.
Katy Milkman: I love that. Ellen, one of the really interesting things I think about hedonic editing is that for people to do it requires quite a lot of self-awareness. Could you talk a little bit about that aspect of this theory and whether it's right or wrong that people understand themselves well enough to hedonically edit?
Ellen Evers: Yeah. So that's a really good question and something we haven't really talked about yet, which is there's two sides to this, which is one, what makes people happier? Getting a bunch of bad things all at once so they can see it as one event versus having a bunch of spread out small bad events. And the second thing is, do people realize that? So given a choice, would you rather have all the bad stuff at once, or would have it at separate timeframes? And that is a question that has been debated quite a bit, where sometimes when you give people a choice, it looks like they behave in a way consistent with prospect theory.
Katy Milkman: Meaning they hedonically edit and they try to combine their losses?
Ellen Evers: Yes, they try to combine the losses and segregate the gains, so spread out the gains. But there's also papers who essentially find the opposite. And one of the studies I've run, we basically argued, hey, people do have that insight. They realize that getting a bunch of bad stuff at once is probably making them happier, or getting a bunch of good stuff spread out will also make them happier. But going back to the similarity point, only if you can easily combine the two. So if you already need to have a negative food-related outcome, and then you are asked, "Hey, when do you want this other negative food-related outcome?" People are like, "Oh, let's just get it done at the same time."
Katy Milkman: So a negative food-related outcome would be like eating something gross or …?
Ellen Evers: Yeah. Or like dropping a burrito and realizing your milk is spoiled, anything that it feels similar.
Katy Milkman: You're just putting these in a similar category. So food could be a category?
Ellen Evers: Yeah. Or getting a bad grade for a midterm, getting a bad grade for a paper. Those are very, very similar.
Katy Milkman: Got it.
Ellen Evers: Getting a bad grade for your midterm and dropping your burrito, those are really, really different, and it's really hard to combine them into one category. So in one study we essentially asked people, "Hey, if this one bad thing happens, when do you want this other bad thing to happen?" If people are really, really good at predicting how they'll feel, they should always say, "Oh, one bad thing happens, I want the other bad thing to happen today and just be done with it."
Katy Milkman: Yeah, rip off the Band-Aid.
Ellen Evers: Exactly.
Katy Milkman: Or rip off two Band-Aids, I guess, in this case.
Ellen Evers: Yeah. Or if a good thing happens, actually I want the other good thing to happen next week. I want to split them out so I maximize my happiness. But what we did in this study is we also varied similarity. So one could be, hey, you got a bad grade for your midterm. When would you want to learn that you also got a bad grade for the paper? Or you got a bad grade for a midterm, and you drop your burrito. When do you want to drop your burrito? So very, very similar or very, very different. And there we find that similarity plays a really big role. So as long as mentally, psychologically, it's easy to combine things into one thing, then people prefer getting the negative things at once and spreading out the positive things. However, if the two things are super different, then that pattern goes away.
Katy Milkman: That's really interesting. And when you think about that pattern, do you think it's a mistake? From the way you're describing it actually sounds like people are pretty sophisticated, and our mental gymnastics just don't allow us to combine those bad things that are different. And so there actually maybe isn't this prospect theory-like benefit of dropping your burrito and getting a bad grade on the test on the same day, or having the stock market go down and losing your job. Maybe those things feel different enough that combining them isn't giving you some psychological benefit over having them happen on different weeks.
Ellen Evers: Yeah, so I think it really depends on how you interpret that question. So I personally think the most defensible take is that people are actually pretty sophisticated. And I don't think that's surprising. Depending on your age, you've been a person for a long time. You definitely have some insights in your life. So I think if anything, it would be crazy if we were bad at this. However, that does mean we can take a few steps back and manipulate how similar things look. And that has an effect. So really I think in real life it's super, super good and within the bounds of our rationality, people seem to be doing the right thing. However, if a bunch of annoying researchers show up, and they design studies in a way to trick you, then you can observe behavior that seems really, really irrational. But I think in general, it is a sophisticated approach that should work pretty well.
Katy Milkman: I'm curious, now that you've studied it, has it changed anything you do in your own life? Do you make decisions differently or try to segregate your gains and aggregate your losses in a different way?
Ellen Evers: A little bit. I do try to think about how do I want to remember things? But it's a much, much broader thing where I don't know, if you go on a holiday, and it's a great holiday and you do a bunch of events, how do I want to remember that for the rest of my life? And I do think it all boils down to this kind of human categorization, how do humans categorize these things? I'm more and more convinced that as a field, getting a better understanding of how humans categorize these things can really, really help us understand how they think about money, how they think about time, how they think about these experiences. And how we can use those insights to help people make better decisions, increase well being, etc.
Katy Milkman: I love that. And one last thing I wanted to ask you is if you have any advice for our listeners about how they can use these insights we've been discussing about hedonic editing to live a happier, better life. What could they do with this knowledge that might improve their outcomes?
Ellen Evers: By far, the most straightforward one, but also doable one, is really thinking about bad things that happen to you and how you may ruminate about those in a way that ends up being dysfunctional. I think those are the situations where taking a step back and thinking, "Hey, all of these bad things happened. Ss there a way I can see this as a single event that I can get over?" And of course you can say, "Oh, when you plan the next holiday trip, really make sure that you spread out the most exciting things." All of that is true. For me by far would be retrospectively thinking about bad things that happened and thinking about is there a way I can categorize this as a single bad thing that I can deal with and get over.
Katy Milkman: That's great advice. Well, I super appreciate you taking the time to talk with me today, Ellen. Thank you so much for sharing your wonderful research on hedonic editing, and I look forward to our next conversation.
Ellen Evers: Cool. Thanks for having me.
Katy Milkman: Ellen Evers is an associate professor of marketing at the Haas School of Business at the University of California at Berkeley. You can find a link to her paper on hedonic editing, which she co-authored with Alex Imas and Christy Kang, in the show notes and at schwab.com/podcast.
When it comes to investing, we know that people are often reluctant to sell losing positions and turn "paper losses" into real ones. But if you've mustered the courage to admit defeat and move on from a failed investment, consider cleaning out additional holdings that no longer fit your strategy or risk tolerance. It might be less disappointing than selling them separately. For more tips on mitigating the biases that could impact your portfolio, check out the Financial Decoder podcast. You can find it at schwab.com/FinancialDecoder or in your favorite podcast app.
What I hope you'll remember from this episode is that when life gives you roses, you want them to come one at a time. That is, you want to spread them out. But when life gives you lemons, it's better for them to come in lemon bouquets. Misery is worse when it's spread out, so that's to be avoided. In Niccolò Machiavelli's famous 16th-century text The Prince, he displays a strong understanding of hedonic editing. Machiavelli advises his reader, and I'm giving you a translation, "Do all the harm you must at one and the same time. That way the full extent of it will not be noticed, and it will give least offense. One should do good, on the other hand, little by little so people can fully appreciate it."
While Machiavelli gets plenty of things wrong, he gets this advice right. But what should you make of this in your life? I would encourage you to try to use these insights to maximize your happiness. Try to combine bad things. Think about them as coming in a package or category whenever you can. That bad performance on a test and bad play on the soccer field amounted to a bad week at school, not two separate bad things. And spread out life's joys as much as possible to maximize your happiness. See a show this weekend and take a zipline ride next month—don't package both together during your vacation. But I would be naive to stop there. It's also important to be on the lookout for manipulation, for the CEO who packages lots of bad news into a single announcement to minimize the reaction, or the politician who uses a similar ploy. Don't allow yourself to be tricked by those who follow Machiavelli's advice to do harm.
You've been listening to Choiceology, an original podcast from Charles Schwab. If you've enjoyed the show, we'd be grateful if you'd leave us a review on Apple Podcasts, a comment or rating on Spotify or YouTube, or feedback wherever you listen. You can also follow us for free in your favorite podcast app. And if you want more of the kinds of insights we bring you on Choiceology about how to improve your decisions, you can order my book, How to Change, or sign up for my monthly newsletter, Milkman Delivers, on Substack. That's it for this season of the podcast, but we'll have more new episodes for you starting in mid-August. I hope you'll join me then. In the meantime, there's a big back catalog of episodes for you to enjoy this summer. I'm Katy Milkman. Talk to you soon.
Speaker 8: For important disclosures, see the show notes or visit schwab.com/podcast.
