Speaker 1: Oh, I really sliced that. Oh, that's ugly.
Speaker 2: It's way deep in the trees. That's going to be tricky to get out of.
Speaker 1: Yeah. If it's all right with you, I'm going to take a mulligan and just give that one another try.
Speaker 2: OK. I won't add that swing, but listen, don't overdo it on the mulligans, all right?
Speaker 1: Don't worry. Now, that's looking better.
Katy Milkman: If you're a golfer, you may have found yourself taking the occasional mulligan, or do-over, so that a lousy shot doesn't ruin your entire game. In this episode, we explore how intentionally giving yourself some mulligans when you're working towards a tough goal can help you achieve more than you otherwise would.
I'm Dr. Katy Milkman, and this is Choiceology, an original podcast from Charles Schwab. It's a show about the psychology and economics behind our decisions. We bring you true stories, illuminating predictable quirks of human nature that can help or hinder you, and then we examine the latest research in behavioral science. We do it all to help you make better judgements and avoid costly mistakes.
Jeff Ryan: If you went into an arcade in the late 1970s, it'd be very loud, first of all. An arcade is dark and bright at the same time because there were 100 TVs all blaring, and most of the games gave you three lives. That was the big Space Invaders thing. You had three different chances to shoot all of the aliens, and then when the three lives were up, you were done.
Katy Milkman: This is Jeff.
Jeff Ryan: Hi, my name is Jeff Ryan.
Katy Milkman: Jeff is a writer and author and a gamer from way back when video games were still mostly played in arcades.
Jeff Ryan: When I was little, my dad would hold me up so I could see the screen so I could play games, and I wasn't very good at it, and I kept dying.
Katy Milkman: Turns out, this was by design.
Jeff Ryan: The goal of game-makers was to kill you as quickly as possible so that you could put another quarter in and get another three lives. You may get a minute or two minutes of gameplay. Really good players would get three or four minutes, at most five, and that was the goal. That was the dream to be able to get five minutes of entertainment from a quarter. People would line up behind popular games and put quarters on top of the machines or at the base of the screen to say, "This is me. I get the next game after you die because you will be dying in a matter of seconds, if not minutes."
Katy Milkman: The golden age of video arcades lasted until around 1983 when home video game consoles started to take over.
Jeff Ryan: I had a video game system no one ever heard of called the TI-99/4A. It was made by Texas Instruments, and it had a bunch of knockoff games like Munch Man instead of Pac-Man. Everyone got into the video game world in the early '80s. Coleco, one of the biggest stars of the early '80s, was the Connecticut Leather Company. They made leather goods and then got into video games.
Katy Milkman: Texas Instruments, Coleco, Atari, all jumped into the home video game market, with Atari being the most successful in the early days. But most of the home video games of that era were based on the arcade versions, Pac-Man, Space Invaders, Pitfall, all titles where you had a limited number of lives, and once you used them up, it was game over. But another company, a company known mostly for toys and playing cards, changed the video game experience for Jeff and millions of other players.
Jeff Ryan: Someone had a Nintendo Entertainment System and brought the box onto the bus to show off that he, in fact, had it.
Katy Milkman: This was in 1986, the first year that the Nintendo Entertainment System, or NES, was sold widely in the U.S.
Jeff Ryan: He's showing it off because on the back of the box are pictures of all of the other games that you could play for the NES. It was like our Sears catalog. There was Balloon Fight. There was Kid Icarus, and there was of course, Super Mario Bros., but anyone who bought a Nintendo Entertainment System got Super Mario Bros. for free.
Katy Milkman: For a while, Jeff could only imagine what it was like to play these games—until that Christmas.
Jeff Ryan: Yeah, so it's Christmas morning, my brother and I see a box under the tree. We know the shape. We know the dimensions. We know what's inside. We open it up, and it's the Nintendo Entertainment System. We pull out the system, and there is Mario and Duck Hunt in one cartridge in a black plastic sleeve. We put it right in the machine, push it down, it makes the nice little toaster-y sound, and we get to start playing. We were playing in the family room, which was off to the side, and it was a little cold in there because there were lots of windows, and it was in wintertime and wasn't insulated very well. But we didn't care about the cold because we got to play Mario over and over and over again.
Katy Milkman: The game captured Jeff's imagination and transported him and his brother to a fantastical world. He wasn't the only one either. Kids all over the country were falling in love with Super Mario Bros.
Jeff Ryan: When you start playing, there's a calypso sort of music, which along with the blue sky, makes you think that this is a fun game. You're having a really good time. You forget that it's Christmas, and it's dull and dreary and snowy outside.
Katy Milkman: And they played. A lot.
Jeff Ryan: The 1980s was a time before the phrase "screen time" had been invented, so we played a long time every day. I think some days Super Mario Bros. was a four-hour shift. It was like a part-time job.
Katy Milkman: Unlike the classic arcade games, there was something about Super Mario Bros. that made players stick with it for longer. We'll get to that, but first, a little walkthrough of the game itself.
Jeff Ryan: So there's a plot in Super Mario, and there's also what you do. Mario is your guy. You are Mario. The plot is to rescue the princess from a castle. What you do is go through an obstacle course, so long as you keep moving to the right and avoid being killed, you will eventually succeed. The first way you die is by a little mushroom man called a Goomba. You walk up to him. He walks up next to you, touches you, and you die. From three lives, you're down to two. "Oh, no, I died," but then the next time you see him, you jump to avoid him. You accidentally land on him, and you squash him, and he dies. "Aha! This is how you defeat a Goomba."
Then you see a brick, and you hit it, and it breaks. "Aha! I can break a brick." Then you see a question mark. You hit it, and you get a coin. "Aha! There's special bonuses." You find another one, you hit it, and you get a mushroom. The mushroom makes you big. "Aha! There's more things I can do with the question blocks." You're taught all of the different tricks in order in the way you're supposed to learn them.
Katy Milkman: In the very first part of the game, there's another trick, a hidden trick that, once it's revealed, makes all the difference.
Jeff Ryan: OK, I get the magic mushroom to make me twice my size. I jump over one, two, three, four green pipes. Then I start blasting the air. I start jumping up and trying to hit nothing at all, and in one of those jumps, I succeed in finding the hidden one-up mushroom, and I grab it before it falls off the cliff.
Katy Milkman: The one-up mushroom is a key feature of the game.
Jeff Ryan: At first, I thought it was a miscoloration. I thought that maybe every mushroom was a different color, and they all did the same thing. But then I realized that the colors were a code, that the yellow and green was the one-up mushroom, and that was much more valuable than just getting bigger because this let me have a whole other life.
Katy Milkman: The term "one up" actually comes from the pinball era. On pinball games where players could take turns, one up meant that it was player one's turn. "Two up" was player two's turn. But in Super Mario Bros., the game designer, Shigeru Miyamoto, and his team used it to denote an extra life. Remember that the arcade video games mostly gave you only three lives, and that was it. If you died three times, your game was over, and you had to put another quarter in or give up. In Super Mario Bros., you had the opportunity to gather extra lives to save them for more challenging parts of the game.
Jeff Ryan: Now, I have an extra life. I am much more equipped to go through the rest of my journeys. From then on, I was searching for mushrooms, and every time I found a magic mushroom, I'd be happy, but a little disappointed because what I really wanted was a one-up mushroom. The one-up mushrooms are rare. There are some tricks in order to get unlimited lives. You need to kick a turtle shell against a staircase over and over and over again, and each one will give you an extra life. But that feels too much like a cheat, for me at least. Knowing that the one-up mushrooms are out there was like knowing that someone would catch me if I had to jump out of a building.
Katy Milkman: It took game designers a while to realize that their goal was no longer to kill the players quickly.
Jeff Ryan: The point of the game wasn't just to win the game. The point of the game was to explore the game, to find all of the hidden secrets.
Katy Milkman: Miyamoto's innovations in Super Mario made the game a huge hit. Other game designers took note.
Jeff Ryan: And what Super Mario did was change the ultimate philosophy of gaming. Now, game designers were trying to hold the player's hand to get them through tough areas, and in an especially tough area, they would give players a one-up to say, "Hey, you may die." This became especially common in games designed for families and children. There are games of The Lion King and Aladdin that were released in the '90s that have some legendarily hard levels. To this day, adult gamers are like, "How do you get past this level with the lava or with the wildebeests?" And they can keep playing forever and ever because there's always a one-up to keep them going because they are going to die, and then they get to start the level all over again.
Katy Milkman: The learning and exploration approach that Super Mario Bros. rewarded had a profound influence on video game design, and the one-up extra life concept has since spilled over into the real world.
Jeff Ryan: Since so many people have grown up playing Super Mario and are in the Nintendo Super Mario ethos, the idea of the one-up mushroom represents another chance at life, and if you have a near death experience, you may think of your extra life, your new chance to live the way that you should be living as getting a one-up mushroom. Some people have actually gotten tattoos of the one-up mushroom to remind themselves that they maybe shouldn't be here and that they need to do better this time around. A lot of people have another chance at life and feel like they dodged a bullet. And getting that one-up mushroom tattoo is proof they're lucky to be here. I think it's inspiring. One of the great things about tattoos is that they're always in code. It's like dreams. What you see means something different to every person. But for gamers, we all know what the one-up mushroom means.
Katy Milkman: Jeff Ryan is the author of Super Mario: How Nintendo Conquered America. He's based in Bloomfield, New Jersey. You can find links to the book and some of his other work in the show notes and at schwab.com/podcast.
So far, we've mostly been talking about the value of extra lives or mulligans in games, but this concept of banking backups or do-overs or rainy-day money is important in real life too, as those tattoos suggest. My Wharton colleague Marissa Sharif studies the power of storing up do-overs, and she calls them "emergency reserves" in her research. Marissa has discovered that building these reserves into your life can help you achieve challenging goals. This may not sound surprising if you've benefited from a mulligan on the golf course. Who wouldn't prefer a second chance? But what's counterintuitive about Marissa's work is that she's studied a tactic that will let you give yourself those second chances when you really need them but keep you pushing yourself as hard as possible otherwise.
The conundrum she's solved is one that's quite familiar to most goal-setters. Goal researchers have shown that setting tough goals is critical to success, but if your goal is too difficult, and you find yourself struggling, you may give up. On the other hand, if your goal is too easy, or if you can take mulligans all day long, you won't push yourself. What's the secret to balancing those forces? That is what Marissa has figured out. Marissa Sharif is an assistant professor of marketing at the Wharton School.
Hi, Marissa. Thank you so much for coming on the show today.
Marissa Sharif: Hi, Katy. Thanks for inviting me. I'm excited to chat.
Katy Milkman: So I want to start by asking you if you could just define an emergency reserve. What is it exactly?
Marissa Sharif: Sure. So a goal with an emergency reserve is a goal that has some type of difficult reference point, but it also has some type of slack or flexibility around the goal that has some type of psychological cost. So the best way to think about it is through some examples. So imagine, for example, a goal of going to the gym seven days of the week with two emergency skip days, or think about a budget that has maybe $50 emergency per week or per month. It's basically just a goal that has some type of flexibility that has some type of cost associated with using it.
Katy Milkman: Could you describe some of your research showing that emergency reserves can help people achieve more?
Marissa Sharif: Yeah, sure. So, we've done lots of studies on this. My favorite study has been in the context of encouraging people to track their steps and reach an individualized step goal. So what we did is we had randomly assigned people to a few different conditions. We had a hard goal, which is reach your step goal. Let's say it's 10,000 steps. So reach 10,000 steps seven days of the week. An easy goal, which in this case would be reach your step goal, so maybe 10,000 steps, five days of the week. And then we had an emergency reserve goal, which would be reach your step goal. So reach 10,000 steps seven days of the week, but you have two emergency skip days. And so what we found is that people with these emergency reserve goals ended up taking more steps and reaching their step goal more often than both the easy goal and the hard goal.
Katy Milkman: I really love that study. Thank you for describing that for us.
Marissa Sharif: Yeah.
Katy Milkman: Could you talk a little bit about why it is that emergency reserves help people achieve more? Why it's so useful?
Marissa Sharif: Yeah. So there is two reasons, and the easy and hard goal help us understand why it's motivating. So the first reason is that there is some type of resistance to use the emergency reserves. For example, seven days of the week with two emergency skip days, what happens is that people strive to reach that difficult reference point. They try to reach their step goal every single day. And so prior research has shown that there's benefits of having these hard challenging goals for people to strive for. And so with these reserve goals, people are trying really, really hard to reach their step goal seven days of the week. And you might be thinking, "OK, they have this slack. They have this emergency reserve available. Why wouldn't they just use that? Why are they trying to reach their goal every single goal day?"
And what we suggest is that people are holding onto those emergency reserves. They're waiting for a more emergency situation or a better situation later on where they might need to use those. And so they're aiming for that difficult reference point, waiting for those situations to occur. And in some cases, they do occur, and they do need to use them, but in many situations, they don't occur, and they don't end up using them. So that's the first part. Having this difficult reference point and trying to resist using those reserves helps people try hard.
The second part is that having that emergency reserves helps people persist in the face of a failure. So hard goals are this double-edged sword in that they encourage people to try really hard, but also because they're hard, it's likely that people will have missteps. Life happens. That's just inevitable when we're pursuing these goals for so long and over time. And when that happens, when people experience these missteps, a lot of times they end up giving up. They feel like the goal's not attainable. So again, thinking about that harder goal, a goal that has you try to reach your step goal seven days of the week, with those goals if you end up missing one day, people are like, "What's the point of me continuing? I won't be able to reach the seven-day goal," and they just abandon, and they don't try to reach their step goal anymore.
And so what the emergency reserve does is it's this built-in failure system such that people can fail without really feeling like they violated their goal. They feel like it's still in sight. They can still make it. The goal's still attainable, and it helps them persist in those missteps.
Katy Milkman: I love that. So, if I were to try to summarize, I would say emergency reserves with tough goals stretch you, then you're a hoarder by nature, so you hoard the reserves and don't use them. And finally, if you do have a misstep, you have an excuse so you don't give up on yourself.
Marissa Sharif: Exactly. That's great.
Katy Milkman: I love it. OK. This is so interesting. So I have another question, which is what's the difference between an emergency reserve and just taking a mulligan or a do-over?
Marissa Sharif: It's similar, but we found that the label and the framing are both important. So one thing is calling it emergency reserve helps in the sense of mental accounting. People try to use resources in the way that they're labeled, and so labeling it mentally as emergency reserve or thinking of it as, "I want to use this only in cases that I really need to" helps with that resistance component, helps with people not completely taking advantage of it.
Katy Milkman: Love that. Is it ever a bad idea to give yourself emergency reserves? Can people give themselves too many, get carried away?
Marissa Sharif: Yeah. I think less is better than more, and we also found that even if people fail with their emergency reserves—so let's say you have a goal of doing something seven days of the week and two emergency skips, but you end up only doing four days—it doesn't seem like that leads to complete failure. It's not like that's worse than a hard goal situation. So erring on the side of fewer leads it to feel more limited, and people are less likely to use them.
Katy Milkman: Basically, in general, we just want to get people to hoard those get-out-of-jail-free cards.
Marissa Sharif: Yes.
Katy Milkman: So what should our listeners do differently now that they know about the power of emergency reserves?
Marissa Sharif: So I think thinking about what goals do you want to achieve? Thinking about what is a challenging level for you for that goal, whether it's exercise, whether it's learning a language, whether it's a budget of some kind, and seeing how you can incorporate emergency reserves. So giving yourself some slack so that you keep pursuing them even in the face of these small challenges, especially if this is something you're trying to do for a long time, which is generally the case for fitness goals or budgeting or these lifelong goals. Try to see if you can find a challenging goal and then add some emergency reserves to help you keep going.
Katy Milkman: And then hoard them.
Marissa Sharif: And then hoard them, yes.
Katy Milkman: OK. Thank you, Marissa. This has been really fun. Thank you so much for taking the time to talk to me today.
Marissa Sharif: Of course. Thanks for having me. It was fun.
Katy Milkman: Marissa Sharif is an assistant professor of marketing at the Wharton School at the University of Pennsylvania. Marissa's research was done in collaboration with Cornell University professor Suzanne Chu. You can find a link to this work on emergency reserves in the show notes and at schwab.com/podcast.
If you're a regular listener, you've heard me talk about the power of fresh starts, or new beginnings, to help you kickstart goal pursuit. New Year's resolutions, for example, are spurred by the fresh start of January 1st. But what happens when you don't quite stick to that challenging New Year's goal you set? On a recent episode of Financial Decoder titled "Is It Time to Reboot Your New Year's Resolutions?" host Mark Riepe and his guests remind listeners that you can always start over and try again, and they propose some specific resolutions to help you better manage your financial life. You can find it at schwab.com/financialdecoder or wherever you get your podcasts. If you do reboot a financial resolution, consider building in some emergency reserves to increase your chance of success.
Thanks to seminal work by psychologists Gary Latham and Edwin Locke, we've had strong evidence for the better part of a century that setting challenging goals fuels success. But as the saying goes, "Hard things are hard," and life can get in the way. Building in emergency reserves, but not too many, can help you reach your harder goals without giving up. And organizations outside the video game industry have taken note. For instance, WW, formerly Weight Watchers, asks customers to rein in unhealthy eating by tracking how many points different foods contain and targeting specific point limits each day. But WW also gives everyone some flexible weekly points to allocate when they need a splurge meal. Sounds a lot like an emergency reserve system, doesn't it? Cheat meals or cheat days at a low frequency serve the same purpose. But my personal favorite use of emergency reserves in the wild is to motivate language learners on Duolingo.
If you're familiar with the app, you'll know users are encouraged to spend a few minutes doing language exercises daily and to maintain a streak of daily practice. But in case you have to miss a day, you're granted a limited number of streak freezes that you can use to patch the gap and keep your streak alive. I'm at 326 and counting, but only thanks to those streak freezes. You might be wondering how big the benefits of emergency reserves really are. Marissa Sharif's work shows that emergency reserves can improve goal achievement substantially. In a study of step counts, emergency reserves boosted steps taken over and above standard goals by 20%, and increased goal achievement by 40%. In other studies, goal achievement has even doubled with the use of emergency reserves.
So what's the punchline? The next time you're thinking of setting a goal, whether it's around your daily spending, your weekly saving, your exercise, or even meditation, be sure to set a tough goal, a goal that will stretch you, but then give yourself a limited number of emergency reserves, and follow Marissa's advice to hoard them. Don't use them unless you truly have to. If and when you really need your reserves, they'll be there to give you the flexibility you need to pick yourself up from a misstep, and keep going strong, in video games and in real life.
You've been listening to Choiceology, an original podcast from Charles Schwab. If you've enjoyed this show, we'd be really grateful if you'd leave us a review on Apple Podcasts, a rating on Spotify, or feedback wherever you listen. You can also follow us for free in your favorite podcasting 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, at katymilkman.com/newsletter. In two weeks, I'll speak with Dr. Anuj Shah about how the knowledge you have about strangers can bias your decisions. I'm Dr. Katy Milkman. Talk to you soon.
Speaker 6: For important disclosures, see the show notes or visit schwab.com/podcast.