Partnoy - Wait

ALSO BY F rank P artnoy

F. I. A. S. C. O.

Infectious Greed

The Match King

FRANK PARTNOY

PublicAffairs

New York

Copyright 2012 by Frank Partnoy.

Published in the United States by PublicAffairs,

a Member of the Perseus Books Group.

All rights reserved.

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Book Design by Pauline Brown

Typeset in 11.5 point Minion Pro by the Perseus Books Group

Library of Congress Cataloging-in-Publication Data

Partnoy, Frank.

Wait : the art and science of delay / Frank Partnoy.

p. cm.

Includes bibliographical references and index.

ISBN 978-1-61039-005-7 (e-book)

1. Procrastination. 2. Decision making. I. Title.

BF637.P76P37 2012

153.8'3dc23

2012010970

First Edition

10 9 8 7 6 5 4 3 2 1

For Fletch, again

T he dog on the cover of this booklets call her Maggieis a role model for those of us who want to make better decisions. Maggie could have devoured the biscuit resting on her snout in the blink of an eye. Instead, she is holding back, showing us she can keep her instincts and emotions in check, delaying the pleasure of the snack she can smell all too well. Although this book is mostly about human beings, not animals, its central point is that we can learn a lot from Maggie.

Maggie is, in a limited way, thinking about the future. She is acting a lot like my own dog, Fletch, a fourteen-year-old yellow Labrador retriever I trained as a puppy not to immediately go for a treat. Fletch probably cant think about the future for more than a few minutes, but his limited ability to anticipate consequences and delay gratification has served him well. If anyone in my family leaves food on the table after dinner, Fletch wont leap for it right away, when we probably would catch him. Instead, hell quietly follow us into the living room and lie down at my feet. We wont realize he has moved until we hear the crash of dishes from the kitchen.

In recent years, scientists have made great progress in comprehending how we make decisions. Psychologists have suggested we have two systems of thinking, one intuitive and one analytical, both of which can lead us to make serious cognitive mistakes. Behavioral economists have said our responses to incentives are often irrational and skewed, sometimes predictably so. Neuroscientists have taken pictures of our brains to show which parts react to different stimuli.

Yet we still dont understand the role time and delay play in our decisions and why we continue to make all kinds of timing errors, reacting too fast or too slow. Delay alone can turn a good decision into a bad one, or vice versa. Much recent research about decisions helps us understand what we should do or how we should do it, but it says little about when. Sometimes we should trust our gut and respond instantly. But other times we should postpone our actions and decisions. Sometimes we should rely on our quick intuition. But other times we should plan and analyze.

Although time and delay have not occupied a prominent spot in decision-making research, these concepts lurk behind the scenes, especially in discussions about human nature. Many scientists say the key skill that distinguishes However, thinking about the future is different from predicting it.

As a professor, I have studied law and finance for more than fifteen years. In 2008, when the financial crisis hit, I wanted to get to the heart of why our leading bankers, regulators, and others were so shortsighted and wreaked such havoc on our economy: why were their decisions so wrong, their expectations of the future so catastrophically off the mark? I also wanted to figure out, for selfish reasons, whether my own tendency to procrastinate (the only light fixture in my bedroom closet has been broken for five years) was really such a bad thing.

I interviewed more than one hundred experts in different fields and worked through several hundred recent studies and experiments, many as yet unpublished, in divergent areas of research. I noticed that decision researchers with different types of expertise do not cross paths very often. Frequently, they havent heard of each other. Decision research has become so sprawling that experts in one sub-area often dont know experts in another, even if they are tackling the same questions.

I decided, after a couple of years of thinking about decision-making and time, that in order to understand these concepts we should not look only to psychology or behavioral economics or neuroscience or law or finance or historywe should explore them all, simultaneously. I tried to assemble the mass of evidence from these disciplines as any good lawyer would, to illuminate and clarify arguments we might not see if we look from only one perspective.

The essence of my case is this: given the fast pace of modern life, most of us tend to react too quickly. We dont, or cant, take enough time to think about the increasingly complex timing challenges we face. Technology surrounds us, speeding us up. We feel its crush every day, both at work and at home. Yet the best time managers are comfortable pausing for as long as necessary before they act, even in the face of the most pressing decisions. Some seem to slow down time. For good decision-makers, time is more flexible than a metronome or atomic clock.

During superfast reactions, the best-performing experts instinctively know when to pause, if only for a split-second. The same is true over longer periods: some of us are better at understanding when to take a few extra seconds to deliver the punch line of a joke, or when we should wait a full hour before making a judgment about another person. Part of this skill is gut instinct, and part of it is analytical. We get some of it from trial and error or by watching experts, but we also can learn from observing toddlers and even animals. As we will see, there is both an art and a science to managing delay.