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Interview With Barry Nalebuff

Aired November 9, 2003 - 09:42   ET


RENAY SAN MIGUEL, CNN ANCHOR: Throughout our program this morning we have been receiving your e-mails with suggestions for making life better. You can find tons of unconventional common sense ideas in the book "Why Not: How to Use Everyday Ingenuity to Solve Problems Big and Small." Coauthor Barry Nalebuff is a renowned economist and business guru who teaches economics at Yale, and he joins us this morning with the latest thinking from the edge. Thanks for being with us today.

SAN MIGUEL: The best example, from what I understand, of thinking outside the box can be described or demonstrated with a banana. I understand you've got one there. Can you give us a quick demonstration of what you are talking about here?

NALEBUFF: Sure. So, this is an example from Steve Lansberg (ph). People take a solution that they are familiar with and don't try to do things differently. The question is, how else might you go about peeling a banana? Most people just start here and go down. But what other options exist? What do you think?

SAN MIGUEL: Go to the other end? From what I understand.

NALEBUFF: Go to the other end.

SAN MIGUEL: That's what monkeys do in the wild.

NALEBUFF: Go to the other end. You can peel it from both sides. This way you get a handle at the bottom. Plus, the fact is, if you have any doubts, who has more experience? Monkeys have lots of experience eating bananas, and this is how they do it.

SAN MIGUEL: The strings that you get on the bananas actually fall away from you. So it's more efficient, as well. Instead of thinking outside the box we thought outside the banana. That is interesting.

The big thing I got from your book, the parts I've read about it, is that you don't have to be a genius or somebody with science or engineering or technology to come up with some kind of an innovation.

NALEBUFF: We are all experts in our every-day life. We solve problems, so share them with others.

SAN MIGUEL: But doesn't the kind of innovation that would involve changing a lot of peoples lives, does that not require a certain amount of money on hand to make that a reality?

NALEBUFF: Some do. Some don't. One of our favorites is the idea of the reverse 900 number. Instead of paying for a minute, to make a call, why not get paid per minute for receiving a call. That would be a great solution for telemarketers and pollsters. While they're trying to sell you a product, you can be selling them your time.

SAN MIGUEL: There is also the obstacle of getting some folks working in corporate America or government bureaucracies to go along with this. They might like the way things are now? They might like the status quo.

NALEBUFF: Part of what we are trying to do is battle complacency. We're the anti-Dilberts. We're not cynics, we are -- I agree.

SAN MIGUEL: So the idea of being -- more on the lines of optimist...

NALEBUFF: We pick up on the line from R.F.K., I dream of things that never were and say why not.

SAN MIGUEL: We have been getting e-mails all morning long, asking people to come up with some of their ideas for making peoples lives better. Do you mind if we read a couple and get your comments on this?

This comes from Jane, who writes in, why not have the entire nation not buy gas for one day? There wouldn't be enough storage bins for the excess. Do it for two days, it may be free. What do you think? Applicable in today's world?

NALEBUFF: I think the -- here's another example of a flip. Rather than a boycott, turn that around, why not a "buycott?" Instead of penalizing companies that do things wrong, reward companies that do things right. So perhaps the question is not only what you don't buy that day, but what you do buy that day, as well.

SAN MIGUEL: You talk about incentivization, you know, giving companies or whatever, or whoever you're trying to affect, incentives for reaching out and changing the way that they do things now.

NALEBUFF: Correct. So one example where incentives are a little messed up is actually auto insurance. The cost of an accident, the cost of driving, is actually proportional to how many miles you drive. Women drive half as much as men and still pay the same amount for auto insurance. Why not have auto insurance be paid on a per mile basis?

SAN MIGUEL: And why not also offer it at gas pump? That's another idea that's out there, right?

NALEBUFF: That's an idea that has been tried, and actually, I'm quite keen on that.

SAN MIGUEL: OK. Another - Mark with Ontario, Canada, writes in, concerning the controversy downloading MP3 music files, why not add a surcharge of $1 per month on all existing home Internet accounts? I'm assuming, taking it from that step, paying that to the record companies so they are not suing people for copyright violations.

NALEBUFF: Again, one of the things that suggests is the notion of taking a solution that works in one context and trying it somewhere else. The approach you are proposing is actually the BMI/ASCAP solution, what they do for radio stations. Radio stations basically pay a subscription fee. I think a notion of a subscription fee for music makes a world of sense. Different colleges and universities are actually starting to do that now.

SAN MIGUEL: The name of the book is "Why Not." Barry Nalebuff, thank you so much for your time. Good luck with the book. Hope some of those ideas will catch on.

NALEBUFF: Thank you. There's a wonderful open source movement for ideas at, where everyone is sharing their ideas.

SAN MIGUEL: You have the address out there, so hopefully we'll get some good ideas. Barry, thanks so much for your time. We appreciate it.

NALEBUFF: All the best.


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