If you ever kept a gym membership long after it has become clear that you are not now and will never be a gym rat, then you have felt the effects of loss aversion. This particular effect of behavioral economics explains why people are more likely to work to avoid a loss than they are […]
When it comes to making money decisions, we all like to think that we are rational creatures who will make the best decisions for our self-interests. Unfortunately, much more goes into any decisions we make than a simple cost-benefit analysis. Advertisers and retailers have long understood the irrational impulses that drive consumers, and economists are […]
Five years ago, we decided to shut off the satellite television service we had subscribed to for over ten years. When people find out we don’t have television service, most are aghast. They can’t imagine life without American Idol, Two and Half Men, Judge Judy, or True Blood. They look at me like I belong […]
There are many reasons that, as a society, we’ve gone over to using money, rather than sticking to a barter system. One big reason is accounting, as it’s much easier to keep track of dollars coming in and going out than it is to track a variety of services and products that all have different […]
Banking has come a long way from the single branch brick-and-mortar offices that used to be in every town and community. ATMs, online banking, and direct deposit are all innovations that old time banks could never have imagined. On one hand, the growth of national (and global) banks has opened up many opportunities for the […]
Over the course of three weeks, my husband spent quite a lot on Lord of the Rings collectibles. Can we afford it? I guess so. We didn’t need credit cards to pay for any of the stuff, and it didn’t result in us needing to use debt to pay any of our other obligations. But […]
