Take some time to think about the most significant relationships in your life. Do these relationships maintain a level of equality, or is the balance tipped in one direction – not when it comes to intelligence, humor, social standing, or anything like that, but from good old-fashioned dollars and cents. Are you in a rich […]
Would you prefer a nice crisp $50 dollar in your hot little hands today, or would you prefer to receive $55 in 10 months? Chances are, you chose the instant money, despite the fact that waiting would give you 10% more — a rate you’d kill for from your bank’s savings account. That preference for […]
Let’s try a little experiment. Make a list of all the words you can think of that begin with the letter R. Now, come up with a list of all the words you can think of that have R as the third letter in the word. Based on your lists, which is more common — […]
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 […]
