Psychology studies relevant to everyday life from PsyBlog. Why We Buy: How to Avoid 10 Costly Cognitive Biases. The psychology of money: post-purchase rationalisation, the relativity trap, rosy retrospection, the restraint bias and more… We all make mistakes with money, some more than others. And in this economy, who needs it? But many of these mistakes are avoidable if we can understand how we think about money. Here are 10 biases that psychological research has shown affect our judgement…and how to avoid them. 1. Status quo bias One of the biggest reason people lose out financially is they stick with what they know, despite much better options being available. Research on investment decisions shows this bias (e.g. It’s hard to change because it involves more effort and we want to avoid regretting our decision. 2. After we buy something that’s not right, we convince ourselves it is right.
Most people refuse to accept they’ve made a mistake, especially with a big purchase. Fight it! 3. We think about prices relatively and businesses know this. The relativity trap is also called the anchoring effect. Rare and Unusual Photos and Images From the Burns Archive. Ancient Texts Library. Please note: The texts herein are the best we could find. You may find others that differ. They are offered as study and/or reading material only. No claims of accuracy are offered for any given texts. An almost complete index is here. Library contents by culture, country, or religion; African Buddhist Celtic Mary Jones Celtic Literature Collective English Irish Manx Scottish Welsh Chinese Christian Egyptian Ethiopian Gnostic Greek Indian Indonesian Irish Japanese Jewish Mesopotamian The Latin Library Scandinavian Swedish Norwegian Finnish Geatish Persian Roman Russian.
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