The psychology of money week 2 in progress. Do we really understand how money works and how it influences us? Money is an incredible invention - without we would have to do barters all the time. The world would be a lot more difficult. Money on the other hand creates an incredible mechanism where all of a sudden everything can be traded - and all of these exchanges we do not need to worry about - Ariely calls it an invention equal to the wheel.
Opportunity cost Psychologically - what is money all about? We should think of money in the sense of opportunity cost - in other words: whenever one buys something one should think what else could I have spent this money on? What are you actually giving up by choosing one thing over another? Relativity To trick ourselves, we often think of money in relative terms rather than absolute terms. The Pain of paying Most people find it harder to pay with cash than to pay with credit card. What is an ideal gift - it removes the pain of paying for people. The Plusses and Pitfalls of Teaching Online | The Business Desk with Paul Solman. By Dan Ariely Dan Ariely is not just a great and funny teacher, but he’s dedicated his life to making the world a somewhat better place.
To that end, he’s produced an online course on behavioral economics that already has attracted 140,000 students. Ilustration of Dan Ariely by Coursera. A Note from Paul Solman: Behavioral psychologist and good friend of Making Sense Dan Ariely has written today’s post, introducing his new free online course on behavioral economics. Dan was featured on The Business Desk most recently when he explained “Why Our Brains Might Not Be Able to Resist Black Friday” — that is, why some of us can’t stop shopping. Dan also appeared on PBS NewsHour during harder times. Dan used Valentine’s Day in 2011 to reassure viewers that it’s okay to spend money on gifts, despite what economists call “the deadweight loss of Christmas.”
Dan has been working for the past year to craft a course for free, online consumption. Here is my invitation video for the class: Dan Ariely Talks Creativity and Dishonesty: Scientific American Podcast. “Lots of us are able to cheat a little bit and still think of ourselves as honest people.” Dan Ariely is a professor of behavior economics at Duke University. His latest book, The (Honest) Truth About Dishonesty, explains how creativity makes us better liars—even to ourselves. “Dishonesty is all about the small acts we can take and then think, no, this not real cheating. So if you think that the main mechanism is rationalization, then what you come up with, and that’s what we find, is that we’re basically trying to balance feeling good about ourselves. On the one hand we get some satisfaction, some utility from thinking of ourselves as honest, moral, wonderful people.
“So rationalization is what we allows you to live with some cheating and not pay a cost in terms of your own view of yourself. “What kind of people would be able to rationalize better than other people? —Ingrid Wickelgren and Steve Mirsky [The above text is a transcript of this podcast.] Our loss of wisdom - Barry Schwartz. How Your Moral Decisions are Shaped by a Bad Mood. Imagine you’re standing on a footbridge over some trolley tracks. Below you, an out-of-control trolley is bearing down on five unaware individuals standing on the track. Standing next to you is a large man. You realize that the only way to prevent the five people from being killed by the trolley is to push the man off the bridge, into the path of the trolley. His body would stop the trolley, saving the lives of the five people further down the track.
What would you do? Would you push the man to save the others? Well, think again. Early research showed a difference between personal moral decisions, such as the footbridge problem above, and impersonal moral decisions, such as whether to keep money found in a lost wallet. For example, moods could influence the thought process itself. To test these competing ideas, participants were first put into a specific mood by listening to music and write down an autobiographical memory.
Www8.gsb.columbia.edu/sites/decisionsciences/files/files/defaults_framing_and_privacy.pdf. Test-Taking Cements Knowledge Better Than Studying, Researchers Say. Best content in Guide To Irrational Behaviors madMOOC 2013. Bitter Pill: Why Medical Bills Are Killing Us.
Willa.