New Scientist provides a comprehensive summary of studies looking at the psychology of money. There are some fascinating findings here, including a study showing that “simply thinking about words associated with money seems to makes us more self-reliant and less inclined to help others [and] just handling cash can take the sting out of social rejection and even diminish physical pain”.
Our relationship with money has many facets. Some people seem addicted to accumulating it, while others can’t help maxing out their credit cards and find it impossible to save for a rainy day. As we come to understand more about money’s effect on us, it is emerging that some people’s brains can react to it as they would to a drug, while to others it is like a friend. Some studies even suggest that the desire for money gets cross-wired with our appetite for food. And, of course, because having a pile of money means that you can buy more things, it is virtually synonymous with status – so much so that losing it can lead to depression and even suicide. In these cash-strapped times, perhaps an insight into the psychology of money can improve the way we deal with it.
*The original article has, since posting this, gone behind a paywall. Simoleon Sense has some extensive excerpts.
The news that Obama had some of the leading behaviourists advising his campaign comes as no surprise to me, however I likely underestimated how much they influenced both the campaign and the voters.
Time takes a look at this “behavioural dream team” and discusses how the Obama administration is using behavioural economics to guide its financial policies.
The existence of this behavioral dream team â€” which also included best-selling authors Dan Ariely of MIT (Predictably Irrational) and Richard Thaler and Cass Sunstein of the University of Chicago (Nudge) as well as Nobel laureate Daniel Kahneman of Princeton â€” has never been publicly disclosed, even though its members gave Obama white papers on messaging, fundraising and rumor control as well as voter mobilization. All their proposals â€” among them the famous online fundraising lotteries that gave small donors a chance to win face time with Obama â€” came with footnotes to peer-reviewed academic research. “It was amazing to have these bullet points telling us what to do and the science behind it,” Moffo tells TIME. “These guys really know what makes people tick.”
President Obama is still relying on behavioral science. But now his Administration is using it to try to transform the country. Because when you know what makes people tick, it’s a lot easier to help them change.
While I like this progressive move, Iâ€”like Mind Hacks’ Vaughanâ€”feel the need to ask, “Where are the sceptical voices?”