Behavioral Economics

The intersection of psychology and economics, behavioral economics looks at human tendencies that involve biology and culture when predicting and explaining economic decision-making.

Powerful Women

Lady Gaga is #7. Yes, according to a 2010 Forbes list of the most powerful women in the world, Lady Gaga’s power is surpassed by just 6 other women: Michelle Obama, Irene Rosenfeld (Kraft Foods CEO), Oprah, Angela Merkel (Germany’s Chancellor), Hillary…

High, Low, or No Cigarette Tax?

Recently, Connecticut legislators were pleasantly surprised because an increase in the cigarette tax generated more revenue than they expected. You might say that the results were predictable. However, if a state increases taxes, it is possible that consumers will stop…

Vacation Daze

In a column about Netflix, author Daniel Pink described their vacation policy for salaried employees. They have none. All who are salaried can take off as many or as few days as they want. Their rationale? Because many people do…

How Not To Price a House

Let’s assume you would like to sell your house. According to Wired journalist Jonah Lehrer, the price you select might not be optimal. Why? Because we like to avoid losing money. (Of course, you might say, that is obvious. But…

Monkeynomics

Watching capuchin monkeys, we can learn about the financial crisis. In a July TED talk, Yale’s Laurie Santos describes the marketplace she created for the monkeys she was observing. Santos’s goal was to determine whether the mistakes we repeat are…

More About Money and Happiness

If you want to know whether money relates to happiness, you might first decide what makes you happy. A Gallup World Poll of 136,000 people in 132 countries from 2005-2006 focused on 2 variables: “life satisfaction” and “enjoyment of life.”…

The Marshmallow Test and Financial Reform

Is it possible that the marshmallow test relates to financial reform? As described in a 2009 New Yorker article by Jonah Lehrer and a WNYC Radio Lab podcast, a marshmallow test given to 4 year olds might predict adult behavior.…

Starbucks or McDonald’s?

A recent Pew Research Center survey asked 2260 adults whether they would, “prefer to live in a place with more McDonald’s or more Starbucks.” 43% said McDonald’s; 35% said Starbucks; 22% had no preference. According to the study, a key…

The GDP and Happiness

Yesterday’s post about the impact of individual wealth on happiness started me wondering about flush toilets, washing machines, and cars. As our nation became wealthier and produced more goods and services, how did that affect our happiness? To get some…

Social Contagion

If unemployment creates unhappiness, then will people be less unhappy if their friends are also unemployed? According to a recent IMF paper, not only are people less unhappy when they and their friends are unemployed, but also, they then tend…