Tag: guthrie weinschenk
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Episode 11: Status Quo Bias
Hey, here’s a suggestion. Go workout. Right now. Go! Whatever you do, pound iron, run super hard, walk around the block; whatever it is, go get after it for half an hour. Okay bye! Hey so that was great? Did you do the workout? Right now, did you actually get up and change whatever you…
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Episode 10: How Sunk Costs Work
One of, if not the most, important motivator in behavioral economics is the fear of loss. We’ve talked about this extensively and it takes many different shapes. One of my personal favorites is what’s known as a “sunk cost”. Compared to a lot of behavioral economics terms this is pretty popular and well known, but…
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Episode 9: What Are Heuristics?
I have a confession to make. It took me years to understand the concept of heuristics. I don’t know why. I mean, I’m a smart guy, who obviously understands this economic mumbo-jumbo far better than the ordinary person. And heuristics is/are one of the foundational ideas of behavioral economics. Maybe it’s the name. Too Greek?…
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Episode 8: Time Discounting and Time Preference
How humans perceive time is a tricky question, and one that I am not going to answer today. Too much unknown and unexplored psychology and not enough behavioral economics. Maybe how humans perceive time is a more interesting question, I’m not sure. But what is easier to measure is how much you are willing to…
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Episode 17: Cooperation and Punishment
Did you go to college? Hopefully a liberal arts college? Even if you didn’t, think back to some late night with your buddies, maybe a little weed was smoked. Or in some dopy poly-science class with the one know-it-all jerk who would always shoot up their hand to give some long running opinion about society?…
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Episode 7: How Using the Ultimatum Bargaining Game Proves That Cultures of Trust Require Public Retaliation (NOT Altruism)
Game theory. Or should I sayyy LAME THEORY. Ayyyyyyy…. This post is about one small game, the ultimatum bargaining game, that’s useful in explaining the tools behavioral scientists can use to measure the reactions of other humans. Did you ever watch the (now old) movie A Beautiful Mind? It’s about a mathematician named John Nash…
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Episode 6: Using the idea of “utility” to calculate “value”
Economics gets a bad reputation for being wrong about things, or only measuring things in terms of dollars or GDP (gross domestic product). But most of these “bad raps” are simply because people don’t understand what economics is, and what it is actually capable of. When I talk about “economics”, I’m not talking about Adam…
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Episode 5: Consumers overvalue what they have, and that’s a problem.
Another derivative of what I call “ownership bias” is the difference between the willingness to accept money (WTA) and the willingness to pay money (WTP). People exhibit ownership bias when there is something that they feel is theirs; that they own. Let me take you on a quick mind-journey. Your grandfather carefully cut, planed, jointed,…
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Episode 4: How trying to avoid regret changes our behavior
Let’s talk about regret aversion. Again, fancy phrase, simple idea. Let’s go on a mind-journey! Imagine this. You’re at home cleaning out an old shoe box of junk. I mean, you’ve had this stuff forever since you were a kid. But do you really need that candy bar from 17 years ago that you’ve been…
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Episode 3: Why something being FREE is so compelling
Everyone loves free. There’s something truly magical about getting something that you value for free and the feeling seems universal. In another post I’ll talk about why we feel indebted when we get something for free, but for now, I want to focus on the feeling of free. If we want it; we take it.…
