Tips for fighting bad financial habits

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Apps that might help nudge you into financial health

Willpowering up. The Web site StickK, co-founded by two Yale University professors, is designed for those times when willpower isn’t enough to achieve your goals. On the site, you might commit to repaying credit card debt, keeping track of your spending or saving money by bringing your lunch to work. To add motivation, you can put money on the line. If you fail, it goes to charity. For even more motivation, you can commit to having it sent to a political organization you hate. You also can choose a “referee” — say, a co-worker who knows your lunch habits — to make the final determination and keep you honest. Power play. What lowers energy use? Behavioral research shows appeals to citizenship and the environment and even promises of cost savings fall flat. Peer pressure, however, works. ….[READ]

We should try to avoid jumping to conclusions

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The Irrationality of Irrationality: The Paradox of Popular Psychology

In 1996, Lyle Brenner, Derek Koehler and Amos Tversky conducted a study involving students from San Jose State University and Stanford University. The researchers were interested in how people jump to conclusions based on limited information. Previous work by Tversky, Daniel Kahneman and other psychologists found that people are “radically insensitive to both the quantity and quality of information that gives rise to impressions and intuitions,” so the researchers knew, of course, that we humans don’t do a particularly good job of weighing the pros and cons. But to what degree? Just how bad are we at assessing all the facts? To find out, Brenner and his team exposed the students to legal scenarios. In one, a plaintiff named Mr. Thompson visits a drug store for a routine union visit. The store manager informs him that according to the union contract with the drug store, plaintiffs cannot speak with the union employees on the floor. After a brief deliberation, the manager calls the police and Mr. Thompson is handcuffed for trespassing. Later the charges were dropped, but Mr. Thompson is suing the store for false arrest. ….[READ]

What exactly is “feeling good”?

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Happiness and Its Discontents

What does it mean to be happy? The answer to this question once seemed obvious to me. To be happy is to be satisfied with your life. If you want to find out how happy someone is, you ask him a question like, “Taking all things together, how satisfied are you with your life as a whole?” Are you satisfied with your life? How are you feeling? Does either question tell us what we really want to know? Over the past 30 years or so, as the field of happiness studies has emerged from social psychology, economics and other disciplines, many researchers have had the same thought. Indeed this “life satisfaction” view of happiness lies behind most of the happiness studies you’ve read about. Happiness embodies your judgment about your life, and what matters for your happiness is something for you to decide. This is an appealing view. But I have come to believe that it is probably wrong. Or at least, it can’t do justice to our everyday concerns about happiness. ….[READ]

Did evolution promote alcoholism?

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Drunken Monkeys: Does Alcoholism Have an Evolutionary Basis?

As the child of an alcoholic father, Robert Dudley long wondered what caused the destructive allure of alcohol. Then while working in the Panamanian forest as a biologist, Dudley saw monkeys eating ripe fruit, which likely contained small amounts of the stuff, and an answer occurred to him: Maybe alcoholism is an evolutionary hangover. Had fruit-eating animals, including human ancestors, gained an evolutionary advantage by learning to associate the smell and taste of alcohol with ripe fruit? Dudley wondered. He named this concept the drunken monkey hypothesis. “I thought it was too simple an idea not to have been thought of previously,” he told Live Science. But he found no record of it. ….[READ]

Fears of manipulation oversell behavioral finance’s capabilities

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Manipulated: The rise of behavioral finance

It’s hard to find a place today where concepts of behavioral finance aren’t being applied to real-world situations. From London to Washington to Sydney, governments are experimenting with the psychology of decision-making and trying to “nudge” citizens toward better behaviors, whether that means saving more for retirement or signing an organ donation card. Meanwhile, businesses see opportunities for higher profits. To grab more attention and dollars from consumers, companies as far afield as banks and fitness-app makers carefully design their offerings with consumers’ decision-making quirks in mind. Many behavioral interventions work, whether at reducing litter and power use or boosting savings rates. Yet these successes aren’t the whole story. ….[READ]

 

Environmental cues affect hunger

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Why do we eat, and why do we gain weight?

Here are a few of the things that can make you hungry: seeing, smelling, reading, or even thinking about food. Hearing music that reminds you of a good meal. Walking by a place where you once ate something good. Even after you’ve just had a hearty lunch, imagining something delicious can make you salivate. Being genuinely hungry, on the other hand—in the sense of physiologically needing food—matters little. It’s enough to walk by a doughnut shop to start wanting a doughnut. Studies show that rats that have eaten a lot are just as eager to eat chocolate cereal as hungry rats are to eat laboratory chow. Humans don’t seem all that different. More often than not, we eat because we want to eat—not because we need to. Recent studies show that our physical level of hunger, in fact, does not correlate strongly with how much hunger we say that we feel or how much food we go on to consume. ….[READ]

More and more stuff does not make us happier

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Here’s Why Materialistic People Are Less Happy and Less Satisfied

New research explores the fact that materialistic people are more likely to be depressed and unsatisfied with life. The study finds that a focus on what you want — and therefore don’t currently have — makes it more difficult to appreciate what you already have, according to the Baylor University research. The study, published in the journal Personality and Individual Differences, recruited 246 people at a private university (Tsang et al., 2014). The researchers tested: how materialist and needy they were, how satisfied they were with life, and their levels of gratitude. They found that people who were more materialistic also felt less gratitude which, in turn, was associated with lower levels of life satisfaction. ….[READ]