What mortgage lenders have to offer to customers

”Ditch the jargon or risk another financial crisis”: Behavioural economics Prof issues warning to lenders A behavioural economics expert from Warwick Business School has told UK mortgage lenders to ditch the jargon and radically change the way they communicate with homeowners on interest-only mortgages if the UK is to avoid another financial crisis. Professor Daniel Read, who works at Warwick Business School and has also consulted for the UK Government and the Financial Services Authority, gave the stark warning to banks and building societies facing the prospect of writing off millions of pounds because householders have no way of paying … Continue reading What mortgage lenders have to offer to customers

The weird scarcity principle

Less is more … attractive! Which one tastes better: drinking coke from a large bottle (2,5 L) or from a small one? Would you care more of your online representation if you got only one like per day from Facebook to spend? And what if you got only a small portion of food in a restaurant? How do these limitations effect your experience? I don’t know whether it’s true for everyone or it is just me, but I love drinking from those small soft drink bottles. And at the same time, I find it quite difficult to value the things … Continue reading The weird scarcity principle

Altruistic incentives

A New Model for Bonuses: Shift that bonus from self to others! Before writing personal bonus checks to your employees this December, have a look at our paper — hot off the press! If you are hoping that a bonus would allow them to buy whatever they wish and as a result be happier at work and more productive, we have a better idea! Rather than giving your employees more personal bonuses, make a minor adjustment and offer them prosocial bonuses, a novel type of bonus to be spent on others. Across three field experiments, we tested the efficacy of … Continue reading Altruistic incentives

How to survive with virtual money

Life on Bitcoin: A Documentary Can a newly married couple survive when every living necessity can only be purchased with “cryptocurrency”? Right now, you can buy anything online from soap to illegal drugs with bitcoin—you can date online, setup a WordPress blog, buy bee-keeping equipment, or even buy gold. It’s come a long way, but could you survive using just bitcoin in the REAL world? We’re going to find out! (What is bitcoin?) ….[READ] Continue reading How to survive with virtual money

Persuading people without evidence

Skipping breakfast and everything causing cancer The New York Times had an article on the widespread confusion about whether skipping breakfast causes you to gain or lose weight. It seems there’s no substantial evidence that skipping breakfast has any effect on obesity. What we found most amusing was this passage with a quote from Dr. David Allison: “Dr. Allison said that the true relationship between eating breakfast and body weight, if there is one, was still an open question. But observational studies that tout an association between the two are churned out “just about every week,” despite doing nothing to … Continue reading Persuading people without evidence

How to develop empathy to avoid disaster

Concentrating on Kindness Empathy made Antoinette Tuff a minor celebrity. On 20 August, a young man armed with an AK-47 and 500 rounds of ammunition burst into the school in Decatur, Georgia, where Tuff works as a bookkeeper. It might have ended in yet another senseless mass killing if it hadn’t been for Tuff’s compassionate response to the gunman, recorded in its entirety because she had dialed 911. As the man loads his weapon, Tuff seeks a human connection with him. She talks of her own struggles, her disabled son, her divorce, her thoughts of committing suicide. Finally, she persuades … Continue reading How to develop empathy to avoid disaster