Nina Mazar was featured in Dan Ariely’s book The Honest Truth About Dishonesty: How We Lie To Everyone Especially Ourselves and I was compelled to reach out to her to find our more about her research. Her work and the book taught me many things about how we are comfortable with lying/cheating on a regular basis. We talked about all that and much more. Do read on!
Read here an extensive interview with one of the rising star Behavioral Economists of the moment: NinaMazar
There are Free Lunches Statement of Intentions
There are Free Lunches: Behavioral Clues to Live Happy in the Economic World is a blog that intends to present updated and relevant information about the "hidden" and only recently uncovered dimensions of the economic science: the behavioral factors. With this blog we intend to promote in Europe and in the rest of the World, the top research articles and perspectives on behavioral economics, decision making, consumer behavior, and general behavioral science. We aim to be followed by journalists, academics, managers, civil servants, and everyone who wishes to improve their daily interaction with the economic world and consequently, their lives' happiness.
Sunday, 24 February 2013
Deep inside Whitehall, psychologists are finding ways to make you insulate your loft, pay your taxes, and even quit smoking. Is the Coalition's controversial 'Nudge Unit' finally paying off?
Back in the dark ages of early 2011, the Cabinet Office began grappling with one of the most serious issues facing our age: loft insulation. A curious anomaly was emerging in official statistics — that no one wanted it. Huge subsidies had been ploughed into lagging and rolls of fibreglass; there were generously-incentivised installation schemes, that would pay for themselves within months. It was, to use non-Whitehall patois, a no-brainer. And yet public adoption rates were minuscule. Policymakers were baffled.
Step forward, then, a new Government team, with a new way of thinking.
Using research, plus a smidgen of common sense, they quickly identified the problem: laziness. More specifically, the sheer hassle of clearing an attic before you can insulate it. This alone was deterring us from taking up, effectively, a free lunch. And so, in a pilot trial in September 2011, they suggested a simple solution: that insulation firms offer to clear the lofts first, and dispose of our unwanted junk. In weeks, the uptake increased threefold, even though it cost the customer more. And when this service was subsidised to cost price, there was a fivefold increase.
What can economists learn from linguists? Behavioral economist Keith Chen introduces a fascinating pattern from his research: that languages without a concept for the future -- "It rain tomorrow," instead of "It will rain tomorrow" -- correlate strongly with high savings rates.
Check the TED talk here: LanguageSaveMoney
Check the TED talk here: LanguageSaveMoney
Monday, 14 January 2013
Tapping into our ability to turn attention inward empowers and heals.
The Two Paths of Attention: Outward & Inward
What's the difference between noticing the rapid beat of a popular song on the radio and noticing the rapid rate of your heart when you see your crush? Between noticing the smell of fresh baked bread and noticing that you're out of breath? Both require attention. However, the direction of that attention differs: it is either turned outward, as in the case of noticing a stop sign or a tap on your shoulder, or turned inward, as in the case of feeling full or feeling love.
Scientists have long held that attention – regardless to what – involves mostly the prefrontal cortex, that frontal region of the brain responsible for complex thought and unique to humans and advanced mammals. A study by Norman Farb from the University of Toronto published in Cerebral Cortex, however, suggests a radically new view: there are different ways of paying attention. While the prefrontal cortex may indeed be specialized for attending to external information, older and more buried parts of the brain including the “insula” and “posterior cingulate cortex” appear to be specialized in observing our internal landscape.
Most of us prioritize externally oriented attention. When we think of attention, we often think of focusing on something outside of ourselves. We "pay attention" to work, the TV, our partner, traffic, or anything that engages our senses. However, a whole other world exists that most of us are far less aware of: an internal world, with its varied landscape of emotions, feelings, and sensations. Yet it is often the internal world that determines whether we are having a good day or not, whether we are happy or unhappy. That’s why we can feel angry despite beautiful surroundings or feel perfectly happy despite being stuck in traffics. For this reason perhaps, this newly discovered pathway of attention may hold the key to greater well-being.
Read here this interesting article about the importance of looking within: LookWhithin
I appreciate the opportunity to speak at a conference with the important theme of
economic measurement. In many spheres of human endeavor, from science to business
to education to economic policy, good decisions depend on good measurement. More
subtly, what we decide to measure, or are able to measure, has important effects on the
choices we make, since it is natural to focus on those objectives for which we can best
estimate and document the effects of our decisions. One great pioneer in this subject
area, of course, is Simon Kuznets, who was awarded the Nobel Prize in 1971 for his work
on economic measurement, including the national income accounts. Over the years many
economists have built on his work to further improve our ability to quantify aspects of economic activity and thus to improve economic policy making and our understanding of how the economy works. The remarkably broad and ambitious research program of this
conference and the impressive expertise that has been assembled illustrate the continued vitality of this field. Evolving technologies that allow economists to gather new types of data and to manipulate millions of data points are just one factor among several that are likely to transform the field in coming years.
As we think about new directions for economic measurement, we might start by
reminding ourselves of the purpose of economics. Textbooks describe economics as the
study of the allocation of scarce resources. That definition may indeed be the “what,” but
it certainly is not the “why.” The ultimate purpose of economics, of course, is to
understand and promote the enhancement of well-being. Economic measurement
accordingly must encompass measures of well-being and its determinants.
In the tradition of national income accounting, economic policymakers have
typically focused on variables such as income, wealth, and consumption. The Federal
Reserve has a statutory mandate to foster maximum employment and price stability,
which motivates our extensive efforts to monitor and forecast measures of employment
and inflation. Substantial research and the development of data collection infrastructures
have, over the years, greatly enhanced our ability to receive timely and accurate measures
of those variables. Aggregate measures, such as gross domestic product and personal
consumption expenditures, are useful for monitoring people’s ability to meet basic
material needs and for tracking cyclical and secular changes in the economy as a whole.
Indeed, the experience of the recent financial crisis and the ensuing recession was
strongly reflected in nearly all of these aggregate measures, indicating the severe
economic stress felt by millions of people and hundreds of communities across the
But, as many of you will discuss this week, aggregate statistics can sometimes
mask important information. For example, even though some key aggregate
metrics--including consumer spending, disposable income, household net worth, and debt
service payments--have moved in the direction of recovery, it is clear that many
individuals and households continue to struggle with difficult economic and financial
conditions. Exclusive attention to aggregate numbers is likely to paint an incomplete
picture of what many individuals are experiencing. One implication is that we should
increase the attention paid to microeconomic data, which better capture the diversity of
experience across households and firms. Another implication, however, is that we should
seek better and more-direct measurements of economic well-being, the ultimate objective
of our policy decisions.
Although the field is still young, there have been interesting developments in the
measurement of economic well-being. In a commencement address two years ago titled
“The Economics of Happiness,” I spoke about the concepts of happiness and life
satisfaction from the perspective of economics and other social science research.
Read the rest of the introduction, from Ben S. Bernanke - Chairman
of the Board of Governors of the Federal Reserve System, to the
32nd General Conference of the International Association for Research in Income and Wealth here: BernankeConferenceResearchIncomeWealth
Friday, 11 January 2013
Body language affects how others see us, but it may also change how we see ourselves. Social psychologist Amy Cuddy shows how “power posing” -- standing in a posture of confidence, even when we don’t feel confident -- can affect testosterone and cortisol levels in the brain, and might even have an impact on our chances for success.
Amy Cuddy’s research on body language reveals that we can change other people’s perceptions — and even our own body chemistry — simply by changing body positions.
Watch one of the most viewed TED talks of all time here: BodyLanguage