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.

Thursday, 31 May 2012

CO2 #3 Happiness Is About More Than Just Pleasure (via PsychologyToday)

George Mallory, an early 20th century mountain climber, was once asked why he climbs mountains. His famous answer was “Because it’s there.” His answer may have been snide, but it reflects an important fact: even mountain climbers don’t know why they do what they do. This is the point of one of my favorite papers, George Loewenstein’s “Because it is there: The challenge of mountaineering for utility theory.”
The title says it all. Utility theory is the standard economic theory, which is that people do things because they get some pleasure out of them. Pretty obvious, right? Not really.
Loewenstein, an economist and psychologist at Carnegie Mellon University, reports the surprising results that mountain climbers generally hate mountain climbing. They won't say that if you ask them directly. But they hate each step of the way. The preparations are monotonous, the fundraising is necessarily but insipid, getting to the mountain is not half the fun but instead boring and for many mountains frustrating, and the climb itself is the grueling. Some people love to bask in the glory of success. But most of the people who are successful mountain climbers do not seem to be publicity hounds, and are often shy and publicity averse.
Check this recent review about an old, but increasingly time relevant study: HappinessPleasure

CO2 #2 Why We Lie (via WallStreetJournal)

We like to believe that a few bad apples spoil the virtuous bunch. But research shows that everyone cheats a little - right up to the point where they lose their sense of integrity.
Not too long ago, one of my students, named Peter, told me a story that captures rather nicely our society's misguided efforts to deal with dishonesty. One day, Peter locked himself out of his house. After a spell, the locksmith pulled up in his truck and picked the lock in about a minute.
"I was amazed at how quickly and easily this guy was able to open the door," Peter said. The locksmith told him that locks are on doors only to keep honest people honest. One percent of people will always be honest and never steal. Another 1% will always be dishonest and always try to pick your lock and steal your television; locks won't do much to protect you from the hardened thieves, who can get into your house if they really want to. The purpose of locks, the locksmith said, is to protect you from the 98% of mostly honest people who might be tempted to try your door if it had no lock.
We tend to think that people are either honest or dishonest. In the age of Bernie Madoff and Mark McGwire, James Frey and John Edwards, we like to believe that most people are virtuous, but a few bad apples spoil the bunch. If this were true, society might easily remedy its problems with cheating and dishonesty. Human-resources departments could screen for cheaters when hiring. Dishonest financial advisers or building contractors could be flagged quickly and shunned. Cheaters in sports and other arenas would be easy to spot before they rose to the tops of their professions.
Read the rest of the article, and see a short presentation of Dan Ariely's new book here: WhyLie

CO2 #1 David Harvey: 'The financial crisis is an urban crisis' (via TheGuardian)

David Harvey, theorist and author of Rebel Cities: From the Right to the City to the Urban Revolution, says that postwar capitalism can be understood with reference to the history of urbanisation and suburbanisation. Urban investment gets you out of a crisis but defines what the next crisis is going to look like, he argues. The emerging powers of the east are now in the midst of a massive urbanisation project and could fall victim to the same outcome.
Watch this very interest video, which will give you a fresh crisis perspective here: UrbanCrisis

Monday, 28 May 2012

O2 #3 How much is more time with your friends worth? (via Barking up the Wrong Tree)

Being able to spend more time with friends provides an increase in happiness worth up to an additional $133,000 a year. Meanwhile, actual pay raises have very little affect on happiness (e.g., Penelope Trunk).
There is substantial evidence in the psychology and sociology literature that social relationships promote happiness for the individual. Yet the size of their impacts remains largely unknown. This paper explores the use of shadow pricing method to estimate the monetary values of the satisfaction with life gained by an increase in the frequency of interaction with friends, relatives, and neighbours. Using the British Household Panel Survey, I find that an increase in the level of social involvements is worth up to an extra £85,000 a year in terms of life satisfaction. Actual changes in income, on the other hand, buy very little happiness.
Here is the article, in case you want to read it: TimeFriendsWorth

O2 #2 Measure Success by Value you Create (via TheGulfTimes)

One of the keys to happiness and success is to find an important cause to which you can dedicate your life, according to leadership guru Robin Sharma.
Sharma, author of 11 international bestselling books, including The Monk Who Sold His Ferrari, gave insights and advice for youths at Qatar University’s College of Law yesterday, telling the audience how they can be leaders regardless of official title, authority or social status. “Leadership is about what you do when no one is watching,” said Sharma. “Anyone can be ethical when all eyes are upon them, anyone can be excellent when your family or friends or your business peers are watching. The true test of you as a leader ... is how ethical, passionate and engaged you are when you are the only person in the room.
Read the Leadership Guru interesting interview to The Gulf Times here: RobinSharma

O2 #1 Twenty Tested Techniques to Increase Your Tips (via TippingResearch)

Approximately two million waiters and waitresses in the United States depend on tips for their income. These servers would benefit from knowing and using techniques to increase their tips. This manual offers twenty such techniques. All twenty techniques listed here have been experimentally tested and found to increase tips. Not all the techniques work for all servers in all situations, but many are universally applicable.
The techniques are as follows: use makeup (for waitresses); wear something unusual; introduce yourself by name; squat down next to the table; stand physically close to the customer; touch the customer; smile; compliment the customer’s food choices; repeat the order back to the customer; build the check with suggestive selling; entertain the customer; forecast good weather; write “thank you” on the check; write a patriotic message on the check; draw a picture on the check; call the customer by name; use tip trays with credit card insignia; give the customer candy; provide tipping guidelines; and play songs with pro-social lyrics. The techniques are described in detail, together with the experiments that demonstrate their effectiveness and the reasons I think they work.
Learn about this amazing and useful, specially for waiters, work here: 20IncreaseTips

Thursday, 24 May 2012

CO2 #3 How Cannabis Affects Your Brain (via BigThink)

What's the Latest Development?
Cannabis acts on the body and mind by binding to what are called cannabinoid receptors, long, ropy proteins that weave themselves into the surfaces of our cells and process THC, as well as other organic chemical compounds. "Scattered throughout the body, cannabinoid receptors come in two varieties, called CB1 and CB2—most of your CB1 receptors are in your brain, and are responsible for that 'high' feeling when you smoke pot." CB2 receptors are associated with the immune system and situated throughout the body, explaining why cannabis reduces swelling and pain.
What's the Big Idea?
Explaining the munchies: CB1 receptors located in your brain's hypothalamus, which regulates appetite, are responsible for receiving the 'I'm hungry' message from your body's cannabinoids. When you ingest THC, you are artificially boosting the number of cannabinoids in your body, creating a stronger than usual 'I'm hungry' feeling. Explaining why cannabis makes you forgetful: The effects of THC on the hippocampus, the part of your brain most associated with memory, resembles a temporary lesion. The effect is consistent with an abundance of CB1 receptors in the hippocampus.

CO2 #2 Sam Richards - A Radical Experiment in Empathy (via TED)

Sam Richards is a sociologist and award-winning teacher who has been inspiring undergraduate students at Penn State since 1990. Every semester, 725 students register for his Race and Ethnic Relations course, one of the most popular classes at Penn State and the largest of its kind in the country. Through his natural ability of seeing a subject from many angles, Richards encourages students to engage more fully with the world and to think for themselves — something he did not do until his third year in college. Because of his passion for challenging students to open their minds, an interviewer recently referred to him as "an alarm clock for eighteen-year-olds."
Watch his AMAZING ted talk about empathy here: EmpathyRichards

CO2 #1 Two Years After the BP Oil Spill, Is the Gulf Ecosystem Collapsing? (via NakedCapitalism)

The BP oil spill started on April 20, 2010. We’ve previously warned that the BP oil spill could severely damage the Gulf ecosystem.Since then, there are numerous signs that the worst-case scenario may be playing out:
- New York Times: “Gulf Dolphins Exposed to Oil Are Seriously Ill, Agency Says
- MSNBC: Gulf shrimp scarce this season (and see the Herald Tribune‘s report)
- Mother Jones: Eyeless shrimp are being found all over the Gulf
- NYT: Oil Spill Affected Gulf Fish’s Cell Function, Study Finds
- CBS:Expert: BP spill likely cause of sick Gulf fish (and see the Press Register’s report) Study confirms oil from Deepwater spill entered food chain
- Pensacola News Journal: “Sick fish” archive
- Agence France Presse: Mystery illnesses plague Louisiana oil spill crews
- MSNBC: Sea turtle deaths up along Gulf, joining dolphin trend
- MSNBC:Exclusive: Submarine Dive Finds Oil, Dead Sea Life at Bottom of Gulf of Mexico
- AP: BP oil spill the culprit for slow death of deep-sea coral, scientists say (and see the
Guardian and AFP‘s write ups)
- A recent report also notes that there are flesh-eating bacteria in tar balls of BP oil
washing up on Gulf beaches
- And all of that lovely Corexit dispersant sprayed on water, land and air? It inhibits the ability
of microbes to break down oil, and allows oil and other chemicals to be speed past the normal
Is Examined Speaking on the chemical ingredients of the dispersants used, “The report finds
that “Of the 57 ingredients: 5 chemicals are associated with cancer; 33 are associated with skin
irritation from rashes to burns; 33 are linked to eye irritation; 11 are or are suspected of being
potential respiratory toxins or irritants; 10 are suspected kidney toxins; 8 are suspected or
known to be toxic to aquatic organisms; and 5 are suspected to have a moderate acute toxicity
to fish.”
Impressed? Watch the video from American reporter Dahr Jamail here: BPOilSpill

Monday, 21 May 2012

O2 #3 What Do We Value Most? (via TED)

Why do we like an original painting better than a forgery? Psychologist Paul Bloom argues that human beings are essentialists — that our beliefs about the history of an object change how we experience it, not simply as an illusion, but as a deep feature of what pleasure (and pain) is. Paul Bloom studies our common-sense understanding of the world — how we know what we know, why we like what we like.
Wathc this inspiring, insightful, and funny talk here: Pleasure&Pain

O2 #2 How to Improve Children's Social Skills (via BigThink)

The basics of social behavior come from the brain’s emotional system, which is an important contributor to empathy and morality from infancy through adulthood. Babies often cry when they hear another baby crying, because knowing that another person is unhappy makes them feel bad. Even rats will work to help another rat who seems to be in distress. So some precursors of social skills are probably built into the brain, but experience also influences how well children understand and respond to the needs of other people.
Read about this interesting issue here: ChildrensSocialSkills

O2 #1 Gossip Can Have Social and Psychological Benefits (via ScienceDaily)

For centuries, gossip has been dismissed as salacious, idle chatter that can damage reputations and erode trust. But a new study from the University of California, Berkeley, suggests rumor-mongering can have positive outcomes such as helping us police bad behavior, prevent exploitation and lower stress.
Read this counter intuitive study introduction here: GossipBenefits

Friday, 18 May 2012

CO2 #3 Tim Jackson's economic reality check (via TED)

As the world faces recession, climate change, inequity and more, Tim Jackson delivers a piercing challenge to established economic principles, explaining how we might stop feeding the crises and start investing in our future.
Tim Jackson studies the links between lifestyle, societal values and the environment to question the primacy of economic growth.
Amazing and insightful talk here: EconomicRealityCheck

CO2 #2 The More Powerful Women Get (in the Office) the Less Powerful Women Get (in the Bedroom)… (via BigThink)

New research released yesterday finds a “gender reversal” in career aspirations. Sixty-six percent (66%) of women between the ages of 18 and 34 now rate a “high-paying career” as one of the most important goals, compared to 59% of men.
Both men and women ranked marriage and parenthood as more important goals than work, but the report also notes a disjuncture between these stated values and actual rates of marriage.
Almost half of marriages today are dual-career. Seventy percent (70%) of women with children at home are in the workforce, and a larger number of wives are primary breadwinners. In Marriage Confidential (out in paperback in May), I discuss the “workhorse wife” who is the sole breadwinner for the family.
The survey’s adjective, “high-paying,” seems significant. I’m not sure how deliberately they chose that word, but when I was younger, I wouldn’t have rated a high-paying career as important. However, I would have rated a fulfilling, creative, and socially valuable career as extremely important.
My guess is that younger women are valuing high compensation because they’re envisioning a future of self-sufficiency. They’re entertaining the possibility that they won’t get married, won’t want to get married, or that they might join the growing ranks of well-compensated professional women who are single mothers by choice.
Read this relevant article - for women and man - here: OfficeBedPowerful

CO2 #1 Nick Hanauer's TED Talk On Income Inequality Deemed Too 'Political' For Site (via The Huffington Post)

Multi-millionaire Nick Hanauer has an important message for those who think the rich are America's job creators. Problem is, he can't seem to get it out.
"For thousands of years people were sure that earth was at the center of the universe. It's not, and an astronomer who still believed that it was, would do some lousy astronomy," Hanauer said at a March 1 speech, according to the Atlantic. "In the same way, a policy maker who believed that the rich and businesses are 'job creators' and therefore should not be taxed, would make equally bad policy."
Watch the 5m talk TED talks didn't want to broadcast, because it was "too political": IncomeInequality

Tuesday, 15 May 2012

O2 #3 Behavioral economics: what it is and three ways marketers can use it (via Quirk's)

Behavioral economics has recently taken marketing by storm, showing that consumer decisions and behavior can be quite curious, even fascinatingly irrational.
Research results like the following have impelled the behavioral economics movement:
When given a choice, 73 percent of a sample of college students chose a Lindt Truffle for $0.15 versus a Hershey's Kiss for $0.01. However, 69 percent chose the Hershey's Kiss for free versus the Lindt Truffle for $0.14. In each case, the students stood to save $0.14 by choosing the Hershey's Kiss but the Hershey's Kiss was not favored until it was completely free.
In a recent shopper behavior study, a significantly higher percentage of shoppers chose a bundled food offering that included a standard snack item and a decadent condiment for $2.00 off the decadent condiment versus $2.00 off the combination as a whole.
In each of these studies, consumers' decisions were inconsistent with what rational economic theory would predict. Rational economic theory - founded in maximizing expected utility - would have predicted that the percentage of people buying each option would be equal because the expected utility of each option was the same: a savings of the same amount of money.
But in these studies this didn't happen. Why not? Behavioral economics.
Read here about how marketing can use the insights of BE: BE&Marketing

O2 #2 Can Charisma Be Taught? (via Psychology Today)

If you want to be effective as manager, politician, parent or coach it helps to have a little bit of
that X-factor leadership quality, charisma. In a previous blog I suggested that charisma is the oldest and most effective form of leadership because it is based on an intimate, personalized interaction style.
Charismatic leaders appeared in our ancestral environment whenever there was a need to quickly mobilize the masses for some common cause like a war or natural disaster. Through signaling their ability to unite a large crowd and motivate them to go the proverbial extra mile for their group, they obtain charismatic powers. Think Winston Churchill, Martin Luther King, and Nelson Mandela.
Read about some Charismatic Leadership Tactics (CLTs) here: TaughtCharisma

O2 #1 Rory Sutherland: Perspective is everything (via TED)

The circumstances of our lives may matter less than how we see them, says Rory Sutherland. At TEDxAthens, he makes a compelling case for how reframing is the key to happiness.

Rory Sutherland stands at the center of an advertising revolution in brand identities, designing cutting-edge, interactive campaigns that blur the line between ad and entertainment.

Watch this amazing talk here: PerspectiveEverything

Sunday, 6 May 2012

O2 #3 The Secret to Grace Under Pressure (via TIME)

The best way to psych yourself up for a test or presentation is to make it seem insignificant. Here's how: 
How do you gear yourself up for a big test, an important presentation, or any other high-pressure situation? Maybe your internal monologue goes something like this: “OK, this is really important. A lot is riding on this. Don’t screw this up. How well I do on this really matters.” Reminding yourself of the high stakes makes intuitive sense as a motivational strategy—but it will actually impede your performance. Instead of spurring you to new heights, it’s likely to increase anxiety and undermine your confidence. Research shows that reminding yourself how unimportant the event is in the big scheme of things is a better tactic, and psychologists have come up with a variety of ingenious ways to help us do so.

Read more: SecretGraceUnderPressure

O2 #2 Nudging Students Into College (via The Wall Street Journal)

A new study finds that a simple intervention can raise college-enrollment rates among low-income students by 8 percentage points.
Policymakers have long suspected that the daunting Free Application for Financial Aid (longer that the IRS’s Form 1040) acts as a hurdle to college enrollment. In an experiment, they tested whether having tax experts fill out FAFSA when families sought help with their taxes, at H&R Block, would help. It did, in a big way.

Read about this impressive study, about how a small behavioral intervention can have a huge social impact, here: NudgingStudentsCollege

O2 #1 One mile on a bike is a $.42 economic gain to society, one mile driving is a $.20 loss (via Grist)

Copenhagen, the bicycle-friendliest place on the planet, publishes a biannual Bicycle Account, and buried in its pages is a rather astonishing fact, reports Andy Clarke, president of the league of American Bicyclists:
“When all these factors are added together the net social gain is DKK 1.22 per cycled kilometer. For purposes of comparison there is a net social loss of DKK 0.69 per kilometer driven by car.” 1.22 Danish crowns is about 25 cents and a kilometer is 6/10 of a mile, so we are talking about a net economic gain to society of 42 cents for every bicycle mile traveled. That’s a good number to have in your back pocket.
Read the complete article about this Danish study here: BicycleAccount

Wednesday, 2 May 2012

Philosopher Alain de Botton on "Status Anxiety"

The famous philosopher answers some questions for There Are Free Lunches
Alain de Botton, the most-read philosopher alive, has decided to answer some questions about his wonderful book Status Anxiety. The book focuses on the anxiety prevalent in many modern societies to be Number One. It also shows how this can be a win-lose socially dysfunctional game, as your social position is always dependent on where others stand.
Here is the link: StatusAnxietyTFL

CO2 #3 Gross national happiness? Government wants to measure your well-being (via Bangor Daily News)

Of all the phrases bestowed to us by the Founding Fathers, few come up more than “pursuit of happiness.” Yet who knows where the nation really stands on that score?
Now an answer may be forthcoming. Amid a wave of research on the subject, the federal government is seeking ways to measure what some have called gross national happiness.
Funded by the Department of Health and Human Services, a panel of experts in psychology and economics, including Nobel laureate Daniel Kahneman, began convening in December to try to define reliable measures of “subjective well-being.” If successful, these could become official statistics.
The idea of the government tallying personal feelings might seem frivolous — or impossibly difficult. For decades, after all, the world has gotten by with gauging a nation’s quality of life on the basis of its GDP, or gross domestic product, the sum of its economic output.
You can check here what is being done in the US, in terms of Well-being: MeasureWellBeing

O2 #2 Happiness: No longer the dismal science? (via TheEconomist)

One of the more surprising growth industries to have taken off during the current period of economic downturn and austerity has been “the happiness industry”—the increasing activity of economists (not philosophers) who study what constitutes happiness and make recommendations to governments about how best to increase it. This industry has recently achieved an early pinnacle of success with the publication of the first World Happiness Report. Commissioned for a United Nations Conference on Happiness, under the auspices of the UN General Assembly, it bears the imprimatur of Columbia University’s Earth Institute and is edited by the institute’s director, Jeffrey Sachs, and two happiness experts, Richard Layard of the London School of Economics and John Helliwell of the University of British Columbia. The report unmemorably finds that the world’s happiest countries world are in northern Europe (Denmark, Norway, Finland, Netherlands) and the most miserable are in Africa (Togo, Benin, Central African Republic, and Sierra Leone).
Read this Happiness state-of-the-art article from The Economist here: HappinessScience

O2 #1 Two Happiness Tips Discussed (via BigThink)

Both links/excerpts come from Eric Barker at the reliably stimulating Barking up the Wrong Tree.

First, strong relationships.

Via The Happiness Advantage: The Seven Principles of Positive Psychology That Fuel Success and Performance at Work:

In a study appropriately titled “Very Happy People,” researchers sought out the characteristics of the happiest 10 percent among us. Do they all live in warm climates? Are they all wealthy? Are they all physically fit? Turns out, there was one—and only one—characteristic that distinguished the happiest 10 percent from everybody else: the strength of their social relationships. My empirical study of well-being among 1,600 Harvard undergraduates found a similar result—social support was a far greater predictor of happiness than any other factor, more than GPA, family income, SAT scores, age, gender, or race. In fact, the correlation between social support and happiness was 0.7.

Want to know more about the resto of the 2 studies? Go here: 2HappinessTips