“I recently worked on a research project examining how one’s own “attractiveness” affects one’s view of the “attractiveness” of others. One of his good friends, in fact, is a founder of PayPal and is worth tens of millions. But Hong knows how to make the circles of comparison in his life smaller, not larger. In his case, he started by selling his Porsche Boxster and buying a Toyota Prius in its place. “I don’t want to live the life of a Boxster,” he told the New York Times, “because when you get a Boxster you wish you had a 911, and you … Continue reading The Truth about Relativity
“Sadly, most of us often prefer immediately gratifying short-term experiences over our long-term objectives. We routinely behave as if sometime in the future, we will have more time, more money, and feel less tired or stressed. “Later” seems like a rosy time to do all the unpleasant things in life, even if putting them off means eventually having to grapple with a much bigger jungle in our yard, a tax penalty, the inability to retire comfortably, or an unsuccessful medical treatment. In the end, we don’t need to look far beyond our own noses to realize how frequently we fail … Continue reading Short-term over Long-term Objectives
“The more cognitive skill involved, we thought, the more likely that very high incentives would backfire. We also thought that higher rewards would more likely lead to higher performance when it came to noncognitive, mechanical tasks. For example, what if I were to pay you for every time you jump in the next twenty-four hours? Wouldn’t you jump a lot, and wouldn’t you jump more if the payment were higher? Would you reduce your jumping speed or stop while you still had the ability to keep going if the amount were very large? Unlikely. In cases where the tasks are … Continue reading Motivation Backfire!
“Loss aversion is the simple idea that the misery produced by losing something that we feel is ours—say, money—outweighs the happiness of gaining the same amount of money. For example, think about how happy you would be if one day you discovered that due to a very lucky investment, your portfolio had increased by 5 percent. Contrast that fortunate feeling to the misery that you would feel if, on another day, you discovered that due to a very unlucky investment, your portfolio had decreased by 5 percent. If your unhappiness with the loss would be higher than the happiness with … Continue reading “Loss Aversion”
“This is one of those observations that is both obvious and (upon exploration) deeply profound, and it explains all kinds of otherwise puzzling observations. Which do you think, for example, has a higher suicide rate: countries whose citizens declare themselves to be very happy, such as Switzerland, Denmark, Iceland, the Netherlands, and Canada? or countries like Greece, Italy, Portugal, and Spain, whose citizens describe themselves as not very happy at all? Answer: the so-called happy countries. It’s the same phenomenon as in the Military Police and the Air Corps. If you are depressed in a place where most people are … Continue reading Depression and HappySad People
“Prison has a direct effect on crime: it puts a bad person behind bars, where he can’t victimize anyone else. But it also has an indirect effect on crime, in that it affects all the people with whom that criminal comes into contact. A very high number of the men who get sent to prison, for example, are fathers. (One-fourth of juveniles convicted of crimes have children.) And the effect on a child of having a father sent away to prison is devastating. Some criminals are lousy fathers: abusive, volatile, absent. But many are not. Their earnings—both from crime and … Continue reading Prisons?
“In the book that Pallop was reading by Kahneman and Tversky, for example, there is a description of a simple experiment, where a group of people were told to imagine that they had $300. They were then given a choice between (a) receiving another $100 or (b) tossing a coin, where if they won they got $200 and if they lost they got nothing. Most of us, it turns out, prefer (a) to (b). But then Kahneman and Tversky did a second experiment. They told people to imagine that they had $500 and then asked them if they would rather … Continue reading Risk and Gain