Money [TED – NPR] THE MONEY PARADOX [NPR TED RADIO HOUR]
Re-Broadcast date: 5 Dec 14
– psychological research into why humans make mistakes with money
What Makes Humans Unique?
– we do bad things even though we know of bad consequences
– we create constructs/environments that are “super-complex” – but is this because there is a flaw in us in the first place?
– monkey experiment with token economies
– errors in markets – irrational (wired to avoid risk – in particular losing stuff or getting less stuff than they expected even when the deal is still good)
– similarities between humans & markets regarding losses
– other examples: evolutionary predilection for sweet things
– humans are so good at overcoming their biological limitations through technology
– CAMUS: man refuses to be what he really is
– recognise limitations to overcome them
– monkeys: they found they did not like saving for the future
– different savings behaviour across countries – is there a link between human languages which do/do not distinguish grammatically between the future, the present & the past [for e,g. Chinese is a “”future-less language” whereas English is a future-oriented language
– what makes us think about problems in one way or another?
– contradictions: greed, cautious, generous from one day to the next?
– compassionate/generosity study: as wealth increases, sense of entitlement & self-worth increases – less cooperative, less ethical [seems counter-intuitive]; also more well-off, the less charitable you become [finding – one of many factors; humans are malleable; provide simple reminders]
– money is not the best motivator (if you do this, then you get that – most common motivator – called a “contingent motivator”)(money can narrow focus & restrict creativity) for e.g. “Candle problem” – intrinsic motivation (autonomy, mastery & purpose – doing something larger than ourselves) – get the money right at the beginning as a threshold
– power of incentives – time to establish norms about how fast to do things? [performance rewards; bonuses to incentivise & Motivate]
How can money buy happiness?
– it can’t buy love
– it can buy happiness, if spent the right way
– spend money on yourself – you feel the same
– spend money on somebody else (which can be small & trivial things), you often feel better about yourself