In the video in this blog I discuss with the MoneyMail’s Rachel Rickard Straus the psychology of advertising, impulsive spending and self control. … More Advertising and impulsive spending
“There have been great societies that did not use the wheel, but there have been no societies that did not tell stories.” —Ursula K. LeGuin To listen to some scholars of decision-making, it is a great wonder that humans have survived as long as they have. We are constantly prone to biases, rely on simplistic … More Different Minds: why we need human capabilities and machine intelligence*
Successful fraud requires both a set of skills and a willingness to deliberately target and deceive others. The most successful fraudsters have a capacity to look us in the eye, to engage our trust and then betray it without a qualm. This capacity is actually quite rare and often associated with personality disorder (or perhaps … More Scams, Victims, and Scammers
“Money doesn’t talk it swears” Bob Dylan Differences in attitudes to money are a major cause of disagreements in relationships. Research shows that financial disagreements are one of the more frequent and less easily resolved causes of relationship conflict. One study found that whilst people are often attracted to potential partners with different emotional reactions to spending, that … More Money and relationships
Let’s call him James, a trader in a City investment bank; young, smartly dressed, confident, and a little impatient. He sat across from me in the interview: “It’s really important to stay cool. For myself, I can say that I really don’t have much emotion while I trade”. Half an hour later, as he relaxed … More ‘The heart has its reasons’: emotions and cognition in the world of finance
Here is a link to my interview with Michael Considine of Share Radio. Where I talk about my research on emotions and investment and the work of the True Potential Centre for the Public Understanding of Finance.
Hermit crabs rely on acquiring discarded shells for their protection and are constantly on the look-out for better shells. However, faced with environmental stress they prefer to stick with their old shell, however unsuitable, than risk moving to a new one[i]. Experiments with rats show that under stress habitual behaviour persists longer in the face … More On fund-managers, rats and hermit crabs: reversion to familiar habits under stress
The video below is a presentation I made at the launch of the Open University Business School‘s Centre for the Public Understanding of Finance (PuFin). You can find a copy of the slides here. Martin Lewis also made a very engaging presentation about financial education at the same event. Further presentations from the event can … More The Emotional Business of Finance
Can understanding the psychology of investment behaviour help you outperform the market? Probably not, but it can certainly help reduce the probability that you will under-perform the market. This matters, because the majority of private investors under-perform. One compelling piece of research evidence comes from a careful analysis, carried out by Dalbar research, of the … More Investment, Emotions and the Temple at Delphi*
And I am a weapon of massive consumption And it’s not my fault it’s how I’m programmed to function Lily Allen, The Fear, 2009 The financial crisis that hit us in 2008 has been analysed in great detail by economists and journalists. A good deal of comment, including mine, has focused on the behaviour of bankers and … More Shopping, impulsiveness and weapons of massive consumption
