Dan Ariely on the Psychology of Money: Sohn Conference Presentation ~ market folly

Tuesday, May 6, 2014

Dan Ariely on the Psychology of Money: Sohn Conference Presentation

We're posting up notes from the Sohn Investment Conference in New York, produced in partnership with Bloomberg LINK.  Next up is Dan Ariely of Duke University who talked about the psychology of money.


Dan Ariely's Sohn Conference Presentation

Professor of Psychology and Behavioral Economics at Duke University. Best-selling writer.

His topic: the Psychology of money. Money spent has opportunity cost. Very hard psychologically to make good spending decisions. Wrong decisions:   

1. Think of it in relative terms rather than absolute terms. "For only $3000 more, can get X"    
2. The method of payment effects your decision.  "The pain of payment."  Cash or credit card. Paying with cash is more annoying than credit cards, because of the timing of payment   
3. Principle of fairness. Peak demand pricing annoys us. Locksmith that fixes your lock quickly - we think we pay too much. Money is incredibly interesting. We make lots of mistakes with money.  Design of electronic wallets is very important because they will effect how people save for retirement.


Be sure to check out the rest of the presentations from the 2014 Sohn Investment Conference.


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