It's hard to find a place today where concepts of behavioral finance aren’t being applied to real-world situations. From London to Washington to Sydney, governments are experimenting with the psychology of decision-making and trying to “nudge” citizens toward better behaviors, whether that means saving more for retirement or signing an organ donation card. Meanwhile, businesses see opportunities for higher profits. To grab more attention and dollars from consumers, companies as far afield as banks and fitness-app makers carefully design their offerings with consumers’ decision-making quirks in mind.
Over the past few decades, economics has been the chief driver of success in the National Football League. Teams that best understood the limits and opportunities of the salary cap enjoyed an advantage on the field. You could call it the Age of the Nerd.
For Elizabeth Warren , the Obama administration adviser setting up the Consumer Financial Protection Bureau, simpler mortgage paperwork is a “regulatory sweet spot” that will cut lender costs and borrower confusion.
John Coates, a senior research fellow in neuroscience and finance at the University of Cambridge, has a theory. He says there would be fewer stock market bubbles and crashes if women and older men handled most of the trading. “There is less diversity in the financial world than in the military,” he quips. “On Wall Street, we have one slice of the population -- young men -- running our trading floors. That leads to extreme behavior: They go wilding.”
Take a look at the photos of two pairs of eyes, and take note: Your heartbeat accelerated when you looked at the left-hand figure. In fact, it accelerated even before you could label what is so eerie about the picture.
The third presidential debate, concerned mainly with foreign policy, was frustrating for many commentators because it gave them little to chew on. What’s to debate when there’s so much agreement -- or the semblance of it, at least?
According to the latest Wall Street Journal/NBC News poll, 55 percent of registered voters say the outcome of this election will make “a great deal of difference” in their lives. That’s a 10 percentage point increase over the 2004 election, and more than double the percentage of voters who felt that way about the elections of 1996 or 1992. The stakes this year are higher -- and most voters know it.