The psychology of making purchases with cash and credit

omg-chocolate-cake-1Although the concept of credit has been around for thousands of years (the Latin word, credere, means ‘to believe’), legend tells us that the first credit card appeared in 1949 when Frank McNamara, head of the Hamilton Credit Corporation, went out to eat with Alfred Bloomingdale.

At the end of the meal they realised that no one in their group had any cash, so McNamara had to call his wife to bring cash to pay for the meal. It was then that he had the idea for a card that could be used at multiple merchants.

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Shiny, happy people having fun

AAA_birnmart_11829It might seem obvious, but spending time with your friends is a pretty good way to get happy. But, some clever researchers from the University of Milan Bicocca, Italy, have found a way to put a monetary value on time spent with friends.

I hear you ask the question, “why?” Well, I guess in a culture where the economy is everything, it’s sometimes useful to get a sense of the financial value of something, so you can win arguments with politicians (I know this from personal experience). It’s not ideal, but if it’s possible, it can be part of a larger set of tools to aid the development of public policy.

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Get outside and enjoy the sunshine*

Style: "shotprod"Research published in 2011 in the journal, Human Communication Research, found that television programs that show social affluence had a significant effect on the viewer’s own material values and their life satisfaction. Other research has found that heavy viewers of television believe that there is greater prevalence of luxury product ownership, a higher level of income occupations such as doctors and lawyers, and higher levels of social affluence in general. My hope is that they’re not all watching Gossip Girls (look it up, it’s pretty trashy). Materialism, and even seeing others living in a material world, despite Madonna’s protestations, is not good for life satisfaction.

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Beware the confirmation bias

landing-pages-confirmation-bias-lessonWorking on the ABC Radio National program, Talking Shop, has reminded me how important it is to not just look for evidence that supports your position. Knowing that you are broadcasting to a diverse, highly intelligent, and sometimes strongly opinioned audience, is a good reminder to be confident in your arguments, and also in your opinions.

Doing the show has reinforced the idea that we do need to be vigilant about the confirmation bias, which is the very human tendency to focus on data and information that confirms our currently held beliefs, and ignore (or dismiss) data that challenges it.

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So, if you’re cashed up, why aren’t you happy?

Pig-with-too-much-money-iStock_000002551071SmallResearch has suggested that the relationship between money and happiness is surprisingly weak, which may stem in part from the way people spend it. In a review of the literature in 2011 around happiness and money, Elizabeth Dunn, Dan Gilbert and Timothy Wilson proposed eight principles that they argued would help consumers get more happiness for their money.

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Money on my mind

Money on my mindIt seems that the actual pursuit of money, in and of itself, is just as rewarding as being able to spend it. In a small study (most brain studies are small by necessity – it’s kind of expensive to fire up an fMRI machine), Neurologist, Brian Knutson from Stanford University, and his colleagues, found that there is a region of the brain that activates when a person anticipates gaining a monetary reward ($0.20  – $5.00).

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The reality of “informed” consent

transmedia-baby-232x300Contracts are not designed for comprehension by vulnerable people; they’re not even designed for average people. They’re designed for comprehension by the most capable people in that field. People who have studied for many years, are part of a system, and work hard to protect their in-group within that system.

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