12 May 2014

Saving more for tomorrow

This video from TED talk provides an interesting elaboration of behavioural finance:
Saving for Tomorrow (TED Talks).

Instant Gratification:
Take the banana or the chocolate?

Opt out or opt in? Which gives you a better outcome? Depends on what you wanted in the first place! Both give you the sense that you have a choice. But with very different outcomes.

Loss aversion:
Give a monkey an apple and he's happy. Give a monkey two apples and then you take one away, he's pretty upset.

Watch the video to understand the above examples.

No comments: