Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics

Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics

by Gary Belsky, Thomas Gilovich
     
 

ISBN-10: 1439163367

ISBN-13: 9781439163368

Pub. Date: 01/12/2010

Publisher: Simon & Schuster

• A fascinating and practical manual: Looking at the ways we spend, save, borrow, invest, and waste money, Gary Belsky and Thomas Gilovich reveal the psychology underlying irrational financial behavior. Entertaining case studies illustrate common patterns of thinking and show readers how changing their habits can protect and grow their assets. .

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Overview

• A fascinating and practical manual: Looking at the ways we spend, save, borrow, invest, and waste money, Gary Belsky and Thomas Gilovich reveal the psychology underlying irrational financial behavior. Entertaining case studies illustrate common patterns of thinking and show readers how changing their habits can protect and grow their assets. .

• New information for a new economic climate: Belsky and Gilovich offer sound theory and sensible advice that accounts for new economic realities and helps people make good decisions in these difficult times. .

• Increasing prominence of the field: Interest in behavioral economics has increased dramatically since the first edition was released. This updated volume will offer the latest research to readers eager to learn about its practical applications..

Product Details

ISBN-13:
9781439163368
Publisher:
Simon & Schuster
Publication date:
01/12/2010
Edition description:
Original
Pages:
288
Sales rank:
349,502
Product dimensions:
5.56(w) x 8.60(h) x 0.74(d)

Table of Contents

Introduction: Why Smart People Make Big Money Mistakes 1

An introduction to the life-changing science of behavioral economics

1 Not All Dollars Are Created Equal 21

How "mental accounting" can help you save, or cost you money.

2 When Six of One Isn't Half A Dozen of the Other 45

How "loss aversion" and the "sunk cost fallacy" lead you to throw good money after bad.

3 The Devil That You Know 77

How the "status quo bias" and the "endowment effect" make financial choices difficult.

4 Number Numbness 105

"Money illusion, " "bigness bias, " and other ways that ignorance about math and probabilities can hurt you.

5 Dropping Anchor 131

Why "anchoring" and the "confirmation bias" lead you to make important money decisions based on unimportant information.

6 The Ego Trap 155

"Overconfidence" and the price of thinking that you know more than you do.

7 Herd It Through The Grapevine 183

"Information cascades" and the danger of relying too much on the financial moves of others.

8 Emotional Baggage 209

The role of emotions in decision making: What don't know about how we feel.

Conclusion: Now What? 235

Principles to ponder and steps to take.

Postscript: Psychic Income 253

Acknowledgments 257

Index 261

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