WHY WE
BY DAVID KESTENBAUM
THIS
Our brains get faked out
by marketing ploys, pricing tricks,
and investing come-ons.
MONEY MESSES WITH OUR MINDS.
Science confirms it.
But you can fight back. Here’s how
TAKE OUT YOUR WALLE T and pull out a wad of cash. Now
count the bills, slowly. Rub your fingers over Washington’s
face. Feel better?
More than likely, the answer is yes. The reason, research
shows, is that money can act like a drug on our brains.
Just the ritual of counting your money, says University of
Minnesota marketing professor Kathleen Vohs, can raise
your pain threshold. In one experiment she and her colleagues took two groups of students and had one count bills;
the other, blank pieces of paper. Then both groups stuck
their fingers in hot water. The students who counted real
money reported feeling significantly less discomfort.
in 2009, is part of a field called behavioral economics, which
explores how money plays tricks with our heads. Turns out,
it happens a lot. The mind’s financial guidance systems can
go haywire when we order at a restaurant, when we sell our
homes, or when we try to save for retirement. “I’m sure every
time I go to the supermarket, in small ways I’m fooled,” says
William Poundstone, who writes about behavioral economics in his new book, Priceless: The Myth of Fair Value (and
How to Take Advantage of It).
When we don’t have a feel for what something should
cost, our brains flail about for a reference point. The old
expression goes that you can’t compare apples and oranges,
but we’re actually fine at this. “You never see anyone baffled
