The Wall Street Journal:
Psychology Fast and Furious
Could the hectic pace of modern life be spurring people to make risky choices? Researchers tested the effects of “thought speed” on appetite for risk.
First, three dozen students read sentences aloud, at either twice their ordinary speed or half that speed, setting the pace for the brain. Then each participant played a computer simulation, getting five cents each time he or she pumped air into a balloon but losing the money if too much air went in and the balloon popped. People who had read quickly were more aggressive, attempting (and achieving) more pumps but also popping more balloons.
In a second experiment, 52 students watched videos of identical content edited with quick, medium, or long cuts. Viewers of the quick-cut scenes were more likely to say that in the next six months they were likely to smoke marijuana, play drinking games or have unprotected sex; they were also more likely to minimize dangers in those actions.
“Fast Thought Speed Induces Risk Taking,” Jesse J. Chandler and Emily Pronin, Psychological Science (April)
Personal Finance: The Urge to Splurge
Our mental accounting goes awry when we try to keep track of “exceptional expenses”—partly because splurges are far less rare than we think.
Nearly 300 students were asked to estimate their expenses over a week for “items outside the ordinary course of events,” such as replacing a broken TV or going out for a celebratory dinner, and also for run-of-the-mill expenses, such as the cable bill. Queried a week later, the students had nailed their ordinary expenses to within a couple of dollars but had underestimated their “unusual” ones by about 40%.
The tendency can be partly corrected: When students were first asked to consider how many birthday presents they buy for friends over a year, then offered a $15-to-$75 range of watches, they chose significantly less-expensive watches as gifts.
“The Exception Is the Rule: Underestimating and Overspending on Exceptional Expenses,” Abigail B. Sussman and Adam L. Alter, Journal of Consumer Research (forthcoming)
Read the whole story: The Wall Street Journal
Leave a comment below and continue the conversation.