Neuroeconomics of Lottery Tickets and Credit Cards
As sensible value investors and consumers it only makes sense to avoid lottery tickets and credit cards? But why do we still find them so tantalizing? Today’s article via Scientific American sheds light on this issue via an interview with George Lowenstein. (Click here to skip intro and read article)
Article Introduction (Via Scientific America):
George Loewenstein is a neuroeconomist at Carnegie Mellon University who has studied everything from the brain activity triggered by retail shopping to the psychology of lottery tickets. Mind Matters editor Jonah Lehrer chats with Loewenstein about his latest research, and what why credit cards are so dangerous.
Article Excerpts (Via Scientific America):
“One of the papers, just out in the Journal of Behavioral Decision Making was inspired by the empirical observation that the poor spend a disproportionate percentage of their income on lottery tickets. We conducted two experiments to examine whether making people feel poor makes them want to play the lottery.”
“The finding from our first study, that when you make people feel poor they play more, is especially sad since playing the lottery is on average a massively losing proposition.”
Click here to read the full interview
