Who would you trust right now? Which bank would you trust? Which investment would you trust? Do you really want to put your money; do you want to suffer more of these losses that we just had? You know, these volatility that we see is just unexplainable by any rational standards. Nobody has any clue about how to explain this, and nobody wants to experience that. So, we hold more money back, we don't necessarily want to invest in the market and by default, people are saving more.
Dan ArielyWhat kind of people would be able to rationalize better than other people? Better storytellers, right? Creative people, right? Because if you're creative, you find more ways to cheat and still yourself a story about why this is okay.
Dan ArielyI don't want to say that the poor are inherently cognitively diminished, but at the end of the day of making difficult, tough decisions, it's very hard to have the energy to think about things with the right mindset.
Dan ArielyMoney is all about opportunity cost. Every time you spend on something, that's something you can't spend on something else.
Dan ArielyIt is true that from a behavioral economics perspective we are fallible, easily confused, not that smart, and often irrational. We are more like Homer Simpson than Superman. So from this perspective it is rather depressing. But at the same time there is also a silver lining. There are free lunches!
Dan Ariely