Today’s guest on the Consumerism Commentary Podcast is Gary Belsky, author of the book Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the Life-Changing Science of Behavioral Economics and Editor-In-Chief of ESPN the Magazine.
Gary and Tom Dziubek discuss behavioral economics and how understanding how we make decisions involving money can help us make better decisions.
If you like this podcast, please vote for us in the First Annual Plutus Awards for “Best Personal Finance Podcast.” Thanks!
Production Number: S02E19
Segment Number: 62
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Table of contents
[00:00] Introduction from Flexo
[00:32] Interview with Gary Belsky
– [00:47] Gary’s background
– [03:44] Behavioral economics
– [04:36] “Bonuses” vs. “Rebates”
– [06:00] Mental accounting
– [09:42] Understanding and combating your weaknesses
– [12:12] The sunk cost fallacy
– [14:06] Maximizers and satisficers
– [16:24] Ignoring the base rate
– [17:50] Self-insuring yourself through savings
– [18:24] Understanding anchoring
– [19:37] Fighting overconfidence in personal finance
[22:10] End
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{ 3 comments }
Good score! I wonder how much Gary makes as the Editor in Chief of ESPN magazine, and whether he gets to meet all the famous pro athletes! This is an example of someone who is putting his interest and background to good use by writing a book!
Good point on labeling the government stimulus checks BONUS checks instead of rebate checks.
Fantastic examples and reasons why framing is important. Mental accounting is important and dangerous. Gary, just stay away from the car dealers!!
Love behavioral economics. I firmly believe PF is so much about psychology.
Best, Sam
I know he’s been rubbing a few elbows…when I revealed my Oakland Raiders allegiance he told me he sat next to Jim Plunkett at the ESPYs. Lucky guy.
I find your podcasts to be consistently good. Tom Dziubek is a good host, asking intelligent questions. I have sampled quite a few podcasts, especially from bloggers I have liked. Yours is the best.
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