The Irrationality of Free

One of the books I’ve been reading for Economics of Happiness, the best connections class to make you happy (maybe except for the wine-tasting one) is Predictably Irrational by Dan Ariely, who examines some of the incentives and day-to-day interactions we have, how they affect our decisions, and more specifically, how they nudge us towards irrational decisions. One idea that we can’t deal with very well is the idea of free, or costing zero. If something is free, or costs zero, our decision making about that thing changes considerably. Predictably Irrational discusses how when presented with an otherwise great deal Continue reading The Irrationality of Free

Keynes vs Hayek

In the world of economic study there are many different schools of thought, but two influential economists have steered the way for modern economics. John Maynard Keynes and Friedrich August Hayek were both pioneers of the early twentieth century. They developed economic theory that would shape polarizing sections of the economic belief. Keynes was a product of King’s College, Cambridge and his general theory was an examination of the economic forces behind the Great Depression. But while Keynes was developing his own theory on employment and interest rates, Hayek was doing much of the same. Hayek was an Austrian native Continue reading Keynes vs Hayek

We Performed a Free Money Experiment, Results: Very Few Takers

Last Friday fellow blog writer Janne and I decided to run a little experiment. The idea was simple enough: offer free money to everyone and see if they take it. The results were not so simple: hardly anyone took our money. Now it leaves us wondering why. Let’s set up the circumstances. Janne and I began tabling outside the SUB at 10:30 and stayed there until 12:00. All that was on our table was a jar of coins and 1 dollar bills, as well as sizeable sign that read “Free Money, No Joke No questions” with an arrow pointing to Continue reading We Performed a Free Money Experiment, Results: Very Few Takers

Everything You Need to Know About Bitcoin

In the past few years you’ve probably heard the term bitcoin tossed around, which is hard to grasp for most who are unfamiliar with non-tangible currency. So here’s the rundown on everything you need to know in order to understand the world of digital currency. Bitcoin is a payment system as well as a digital asset invented by someone who operates under the name “Satoshi Nakamoto”, which was released in 2009. Bitcoin is whats known as a P2P (peer to peer) system which essentially means that you can send bitcoin from your computer, tablet, smart phone or other device, to Continue reading Everything You Need to Know About Bitcoin

The Why Axis: Bribing People and Competition

Here’s a delightful discussion of the main points in the first two chapters. Next Monday Geremia will be taking you for a ride along chapters 3 and 4, so please read along! Chapter one They dive right into the juicy stuff. What incentivizes people? Why are incentives so tricky? Gneezy and List hammer home the point that monetary incentives don’t always work in your favor. Sometimes, like for poor Rebecca and her daycare, putting a money penalty effectively makes the problem worse. As the authors explained, there’s lots of reasons for this. For starters, she set the penalty at $3 Continue reading The Why Axis: Bribing People and Competition

What Percent are You In, and Will it Make You Happier

Would you rather make $100,000 a year or $200,000 a year? You probably think that’s a dumb question, and in its current form, it is. Of course you would rather take home twice the money. You can make the argument that you’d have to work more, or work in a field you don’t like, but for this case, we’re assuming that for the same job, if you could either make 100,000 or 200,000 dollars, you’d pick 200,000. However, the answer may actually change based on what your peers make. Researchers have found people are happier based on their relative wealth Continue reading What Percent are You In, and Will it Make You Happier

Big Bills = More Crime

Imagine two shady characters, making a swap over briefcases. One ends up with cocaine or something, but the other opens his briefcase to reveal $100,000 in cash. Probably happens more frequently than you think. Now imagine that the $100 bill no longer exists and they want to make the same transaction. That dude’s got to lug around five briefcases now and that’s not suspicious at all. I’m making light of the situation, but a recent study by Peter Sands of Harvard gives a good argument that terminating big denomination notes would hurt criminal activity, and have little to no negative effects Continue reading Big Bills = More Crime