Hat tip to Jen Wu, who let me know about this excellent one-hour documentary from Maryland Public Television titled: “Thinking Money: The Psychology Behind Our Best and Worst Financial Decisions,”
Here are two of the more interesting segments (2-3 minutes in length):
Horizontal Wine Tasting Experiment: Test subjects taste three different wines at different price points while lying horizontal in a functional MRI machine. The goal is to test how the brain influences our spending decisions. Each of the subjects is told the price point of wine prior to drinking it. Have your students guess which wine provides the most pleasure to the drinker; the low-end, middle or high-end brand. Of course, the twist here is that the low and high-end wine both came out of the same $10 bottle:). In this case, your taste buds aren’t making that decision, your prefrontal cortex is.
Choice Overload Jam Test: This test compares consumers’ response to seeing a table at a supermarket with 24 flavors of jam compared to 6 flavors. Have your students guess which table led to more consumer purchasing decisions and reasons for their answer. The researcher goes on to apply the same principles to company retirement plans and finds that when more options are offered, fewer employees participate. Why?
Here is a description of the hour-long documentary:
Host Dave Coyne leads the audience through an exploration of what behavioral economics has to tell us about how and why we spend, save (or don’t) and think about money. We travel the country meeting some of the innovative thinkers who mix economics with psychology. Their experiments and insights into our financial behavior will enlighten and often amuse us as we learn to recognize how both our brains and the marketplace can trick us into spending money we shouldn’t.
Coyne is a wisecracking everyman who stands in for us as we are intrigued and excited by a whole raft of techniques, apps, websites and ways of thinking that help us to save for the types of things that make our lives more secure: emergency funds, our kids’ education, and ultimately our comfortable retirements. He will see a horizontal winetasting in California that makes us re-think how we look at price tags, and will get to meet the person whose retirement he is saving for: an age-morphed version of himself in a Stanford virtual reality lab. A mix of fascinating theory and practical takeaways, Thinking Money is designed to decrease the stress and increase the bandwidth in our lives.