Does your heart beat faster in a sale? On Black Friday, retailers aim squarely at human foibles and natural biases to increase buying, as Kevin Roose explains. For example: retailers know that people will frame an item by its apparently low up-front price, perhaps advertising a TV as low-cost but not disclosing additional fees and extras.
Catch up clause
Using peer pressure to improve money choices may not work if people are demoralised by seeing their peers succeed. Behavioural economist Katherine Milkman says in an interview that workers in an experiment whose colleagues saved for a pension were a third less likely to do so themselves. The article asks: Did the savers have a head-start that dissuaded others?
Owning your own home may not make you wealthier than renters, research suggests. This may be because of a substitution effect – owning a home actually reduces the amount of wealth available for other investments. But it’s also true that many people might become homeowners because they have more money to begin with, the researchers note.