The Mind of the Market: How Biology and Psychology Shape Our Economic Lives
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"[A] captivating raconteur of all the greatest hits of behavioral, evolutionary and neuropsychology . . . Fascinating."―Los Angeles Times Book Review
How did we make the leap from ancient hunter-gatherers to modern consumers, and why do people get so emotional about financial decisions? The national bestseller The Mind of the Market uncovers the evolutionary roots of our economic behavior.
Drawing on the new field of neuroeconomics, psychologist Michael Shermer investigates what brain scans reveal about bargaining, snap purchases, and establishing trust in business. He scrutinizes experiments in behavioral economics to understand why people hang on to losing stocks and why negotiations disintegrate into tit-for-tat disputes. He brings together findings from psychology and biology to describe how our tribal ancestry makes us suckers for brands, why researchers believe cooperation feels (biochemically) like sex, and how even capuchin monkeys get indignant if they don't get a fair reward for their work.
Entertaining and eye-opening, The Mind of the Market explains the real science of economics.
water refreshes; heavy bodies descend, and lighter substances fly upwards, by the necessity of their own nature; nor was the invisible hand of Jupiter ever apprehended to be employed in those matters.” Rothschild also suggests that Smith may originally have picked up the metaphor from Shakespeare, in Macbeth: Come, seeling night, / Scarf up the tender eye of pitiful day, / And with thy bloody and invisible hand / Cancel and tear to pieces that great bond / Which keeps me pale. There is, however,
happenstances of history. Gould’s type specimen of contingency is the panda’s thumb. In a 1978 essay, “The Panda’s Peculiar Thumb,” Gould showed that the panda’s thumb is not a predictable design of nature’s necessitating laws of form, but an improvised contraption constructed from its evolutionary history.3 The panda’s thumb, in fact, is an example of a bottom-up design, the product of the tinkering of evolution, which uses whatever biological equipment is available. A top-down intelligent
spent (now or later, a sure thing or a risky gamble). Credit cards reframe cash into a different mental accounting category that makes it much easier to spend. MIT marketing professors Drazen Prelec and Duncan Simester put this principle to the test by hosting an actual sealed-bid auction for Boston Celtics basketball game tickets. Half the people were told that if they won the bid they would have to pay for the tickets in cash, while the other half were told that if they won the bid they could
developed, sailors helped themselves to free food on the hoof whenever they wanted. “The two percent of folks who appear to unconditionally prey on others keep the rest of us on our toes,” he concludes, “both individually and as a species.” As part of his evidence, Zak cites the case of a woman who has a rare genetic disorder that caused her amygdala to calcify and die. “The amygdala is a primary target for oxytocin in the brain that helps maintain the trust/distrust balance,” he notes, “and she
based on a written description of how they behaved in an exchange involving, for example, borrowing and paying back (or not) money. After reading the description, each subject was asked to rate how important it was to remember the individuals, using a seven-point scale. In the second experiment, participants categorized the individuals on the seven-point scale as before, but then had the opportunity to look at photographs of their faces. They were then presented with a face recognition test. The