Comments on: 3 experiments with money http://www.financialjesus.com/how-to-get-rich/3-experiments-with-money/ Some people are rich long before they have money Thu, 09 Feb 2012 12:03:36 +0000 hourly 1 http://wordpress.org/?v=3.1 By: dave http://www.financialjesus.com/how-to-get-rich/3-experiments-with-money/comment-page-1/#comment-8824 dave Sat, 10 Sep 2011 14:56:01 +0000 http://www.financialjesus.com/?p=135#comment-8824 I 100% agree. I 100% agree.

]]> By: dave http://www.financialjesus.com/how-to-get-rich/3-experiments-with-money/comment-page-1/#comment-8823 dave Sat, 10 Sep 2011 14:28:14 +0000 http://www.financialjesus.com/?p=135#comment-8823 The $100 ultimatum game has no real value Lets say the only difference to my altered version is instead of $100 its $100,000. (or this would work with even $10,000) If person 'A' wants to keep $70,000 and offers $30,000 to person B. (70-30) As a one time offer. And the referee asks person B on whether they agree or not. -Mostly everyone needs $30,000 so who in their right mind would turn down $30,000??? The fear of losing such a large sum would spark the self interest in a person more than some irrational moral anger. This is what person 'A' banks on. Person B is left with a choice.... it all comes down to him. What will he do?? Take $30,000 or nothing? The $100 ultimatum game has no real value

Lets say the only difference to my altered version is instead of $100 its $100,000. (or this would work with even $10,000)
If person ‘A’ wants to keep $70,000 and offers $30,000 to person B. (70-30) As a one time offer. And the referee asks person B on whether they agree or not.
-Mostly everyone needs $30,000 so who in their right mind would turn down $30,000??? The fear of losing such a large sum would spark the self interest in a person more than some irrational moral anger. This is what person ‘A’ banks on.

Person B is left with a choice…. it all comes down to him. What will he do?? Take $30,000 or nothing?

]]> By: Don http://www.financialjesus.com/how-to-get-rich/3-experiments-with-money/comment-page-1/#comment-7822 Don Sat, 19 Feb 2011 14:23:43 +0000 http://www.financialjesus.com/?p=135#comment-7822 Thinking about money as an economist or "scientifically" as Dusty put it has clearly proven more interesting than a moral understanding. Granted, trying to understand people's behavior and decision making process is important to try and interpret but not at all more important than people actually understanding WHAT they're doing--Rationality-- rather than WHY they are doing it--Irrationality. Yeah it's nice to think we live in a world where we can always make the choice that makes us the most happy but that's ignorant. That's why the biggest economies of the world are all suffering right now; everyone got so used to a comfortable lifestyle that they refuse to give it up. It's very easy to get caught up in the Short Run outcome but it's essentially very straightforward to fix a declining economy if we think about the Long Run. The statement "money is the root of all evil" is in itself, where the evil starts and grows. Rational thinkers are motivated by an understanding of monetary and fiscal policies and how economic interactions apply to their own profit maximizing model. Irrational thinkers are motivated by greed and fear and love and all other emotions you want to bring up and these initial motives cause them to grow larger and larger as fears and pessimism grow. In no way whatsoever does it make sense for someone to take less money just so they can have more than people around them, heteris parabis. (this is obviously a hypothetical model as price levels and the value of the dollar would also change). The second option would increase household/firm consumption and stimulate the economy even farther, leaving yourself infinintley better off than had you chosen option A. This is the reason US is facing the worst recession since the 1920's; because people don't understand how to think rationally or just don't try to. Irrational thinking isn't human nature; adaptation and overcoming obstacles is. "You've got to swallow the bad tasting medicine now if you want to get better in the future." Thinking about money as an economist or “scientifically” as Dusty put it has clearly proven more interesting than a moral understanding. Granted, trying to understand people’s behavior and decision making process is important to try and interpret but not at all more important than people actually understanding WHAT they’re doing–Rationality– rather than WHY they are doing it–Irrationality. Yeah it’s nice to think we live in a world where we can always make the choice that makes us the most happy but that’s ignorant. That’s why the biggest economies of the world are all suffering right now; everyone got so used to a comfortable lifestyle that they refuse to give it up. It’s very easy to get caught up in the Short Run outcome but it’s essentially very straightforward to fix a declining economy if we think about the Long Run. The statement “money is the root of all evil” is in itself, where the evil starts and grows. Rational thinkers are motivated by an understanding of monetary and fiscal policies and how economic interactions apply to their own profit maximizing model. Irrational thinkers are motivated by greed and fear and love and all other emotions you want to bring up and these initial motives cause them to grow larger and larger as fears and pessimism grow. In no way whatsoever does it make sense for someone to take less money just so they can have more than people around them, heteris parabis. (this is obviously a hypothetical model as price levels and the value of the dollar would also change). The second option would increase household/firm consumption and stimulate the economy even farther, leaving yourself infinintley better off than had you chosen option A. This is the reason US is facing the worst recession since the 1920′s; because people don’t understand how to think rationally or just don’t try to. Irrational thinking isn’t human nature; adaptation and overcoming obstacles is. “You’ve got to swallow the bad tasting medicine now if you want to get better in the future.”

]]> By: Nate http://www.financialjesus.com/how-to-get-rich/3-experiments-with-money/comment-page-1/#comment-7363 Nate Sat, 11 Dec 2010 02:46:15 +0000 http://www.financialjesus.com/?p=135#comment-7363 I disagree with the interpretation of experiment 2. Depending on how you define "everyone around you" the first option could be much better than the second. If everyone literally means everyone around me in, say, a 1000000000 mile radius then the first option gives you a situation where the every person earns half as much as you do. The price of goods and services is related to the wealth of everyone in the economy. In the first situation the average real income is much less than the average real income of the second situation. This turns the question into would i rather earn double or half the average real income of the economy I live in. Would you rather have 100 dollars to your name and live in a society where goods and services on average cost 1 cent or have 10000 dollars to your name in a society where goods and services on average cost 5000. I disagree with the interpretation of experiment 2. Depending on how you define “everyone around you” the first option could be much better than the second. If everyone literally means everyone around me in, say, a 1000000000 mile radius then the first option gives you a situation where the every person earns half as much as you do. The price of goods and services is related to the wealth of everyone in the economy. In the first situation the average real income is much less than the average real income of the second situation. This turns the question into would i rather earn double or half the average real income of the economy I live in. Would you rather have 100 dollars to your name and live in a society where goods and services on average cost 1 cent or have 10000 dollars to your name in a society where goods and services on average cost 5000.

]]> By: premium finance http://www.financialjesus.com/how-to-get-rich/3-experiments-with-money/comment-page-1/#comment-5821 premium finance Fri, 07 May 2010 09:01:39 +0000 http://www.financialjesus.com/?p=135#comment-5821 Good articles on the experiments with money and very informative site!! Good articles on the experiments with money and very informative site!!

]]> By: Roman http://www.financialjesus.com/how-to-get-rich/3-experiments-with-money/comment-page-1/#comment-1417 Roman Fri, 17 Apr 2009 14:15:15 +0000 http://www.financialjesus.com/?p=135#comment-1417 Thanks for your insight Alain! Thanks for your insight Alain!

]]> By: Alain http://www.financialjesus.com/how-to-get-rich/3-experiments-with-money/comment-page-1/#comment-1406 Alain Wed, 15 Apr 2009 19:39:19 +0000 http://www.financialjesus.com/?p=135#comment-1406 "It is the “love” of money that is the root of evil, not money in of itself." I do not totally agree.In sense that I partially agree. I belive...this is a WONDERFUL EXCUSE to round around the truth! Question: If the "love of money" is the "root" of evil...what's the "SEED" in this botanic example? and what are the fruits that makes other seeds etc? "money makes money" ave you ever listen this? You are translate the problem around a circle thinking to have the "magic formula" in the pocket. Actual economic system BUILT upon and around the concept "money" is falling down....and you continue to think "OH NO! money IS A GOOD THING!"... These experiments <strong>SHOWS</strong> how people have a distort perspective of money. Distorsion magnified by tv-spots and generally by society. “It is the “love” of money that is the root of evil, not money in of itself.”
I do not totally agree.In sense that I partially agree.
I belive…this is a WONDERFUL EXCUSE to round around the truth!
Question:
If the “love of money” is the “root” of evil…what’s the “SEED” in this botanic example? and what are the fruits that makes other seeds etc?
“money makes money” ave you ever listen this?
You are translate the problem around a circle thinking to have the “magic formula” in the pocket. Actual economic system BUILT upon and around the concept “money” is falling down….and you continue to think “OH NO! money IS A GOOD THING!”… These experiments SHOWS how people have a distort perspective of money. Distorsion magnified by tv-spots and generally by society.

]]> By: jean michel http://www.financialjesus.com/how-to-get-rich/3-experiments-with-money/comment-page-1/#comment-1206 jean michel Tue, 17 Feb 2009 07:09:28 +0000 http://www.financialjesus.com/?p=135#comment-1206 I decided to sail away as much as possible from it, but it's all over the planet, good luck for this crisis.. I decided to sail away as much as possible from it, but it’s all over the planet, good luck for this crisis..

]]> By: Roman http://www.financialjesus.com/how-to-get-rich/3-experiments-with-money/comment-page-1/#comment-935 Roman Fri, 09 Jan 2009 19:10:21 +0000 http://www.financialjesus.com/?p=135#comment-935 Thanks Trevor! Thanks Trevor!

]]> By: Trevor http://www.financialjesus.com/how-to-get-rich/3-experiments-with-money/comment-page-1/#comment-934 Trevor Fri, 09 Jan 2009 19:06:54 +0000 http://www.financialjesus.com/?p=135#comment-934 Interesting article... Interesting article…

]]>