Archive for the ‘calculated risk’ Category

The Crass Construction of Desire

August 8, 2007

Smooth Persuaders: Leveraging Human Nature.

…Would you mind? The pf community is a great place for otherwise scarce information about debt reduction. Pfbloggers are making a public commitment to debt reduction — a powerful motivator. Perhaps you will post something to the next carnival, respond in kind? Since you’re reading this, it only makes sense.

In a brazen and hamfisted way, the opening section of our debt reduction carnival attempted to incorporate many of the common techniques advertisers and politicos use to separate us from our money:

  • I appealed for a sense of commitment, “would you mind?” by making an innocuous request.
  • I mentioned that there were limited resources in terms of debt reduction advice (patently absurd). That’s an appeal to your fear of scarcity, and the tendency to value things that are scarce, or even might be scarce.
  • I stated that other people are doing it too. In other words, why don’t you? Particularly in ambiguous situations, we model our behavior on what other people are doing.
  • I appealed to your sense of wanting to return a favor. Reciprocity is simply one of the foundations of society, and as social creatures we feel a strong desire to reciprocate. A big part of this is that we generally hate to feel we owe others something! (Funny, given the personal finance context of trying to reduce or avoid debt…)
  • There’s a war going on out there — and if you don’t watch out, you and your pocketbook will be the casualties. That’s one of the central thrusts of Dr. Robert Cialdini. His book has sold over 1 million copies. If you think you are largely immune to the ploys of advertising, read on!

    Cialdini on unconscious modes of persuasion.
    I mentioned Cialdini, a social psychologist, in an earlier post. You can find his books in the business section. (A recent New York Times article “Who’s Minding the Mind?” covered the surprising range and variety of powerful ways we can be manipulated — without any conscious knowledge of what is going on. In the Yale study, people’s judgment was strongly affected simply by handing them a cup of coffee.) Cialdini writes about the ways in which human beings respond automatically, without thought. Here are the ways he outlines that we can be easily manipulated: (more…)

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    Prevent a Financial Tailspin

    June 1, 2007

    Dear Diary,

    I got another parking ticket today. It was a calculated risk. To get parking tickets two days in a row is intolerable. Fortunately, as you know, I keep a box of cash in the bedroom. This is my random way of saving money. Whenever I have single dollar bills, I chuck them in the box. Sometimes fives. Occasionally I just go wacky and put a ten or a twenty in the box.

    I figure, that’s how I spend money (where the hell did it go?) so why not save it that way?

    I’m going to take $80 out of the box and deposit it in my account. Maybe I’ll deposit the whole box. It hasn’t been running for very long, this particular box. Previously I’d only used the box for fun money. But I think using it as padding against feelings of hopelessness is an equally good cause. At least. Once those bad thoughts start to snowball it can get bad as bad gets.