Why Do People Do Dumb Things? | MHFI 145

Doug chats with his friend, Dusti, about cognitive biases and behavioral economics.

They discuss how our financial habits are heavily influenced by emotions, and why we oftentimes spend money on unnecessary things.

Behavioral Economics

  • Why money is emotional
  • Buying more than we can afford
  • How group mentality affects our decision-making

Cognitive Biases

  • Availability bias
  • Confirmation bias
  • The struggle of having too many choices
  • The ostrich effect

Connect with Dusti on Instagram.

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**Disclaimer: The podcast is for informational purposes. Maybe entertainment but we won’t even make such a claim. You shouldn’t take the info as financial, legal, or tax advice. We aren’t certified financial planners or advisors. We’re not qualified for much. So get advice from professionals.**

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0:00 – Intro

1:20 – Who is Dusti?

12:12 – Behavioral economics and the emotional side to money

18:11 – How you can support us

21:02 – Availability bias

23:10 – Confirmation bias and how society affects our buying decisions

29:39 – Is having fewer options better?

34:28 – People overvalue what they own

43:06 – Going along with everyone else

50:04 – Loss aversion

53:20 – The ostrich effect