Growth Mindset Psychology: The Science of Self-Improvement Why We Don't Understand Money: How to fix your thinking flaws - [Cognitive Biases #3]
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Dec 2, 2025 Discover the sneaky ways our brains mismanage money. Unravel how the Decoy Effect tricks us into overspending and why Sir Isaac Newton fell prey to the Sunk Cost Fallacy. Learn the importance of the 'Consider the Opposite' strategy to combat anchoring biases. Explore the surprising pitfalls of Information Bias, where more data can lead to worse decisions. This enlightening discussion reveals that true financial wisdom isn't just about numbers; it's knowing how our minds can mislead us.
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Anchors Warp Perceived Value
- Anchoring makes any initial number strongly shift our perceived value of things.
- Experts resist it, but most people remain influenced even when warned.
Neutralize Anchors By Considering The Opposite
- Use the "Consider the Opposite" strategy when faced with an anchor.
- Mentally flip the anchor to neutralize its pull and judge the price on its own merits.
Framing Changes Decisions Without New Facts
- Framing changes choices without changing facts by highlighting different aspects.
- Businesses and politicians exploit framing to make options feel emotionally preferable.
