Evolution Responsible For Money Beliefs

Blame Your Money Behavior on Evolution


It's commonly thought that the way we handle our own finances has much to do with our parents' approach to money. That's an easy enough concept to grasp, but what if I told you that some of your feelings about money may have to do with evolution? Thousands of experiments have demonstrated that humans prefer relative social ranking to overall financial status. The Los Angeles Times article titled "Why people believe weird things about money" gives this example:

Would you rather earn $50,000 a year while other people make $25,000, or would you rather earn $100,000 a year while other people get $250,000? Assume for the moment that prices of goods and services will stay the same. Surprisingly — stunningly, in fact — research shows that the majority of people select the first option; they would rather make twice as much as others even if that meant earning half as much as they could otherwise have.

While it's compelling news, I can't imagine why anyone would choose to earn half as much just for competition's sake. It's so not savvy!

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