AS I stand at the gas station filling my tank, the meter tallies how much it’s going to cost me. At this station, a gallon is $4.26, and as the meter passes the $20 mark, then the $30, I realize that I am paying too much attention to the price of gasoline. I bet you are too.Looking back at my family’s expenses over the past few years, I see big increases in our health care costs and in how much we pay for food. The rise in what we spend on gas is not nearly as extreme as our increases in categories like electricity and telephone. So why does the amount we spend on gasoline feel so enormous? I think it is because of the way we buy gas. (more…)

A few weeks ago I talked at Google.

It was an interesting visit — they are clearly a very cool company — almost as cool as they think they are.

 In case you have nothing better to do, here is the link to the talk itself.

A few weeks ago I had the privilege of hanging out with the gang from Radio Lab. We had some informal chats about research and as a consequence I decided to try and conduct a few 5 minute interviews with different researchers about one exciting project.

I liked the outcome of the first few, so I decided to make it into a podcast… (more…)

Do we get to attached to stuff?

Moving and unpacking (which is what we have been doing), is a good test of attachment.

This video was produced by Spark Creative and Diamond consultants — thanks

Houses are very personal to many people, and often making decisions about houses and moving include strong elements of attachment (the endowment effect?) to the house and to the stuff that fills it up.

Here is a short interview with the nice people who are selling us their home about their feelings for the house:

And an interview about their feelings about getting rid of stuff:

As it turns out (see promotion below), automobile manufacturers are not the only ones trying to entice consumers with free gas — the Shady Lady brothel has just joined this new trend (see a story about this). I am guessing that free gas is effective in getting people to buy cars — at least relative to direct discount — but I am wondering what is the sense in discounting brothel related services. Perhaps it is meant to give people the feeling that their drive to and from the place is free!

From a standard economic perspective, gifts are a waste of money. Imagine that you invite me over for dinner one day and I decide to spend $50 on a bottle of wine. There are a bunch of problems: To start, I am not sure what wine you would like the most. And besides, maybe you’d prefer something else, like a book, a DVD, or a blender. This means that the bottle of wine that cost me $50 might be worth, at most, $25 to you. (more…)

After 10 years at MIT, this is my first official day at Duke, and it is wonderful to be here. MIT was wonderful in many ways but it was time to look for new adventures and I am delighted that I found a new home at Duke.

Duke is also where I got my PhD, and coming back feels like being a student again. The one odd thing about this move is that my advisers and teachers from my PhD years will now be my colleagues, and I don’t think I will ever be able to see them in this new role. I think that advisers are a bit like parents—they are in this role forever. But feeling like a student again is a wonderful thing. I get to feel caring, warmth, and I get to look forward to many discussions over coffee with my new colleagues.

It is wonderful to be back.

Dear Dan,
In 1996 at the age of 50 my wife and I built a new house, which contained everything we always said we wanted to have. It was larger than we really needed since the children had grown and left home.

During the 6 to 8 month building period, we continually made choices and decisions that led to the spending of large amounts of money. In fact, when you are building a house and negotiating with builders and suppliers spending in the thousands becomes a normal part of life. (more…)

So this is it. We are moving into a new house in a few weeks, now the question is what we should fix, and to what degree …