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Waiting For The Pay Off: Psychologists Show That 'Money Changes Everything'
sciencedaily.com — It's been said by everyone from Cyndi Lauper to Alex Rodriguez that "money changes everything." Now psychologists at Washington University in St. Louis have published a paper to support that
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- dongcha9, on 10/12/2007, -0/+6i'll bet coke and pepsi are happy
- nixonrichard, on 10/12/2007, -1/+7You can see the results of this study just from vending machines. People will gladly pay $1.00 for 500mL of soda from a vending machine when they could get 2L from a store for the same price. I think the difference with money is we all already have instant access to money (credit/debit cards, cash). If we all kept a wallet full of soda in our pockets, I'm sure we would be less willing to take the instant gratification.
- masgrada, on 10/12/2007, -2/+7This test is veeerrry flawed. They assume that you actually want beer and candy or whatever.
- bIuebonics, on 10/12/2007, -5/+0it's a psychology study, that means it's inherently flawed... no need to be redundant about it ;P
- CapJackSparrow, on 10/12/2007, -2/+0http://digg.com/offbeat_news/A_selection_from_Walden_Pond_by_Henry_David_Thoreau
- mikefitz2, on 10/12/2007, -1/+13deferred gratification, from wikipedia;
The marshmallow experiment is a famous test of this concept conducted by Walter Mischel at Stanford University and discussed by Daniel Goleman in his popular work. In the 1960s a group of four-year olds were tested by being given a marshmallow and promised another, if they could wait 20 minutes before eating the first one. Some children could wait and others could not. The researchers then followed the progress of each child into adolescence, and demonstrated that those with the ability to wait were better adjusted and more dependable (determined via surveys of their parents and teachers), and scored an average of 210 points higher on the Scholastic Aptitude Test.- squeevey, on 10/12/2007, -0/+6It's funny you should mention the marshmallow experiment. I just heard about this while photographing an event yesterday. I thought it was quite interesting about how that lended to different personality types. Although it was mentioned that these people can learn to change their behavior.
- mikefitz2, on 10/12/2007, -3/+2"Although it was mentioned that these people can learn to change their behavior."
I've always been told that people don't fundamentally change over time. For example, the beaten woman that insists her lover is a kind/gentle man and shouldn't go to jail for 18 months due to abuse charges, even to the extent of deviating from the truth in her court testimony to ensure his exemption. - MrFatalistic, on 10/12/2007, -3/+0Increase this in scale and I think you'd get some different answers.
If you asked me 500$ now or 5,000 later, I'd take the 500 nearly every time. a bird in hand...
5$ or 50$ on the other hand, 5$ is nothing, it's easy to refuse. 500$, well, unless that's your hourly salary... - shitthisfook, on 10/12/2007, -0/+4@mrfatalistic:
You'd take the 500 nearly every time? Are you ***** stupid?
- badbox, on 10/12/2007, -4/+8This has to be the most nonsensical article ever.
Of course someone is gonna wait for money because money is obviously useful and can be applied to anything.
What is $50 of Coke gonna get you except a full fridge and unhealthy diet? It's not like you can resell it.
Even if someone randomly dropped off $50 of coke... I probably wouldn't take it. WTF do I want with all that soda?
It's like someone asking you if you want $50 of sandpaper. Probably not. What in the hell are you gonna do with it?- nixonrichard, on 10/12/2007, -0/+3Yeah, but the study held true for beer too . . . I certainly know what I would do with $50 worth of beer! Mmmmmm . . . beer.
- applessauce, on 10/12/2007, -0/+0You're right. They call this diminishing marginal utility. $50 worth of soda is more attractive than $5 worth of soda, but is it really ten times more attractive? People's decisions show diminishing marginal utility even for money (meaning that even $50 in cash doesn't seem ten times as attractive as $5 in cash), and the discounting could be steeper for things that you consume, like soda.
One way to test this is with gambles. For instance, have people choose between $5 for sure vs. a 20% chance of getting $50, or between $5 worth of soda for sure vs. a 20% chance of getting $50 worth of soda. If people are more likely to choose the sure thing for the soda, that could be because the additional soda just doesn't seem as valuable.
It's possible that the study already took this into account and controlled for diminishing marginal utility somehow, although the article doesn't mention it. I guess we'd have to look at the study itself to sure.
- iShouldveKnown, on 10/12/2007, -6/+0As in the famous words of Biggie, "Mo' Money, Mo' Problems"
And money doesn't change the way people think. The stuff you DO with the money does.
Dugg because psychologists seem to be getting smarter everyday... *rolls eyes*- ashrafneo, on 10/12/2007, -11/+3i bet those psychologists are ten time more smarter than u u little ***** and 50 times more productive. So sit there and type away you little dick. ***** idiots on digg piss me off.
- ProximaC, on 10/12/2007, -5/+2"***** idiots on digg piss me off."
You must really hate yourself. - iShouldveKnown, on 10/12/2007, -1/+0@ashrafneo
"ten times more smarter"
need I say more?
- kingfoot, on 10/12/2007, -7/+1umm, i have a question, '...at Washington University in St. Louis...' how does that work!?
- ubuwalker31, on 10/12/2007, -0/+1xiliquiern beat me to the punch. Wash U, as it is affectionately known, is one of the top 10 research universities in the US.
- kingfoot, on 10/12/2007, -1/+1well that makes sense, shouldnt they say 'george washington U.'?
- RadiantBeing, on 10/12/2007, -1/+5All they proved is that no one wants $50 worth of soda.
- GauntletWizard, on 10/12/2007, -1/+2I'd take $50 worth of soda, if somebody were giving it away.
Unless it was diet pepsi. Yuck. - BeyondGoodNEvil, on 10/12/2007, -1/+4You couldn't pay me to drink a soda, and some of you are ruining your health by drinking them every day.
- GauntletWizard, on 10/12/2007, -1/+2I'd take $50 worth of soda, if somebody were giving it away.
- mikefitz2, on 10/12/2007, -2/+1wrong topic
- JesusIsSatan, on 10/12/2007, -0/+4But people have different personal preferences for beer, candy, and soda. Money can be exchangeable for the highest item/service a person that a person values. The same reason why someone chooses less cash over a gift certificate to a specific store. A failing grade for this PhD paper.
- SirZRX, on 10/12/2007, -1/+1i offer my self as volunteer, give me just a few million dollars and expect some huge changes xD
- seanone, on 10/12/2007, -0/+1Amazing Science. American capitalists find greed bosun. The people in the test were probably saving money for a ticket to Europe.
- LoLaLand, on 10/12/2007, -1/+1I read the title and just said "duh".
- synonym, on 10/12/2007, -0/+1its right to discount beer, candy, cola, whatever. $50 worth of them cannot be exchanged for $50 cash, whereas $50 cash can be exchanged for $50 of almost any crap you can name, but try offloading the crap afterwards.
- AmpleJar, on 10/12/2007, -0/+0FTA:
"Thus, we commit to a monthly payroll withdrawal because we intuitively understand our tendency to discount. We know that we are likely to take a smaller, immediate reward rather than wait for the larger, long-term reward that comes from saving for retirement."
....uhhhh no. I just don't want to have to move the money to a retirement account myself. - bIuebonics, on 10/12/2007, -1/+0psychology is a faulty science :P
http://wwwcdf.pd.infn.it/~loreti/science.html - Infiniterb, on 10/12/2007, -0/+1Ever hear of the saying "A dollar today is worth more than a dollar tomorrow?"
The real question I have is the amount of money they are offering now compared to the $50 dollars in 6 months. I can take that undisclosed amount of money, invest it, gamble it, etc. and possibly make more than the $50 six months from now.- operand, on 10/12/2007, -1/+0Or what more than 50% of people would do - spend it.
- operand, on 10/12/2007, -1/+0"For instance, if the average person were given the choice between an amount of soda right away and $50 worth of soda that they would have to wait six months to get, most people would take significantly less than $50 worth of soda now (discounting the value of the delayed soda considerably). "
Not a shocker there as I would imagine the Lottery Commissions across the United States would also note how many prefer lump payments over annual installments any day. People want Instant gratification. Why not have it now instead of waiting?- operand, on 10/12/2007, -1/+0Sorry, I misread the statement. I should restate:
A better way would be the following:
I would imagine the Lottery Commissions across the United States would also note how many prefer lump payments over annual installments any day. People want Instant gratification. Why not have it now instead of waiting? I don't buy that people would want to wait. - BeyondGoodNEvil, on 10/12/2007, -1/+0The opportunity cost of future returns which may or may not come is certainly worth considering. It's also an issue of trust. If you trust the source of the future gift, you are more likely to wait, but if you don't know how reliable the source is, you want the gift right now.
However, it makes sense that those who chose to receive delayed gifts of more, eventually got higher scores on SAT. They valued their future more than the present, and correctly estimated the trust-worthiness of the source claiming to give them the future gift.
- operand, on 10/12/2007, -1/+0Sorry, I misread the statement. I should restate:
- SlayerKid99, on 10/12/2007, -0/+080% of the time money does give people happiness.
- Gatesophile, on 10/12/2007, -1/+274% of all statistics are made up on the spot.
- stvspl, on 10/12/2007, -0/+1Duh.
- bighed03, on 10/12/2007, -0/+1is it just me or does this seem like common sense? unless you're in some sort of a bind, a person would always take more money at a later date if guranteed. a drink or beverage item has one sole purpose... to be consumed. money, however, can be used in whatever way you like.
- BARapa, on 10/12/2007, -0/+1Yea...Wash U finally comin' up in this cold, dark world.
I have a Mac! - CChris89, on 10/12/2007, -0/+0www.thatsgreatjuice.com
It great for ou and you can make money with it also.
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