4 ms·

Could also be a version of the Hawthorne effect. [1] In this particular case the money was a proxy which was more powerful than words meant to say 'your answer

by gist 10y ago

Could also be a version of the Hawthorne effect. [1] In this particular case the money was a proxy which was more powerful than words meant to say 'your answer is important' or 'your vote counts'. It's actually hard for me to put in words this concept but intuitively it is what seems is happening. Ok so let's take as an example upvote/downvotes on HN. Many of us give little thought to the impact and do it impulsively at least in some cases. Now let's pretend we know there is an impact, even minor, financially. We will pay more attention and I feel at least be more likely to carefully consider voting in either direction. Remember with money also people tend to not want to be wasteful it doesn't feel good. Nobody takes even pennies and throws them in the trashcan. [1] https://en.wikipedia.org/wiki/Hawthorne_effect https://en.wikipedia.org/wiki/Hawthorne_effect

Swizec 10y ago
> Nobody takes even pennies and throws them in the trashcan. And yet they should. https://what-if.xkcd.com/22/ https://what-if.xkcd.com/22/ If you spend more than 3.6 seconds actively thinking about a penny, you value your time at less than $10/h. This comment is unfortunately self-referrential. Oops
- gist 10y ago
  Well not to dispute some of your points but let me introduce another concept here. That is the act of 'forced savings'. And example of this is when you build equity in something that doesn't appear to be a good idea in the long run financially when compared to another alternative. Ok here is an example. Let's say that your home that you are paying a mortgage on offers a 5% increase in value per year (totally made that up) vs. putting the money in a money market that pays 6% per year (definitely totally made that up). On the surface the money market is a much better return let's stipulate and observe. After all you have liquidity and I will even further assume that the 6% is guaranteed. But wait a second. If the money is tied up in a house you can't spend it. In the money market you can. So the house is forced savings and in the end you might very well end up with more, all else equal. I say this as someone who just took cash that I had and bought a sort of expensive car by the way. Realizing that if I had the money in more real estate (which I also own) I most likely wouldn't have bought the car (since I don't like to finance or lease even though in theory it can make more sense financially).
  - Swizec 10y ago
    I completely agree. And I don't think it works with pennies. Pennies are heavy and not worth much. You need a 100 of them to get $1. That's a lot of coins. For $100 you'd need 10,000 coins and that's going to start taking significant space.[1] There's a reason people don't use pennies a lot. [1] https://m.youtube.com/watch?v=9sJcyRMVufM https://m.youtube.com/watch?v=9sJcyRMVufM

by gist 10y ago

Swizec 10y ago

> Nobody takes even pennies and throws them in the trashcan. And yet they should. https://what-if.xkcd.com/22/ https://what-if.xkcd.com/22/ If you spend more than 3.6 seconds actively thinking about a penny, you value your time at less than $10/h. This comment is unfortunately self-referrential. Oops

gist 10y ago
Well not to dispute some of your points but let me introduce another concept here. That is the act of 'forced savings'. And example of this is when you build equity in something that doesn't appear to be a good idea in the long run financially when compared to another alternative. Ok here is an example. Let's say that your home that you are paying a mortgage on offers a 5% increase in value per year (totally made that up) vs. putting the money in a money market that pays 6% per year (definitely totally made that up). On the surface the money market is a much better return let's stipulate and observe. After all you have liquidity and I will even further assume that the 6% is guaranteed. But wait a second. If the money is tied up in a house you can't spend it. In the money market you can. So the house is forced savings and in the end you might very well end up with more, all else equal. I say this as someone who just took cash that I had and bought a sort of expensive car by the way. Realizing that if I had the money in more real estate (which I also own) I most likely wouldn't have bought the car (since I don't like to finance or lease even though in theory it can make more sense financially).
- Swizec 10y ago
  I completely agree. And I don't think it works with pennies. Pennies are heavy and not worth much. You need a 100 of them to get $1. That's a lot of coins. For $100 you'd need 10,000 coins and that's going to start taking significant space.[1] There's a reason people don't use pennies a lot. [1] https://m.youtube.com/watch?v=9sJcyRMVufM https://m.youtube.com/watch?v=9sJcyRMVufM