Money And Financial behavior
,Lecture 1
It is about the psychological effects that money has on people’s behavior and the individual
and societal problems that arise accordingly.
- money is a integral aspect of all modern human societies.
- Also paradoxes about money and happiness
,Articles
, Money & Materialism
Money as a tool, money as a drug: The biological psychology of a strong incentive. By
Lea and Webley
Abstract:
Why are people interested in money?
1. if it is used as a tool, and by a metaphorical extension this is often applied to money:
it is used instrumentally, in order to obtain biologically relevant incentive
2. substances can be strong motivators because they imitate the action of natural
incentives but do not produce the fitness gains for which those incentives are
instinctively sought.
Biological explanation: Humans are social and cultural animals, and any observed human
behaviour is the product of a particular social and cultural environment interacting with
human nature: genetically adaptive instincts are always manifested in culturally specific
ways. Selective advantage is not an alternative to social and cultural factors as a kind of
explanation, but if an explanation is to be classed as “biological,” then selective advantage
must be part of it – even if the behaviour currently being explained, in current circumstances,
confers no such advantage.
The nature of money: Any substance or medium is within the scope of our discussion if it
fulfils or appears to fulfil the three basic functions of money: as a medium of exchange, a unit
of account, and a store of value
Motivation to obtain money:
- acts as an incentive
- Acts as reinforcer
The problem: The motivation to acquire money, however, is not directly adaptive, and has no
obvious parallels in the behaviour of other animals. Furthermore, it cannot be imagined to
result from some evolutionary process that has occurred within the hominid period
Tool Theory and Drug Theory
- Tool theory: On this view, money is not an incentive in itself; it is an incentive only
because and only insofar as it can be exchanged for goods and services (instrumental)
- Drug theory: Theory of money motivation asserts that money, too, intrudes on the
normal functioning of the nervous system. On this account, money acquires its
incentive power because it mimics the neural, behavioural, or psychological action of
some other, more natural incentive (cognitive)
Why should we use the Drug Theory? The core reason is that a drug is a functionless
motivator, and that is what we want to assert that money sometimes is.
Linking older theories to these theories:
,Lecture 1
It is about the psychological effects that money has on people’s behavior and the individual
and societal problems that arise accordingly.
- money is a integral aspect of all modern human societies.
- Also paradoxes about money and happiness
,Articles
, Money & Materialism
Money as a tool, money as a drug: The biological psychology of a strong incentive. By
Lea and Webley
Abstract:
Why are people interested in money?
1. if it is used as a tool, and by a metaphorical extension this is often applied to money:
it is used instrumentally, in order to obtain biologically relevant incentive
2. substances can be strong motivators because they imitate the action of natural
incentives but do not produce the fitness gains for which those incentives are
instinctively sought.
Biological explanation: Humans are social and cultural animals, and any observed human
behaviour is the product of a particular social and cultural environment interacting with
human nature: genetically adaptive instincts are always manifested in culturally specific
ways. Selective advantage is not an alternative to social and cultural factors as a kind of
explanation, but if an explanation is to be classed as “biological,” then selective advantage
must be part of it – even if the behaviour currently being explained, in current circumstances,
confers no such advantage.
The nature of money: Any substance or medium is within the scope of our discussion if it
fulfils or appears to fulfil the three basic functions of money: as a medium of exchange, a unit
of account, and a store of value
Motivation to obtain money:
- acts as an incentive
- Acts as reinforcer
The problem: The motivation to acquire money, however, is not directly adaptive, and has no
obvious parallels in the behaviour of other animals. Furthermore, it cannot be imagined to
result from some evolutionary process that has occurred within the hominid period
Tool Theory and Drug Theory
- Tool theory: On this view, money is not an incentive in itself; it is an incentive only
because and only insofar as it can be exchanged for goods and services (instrumental)
- Drug theory: Theory of money motivation asserts that money, too, intrudes on the
normal functioning of the nervous system. On this account, money acquires its
incentive power because it mimics the neural, behavioural, or psychological action of
some other, more natural incentive (cognitive)
Why should we use the Drug Theory? The core reason is that a drug is a functionless
motivator, and that is what we want to assert that money sometimes is.
Linking older theories to these theories:
