Behavioral Economics2020-05-24T06:40:43-05:00

Behavioral Economics

10 Examples of Action Bias

In my last blog post I addressed what action bias is, and why we, as humans, tend toward this bias.  Hopefully looking through a few more examples will help you identify where you tend toward action bias, and then help you set up ways to minimize its effects on you.  The following 10 examples are situations where taking action does not warrant praise and has proven more often than not to provide a detrimental outcome.  The first 8 are personal finance, investment and business related, the next two are sports and physicians related, and the last one is the example [...]

By |November 22nd, 2021|Behavioral Economics|0 Comments

Action Bias – Making Trouble Where There Is None

  Have you ever been stuck in traffic and found yourself honking the horn, waving your fist, or even releasing the bird?  Did any of your actions improve the situation? Maybe you are similar to my parents who live where there is no traffic, but where there is gossip.  Have you ever listened to someone talk about someone else and then validated their thoughts?  Then in hindsight realized you should have done nothing of the sort. Ok, so you don’t drive in traffic or listen to gossip (congratulations!).  This example is for you.  You have found yourself listening to someone [...]

By |November 1st, 2021|Behavioral Economics|0 Comments

6 Steps to Conquer Choice Overload Bias – Part 3

In my last post, I connected an increase in anxiety with the additional choices and freedom brought on by financial independence.  Thanks to Barry and Danielle’s insights I was able to take a step back and see what was happening inside my head, Choice Overload. I have a natural tendency to maximize every decision, and when I face multiple decisions at once it leads to decision deferral, and decision fatigue.  While in my mind I was trying to do great things, in reality I was like the baby above, doing nothing but sticking my foot in my mouth. Once I [...]

By |September 20th, 2021|Behavioral Economics|0 Comments

Choice Overload Bias, Financial Freedom’s Hidden Hurdle – Part 2

Sarah and my financial independence dream was coming to fruition and it was inevitable we were going to reach our magic number. So why, at the same time, did I feel overwhelmed and full of anxiety? Everything I heard or read up until this point led us to believe financial freedom would be just that, freeing. But so far it was more stressful than freeing. I felt the weight of opportunity upon our shoulders. Since the beginning of time, we as first world humans have never had more opportunities or options. The endless amount of options create more choices, decisions [...]

By |August 16th, 2021|Behavioral Economics|0 Comments

Anxiety, the Last Hurdle Before Financial Freedom – Part 1

Severance Update In my last post, “No Power, No Water, No Heat, No Severance'' we were in the middle of a cold front that left us without electricity, water, and internet. This delayed all of my corporate work communications and the following week when the essential services came back online I received word on my severance request and... It was accepted. I am now twice retired, and can focus on HIT, family and friends. Financial Independence It has now been 3 months since retiring and financial independence has been everything I dreamed it to be. But before I share more [...]

No Power, No Water, No Heat, No Severance – My Snapshot of Houston’s Freeze

It is 8:30 am on Wednesday, day 3 of a 6-day cold spell across Texas.  We lost power around 2 am Monday and have been relying on our fireplace, camping gear, and friends for warmth.  I once laughed at the fact, 90% of homes in Houston had fireplaces.  Thank goodness we bought one of those homes, as the fireplace is keeping our living room a toasty 48 deg F! The Damage In addition to losing power, our water has stopped flowing, and the technique of dripping faucets is no longer available to prevent frozen pipes.  As a result, we shut [...]

By |February 18th, 2021|Behavioral Economics|4 Comments