Why Things Cost $19.95

Part of the answer: people end up paying more when the asking price is more specific, and non-”rounded off” price  – i.e., use $5240 rather than $5000

http://www.psychologicalscience.org/onlyhuman/2008/01/why-things-cost-1995.cfm

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Pricier Wine Tastes Better

A recent study shows that raising the price of wine makes it taste
better. When tasting wines they’d been told cost more,
testers’ brains showed more pleasure than when drinking cheaper
wines…even when the wines were exactly the same! The
study’s lead author is California Institute of Technology
economics professor Antonio Rangel.

mp3

http://www.wnyc.org/shows/lopate/episodes/2008/01/23/segments/92291

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Desire and Scarcity

A Sense of Scarcity
 
Wanting something makes it seem rarer than it really is.  Another case of emotions affecting judgement.

From Herbert Wray’s excellent “We’re Only Human” blog on the Association for Psychological Science website.

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Champagne test

 Is It Champagne or a Substitute? Refined Palates Can Be Fooled

From NYTimes.  Critic’s sophisticate friends can’t tell Champagne from $10 sparkling wines.

Best value for money: Boyer Brut.

Left wing brain, right wing brain

Study finds left-wing brain, right-wing brain

“Exploring the neurobiology of politics, scientists have found that
liberals tolerate ambiguity and conflict better than conservatives
because of how their brains work.”

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On Political Judgment

Getting Iraq Wrong by Michael Ignatieff in the NY Times

“Michael Ignatieff, a former professor at Harvard and contributing writer for the magazine, is a member of Canada’s Parliament and deputy leader of the Liberal Party.”

• “The unfolding catastrophe in Iraq
  … has condemned the judgment of many others, myself included, who as
  commentators supported the invasion…I keep revisiting the Iraq debacle, trying to understand exactly how
  the judgments I now have to make in the political arena need to improve
  on the ones I used to offer from the sidelines.”
• “The attribute that underpins good judgment in politicians is a sense of
  reality…Politicians
  cannot afford to cocoon themselves in the inner world of their own
  imaginings. They must not confuse the world as it is with the world as
  they wish it to be.”
• “The only way any of us can improve our grasp of reality is to confront
  the world every day and learn, mostly from our mistakes, what works and
  what doesn’t. Yet even lengthy experience can fail us in life and in
  politics. Experience can imprison decision-makers in worn-out solutions
  while blinding them to the untried remedy that does the trick.”
• “In practical politics, there is no science of decision-making. “
• “A sense of reality is not just a sense of the world as it is, but as it
  might be. Like great artists, great politicians see possibilities
  others cannot and then seek to turn them into realities. To bring the
  new into being, a politician needs a sense of timing, of when to leap
  and when to remain still. Bismarck famously remarked that political
  judgment was the ability to hear, before anyone else, the distant
  hoofbeats of the horse of history.”
• “Fixed principle matters. There are some goods that cannot be traded,
  some lines that cannot be crossed, some people who must never be
  betrayed. But fixed ideas of a dogmatic kind are usually the enemy of
  good judgment. It is an obstacle to clear thinking to believe that
  America’s foreign policy serves God’s plan to expand human freedom.
  Ideological thinking of this sort bends what Kant called “the crooked
  timber of humanity” to fit an abstract illusion.”
• “The people who truly showed good judgment on Iraq predicted the
  consequences that actually ensued but also rightly evaluated the
  motives that led to the action. They did not necessarily possess more
  knowledge than the rest of us. They labored, as everyone did, with the
  same faulty intelligence and lack of knowledge of Iraq’s fissured
  sectarian history. What they didn’t do was take wishes for reality.”
• “emotions in politics, as in life, tend to be self-justifying and in
  matters of ultimate political judgment, nothing, not even your own
  feelings, should be held immune from the burden of justification
  through cross-examination and argument.”

These observations seem to be just as true as business as they are of politics.

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