I have this book “Phishing for Fools” on my reading list and stumbled across this recent lecture by co-author Robert Shiller. It is lengthy (about an hour long) but as one of the leading behavioral finance experts and a Nobel Prize winner, I think you will find portions of it very useful.
Here are the key segments (and where they start in the video) that will provide students with some examples of how they are being manipulated by products and companies:
- Candy bars at the checkout counter (20:00 start)
- Addiction to slot machines (23:40) explained due to brain bugs (25:00) which encourage repetitive behavior; in programming language we get “stuck in a Do loop”
- Why is Coca-Cola so popular (28:10)? Blame marketing; they figured out about the importance of attaching good memories to their product. Inside Out movie: Attachment of emotions to core memories
- Cigarette smoking (35:00) – profit to make money from phishing and sowing confusion about real effects of smoking
- Lists his heroes who fought against phishing (37:00): consumer reviews, safety of electrical products, drug testing,
- How can reviews of products (54:00) lead to phishing.
- Issues with medical field (56:00) and potential for conflicts of interest (surgery example)
- Drug prices controversy (59:00)
Here is a summary of the book and what he covers in the lecture:
Phishing for Phools therefore strikes a radically new direction in economics, based on the intuitive idea that markets both give and take away. Akerlof and Shiller bring this idea to life through dozens of stories that show how phishing affects everyone, in almost every walk of life. We spend our money up to the limit, and then worry about how to pay the next month’s bills. The financial system soars, then crashes. We are attracted, more than we know, by advertising. Our political system is distorted by money. We pay too much for gym memberships, cars, houses, and credit cards. Drug companies ingeniously market pharmaceuticals that do us little good, and sometimes are downright dangerous.
Here is a list of books that he mentions in his lecture:
- Nudge (Richard Thaler)
- Hidden Persuaders (Vance Packard)
- Addiction by Design (Schull)
- Salt, Sugar and Fat (Michael Moss)