Link Banana

Two recent mentions of the psychological trick caught my eye. First: in his review of Nudge, John Cassidy — while pointing out that Senator Obama’s policies share logic with those of the book — offer this interesting test:

If you think you are too smart for this description to apply to you, try this simple mental exercise. Take the last three digits of your cell phone number, obtaining a number between zero and 999, and add two hundred to it. Write down the resulting figure and put the letters AD after it. Now, consider this question: When did Attila the Hun invade Europe?

Unless you are an expert on the Dark Ages, or your brain is unusually wired, the chances are that your answer will be pretty close to the date you write down. Say the last three digits of your cell number are 787 and the number you write down is 987 AD. Then, most likely, 900 AD will sound like a reasonable answer to you, and so will 1050 AD, but [440, the correct answer] will sound wrong. That was certainly how it worked when I tried the exercise.

Also, Matt Yglesias suspects a local developer is employing the technique to show why he should move.

Elizabeth Kolbert offers a solid review of two recent books in the fascinating field of behavioral economics. I thought this anectdote, among others, was interesting:

This effect is called “anchoring,” and, as Ariely points out, it punches a pretty big hole in microeconomics. When you walk into Starbucks, the prices on the board are supposed to have been determined by the supply of, say, Double Chocolaty Frappuccinos, on the one hand, and the demand for them, on the other. But what if the numbers on the board are influencing your sense of what a Double Chocolaty Frappuccino is worth? In that case, price is not being determined by the interplay of supply and demand; price is, in a sense, determining itself.