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Why do we value short-term gains more than long-term advantages?

Dr. Mehmet Oz, MD
Cardiology (Cardiovascular Disease)

We like to think of ourselves as rational decision makers - dispassionate information processors, coolly and calmly, logically evaluating the costs and benefits of each alternative we encounter. But we're much more primitive than most assume. We may look like a Wall Street type on the outside, but there's still a good deal of Fred Flintstone on the inside. We're hard-wired through the amygdala to react to emotions, not intellect, which is why we can have financial troubles. Just consider this example:
Recently a team of Ivy League economists looked at how consumers reacted to various pitches by banks to take out a loan. A purely rational view would have predicted that interest rates would be the only factor that had an impact - the lower the rate, the more people will borrow money from that bank. But the scientists varied more than just the interest rate; they also tested how persuasive other approaches might be. For instance, some letters offered a chance to win a cell phone in a lottery if the customer came in to inquire about a loan. The researchers found that many non-financial factors had an effect equal to one to five percentage points of interest. An offer of a free cell phone increased demand among men by as much as dropping the interest rate five points. For a $50,000 loan, this meant some men were in essence willing to pay $16,000 more in interest to receive a $100 cell phone. So much for logical decision-making.

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Important: This content reflects information from various individuals and organizations and may offer alternative or opposing points of view. It should not be used for medical advice, diagnosis or treatment. As always, you should consult with your healthcare provider about your specific health needs.