Summary of Claudia Hammond on the Psychology of Money

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Claudia Hammond on the Psychology of Money summary
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Money makes people act in peculiar ways. Psychology lecturer Claudia Hammond examines these irrational behaviors by reeling off known cognitive biases, false assumptions and other mental traps that can cause financial downfalls. Though she aims for breadth rather than depth, Hammond’s lecture offers a clear, organized recap of existing research. getAbstract recommends her quick, useful primer to those who want to achieve “mind over money.”

About the Speaker

Claudia Hammond is a psychology lecturer, writer and BBC Radio 4 broadcaster.



In a sense, money is just paper, but people regard it as much more. In 1994, a group of artists set aflame £1 million [$1.4 million] in an art exhibition. The backlash was severe. Since then, studies have shown that seeing money destroyed disturbs people, triggering a part of the brain linked to the “use of tools,” such as penknives. To a degree, money is a tool and signifies “opportunity and choice.” Though money represents a “future reward” – you must exchange it to get what you want – the brain processes it as an immediate reward.

People assume that they can identify good value. Yet when bidders in an auction...

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