The game theory of buying clothes, and why money tips are often short-lived
I discovered a money tip before I moved to college. I was living in Illinois and it was a chilly September. But I actually needed more summer clothes because I was moving to warmer California weather at Stanford. Since I was shopping out of season, most what I wanted was ...

The 3 biggest obstacles to getting rich
Why am I not happy with my finances? I hear this question from many people. Some people blame not enough education, and schools are responding by increasing financial education classes. But will more information help? I used to think so, but here is a story that really got me thinking. My friend ...

Using mechanism design to improve your finances…it’s as easy as splitting a Coke
I have to thank my fifth grade math teacher for unintentionally introducing me to game theory. The game theory is hidden in the following extra-credit problem that he asked us: My mother would often give a can of Coke to me and my two brothers and tell us to split it. ...

Understanding the rule of 72: a popular rule that has little practical value
The Doubling Question: If your money grows at a certain rate, how long will it take to double? You can surprisingly answer this question without doing much math. All you need to know is the Rule of 72, which states: For instance, if an investment returns 6% annually, it will take 12 ...

How can you stop free riders and games of chicken? Try changing the game
Here is some advice you can take to the office: if you aren't winning the game you are playing, consider changing the game. If you find yourself yelling at people, please stop and think about why people are acting that way. Just asking people to change is hard. Rational people respond ...

4 reasons to drink water from the tap
Not all chemicals are bad. Without chemicals such as hydrogen and oxygen, for example, there would be no way to make water, a vital ingredient in beer"“Dave Barry I hate when people complain about high gas prices while they joyously drink bottled water. Here's a quick fact: bottled water can be more ...

3 tips for threatening many people at once
The RIAA won a legal battle on Friday when a Minnesota woman was found guilty of copyright infringement for file sharing and fined for damages of $220,000. Although the award was significantly smaller than the requested $3.9 million plus legal fees, the RIAA considers the case a victory. Is it ...

Why saving is smart: understanding the law of diminishing marginal utility
Chicago-style pizza is one of my guilty pleasures. I know it's not healthy food, but every once in a while, I cannot resist indulging. I am further tempted because a place near me offers an all-you-can-eat lunch buffet. Going there is one of my favorite dining experiences. Though a recent meal ...

Why cooperation fails, and how to fix the problem using game theory
Some people criticize game theory (and to some extent economics as a discipline), calling it unrealistic and focusing on selfish behavior. Just check out this comment from a review of James Miller's Game Theory at Work: You and I both know that in reality, things simply don't work that way between ...

When comparison shopping, trust the math, not your eyes
Recently, my grocery store began stocking a new, "family-size" package for a cereal that I enjoy. It caught my attention because the family-size box is a lot larger than the regular one. In fact, the family-size box looked almost double the size: In a rush, I chose the family-size box and ...