Michael Shermer discusses his book The Mind of the Market as part of the Authors @ Google series.

How did we evolve from ancient hunter-gatherers to modern consumer-traders? Why are people so irrational when it comes to money and business? Dr. Michael Shermer argues that evolution provides an answer to both of these questions through the new science of evolutionary economics. Drawing on research from neuroeconomics, Shermer explores what brain scans reveal about bargaining, snap purchases, and how trust is established in business. Utilizing experiments in behavioral economics, Shermer shows why people hang on to losing stocks and failing companies, (continue reading…)

During his book tour Michael Shermer visited the offices of Reason magazine, who have recently added Reason.TV to their media package, a project helped launched by Drew Carey, who turns out to be a big fan of Skeptic magazine and all things skeptical. In this interview Reason magazine editor Nick Gillespie interviews Shermer on his new book, The Mind of the Market.

The new science of neuroeconomics offers
new insights into old political problems

The 19th-century French economist Frederic Bastiat expressed a principle applicable in the 21st century: “Where goods do not cross frontiers, armies will.”

In my new book, The Mind of the Market, I describe in detail how in the modern world of nation states, economic sanctions are among the first steps taken by one nation against another when political diplomacy fails, as when the United States enforced them on Japan after its invasion of China in the 1930s, and these became a prelude (among other factors) to Japan’s retaliatory bombing of Pearl Harbor in 1941 and our involvement in the greatest war in history. More recently, economic sanctions were imposed by the U.S. and Japan on India following its 1998 nuclear tests, and more recently by the U.S. on Cuba, Iran, and North Korea. (continue reading…)

Michael Shermer read from and talked about his new book, The Mind of the Market, at various venues during his book tour in January 2008. Shermer discussed how economic and evolutionary theory speak the same language, and how our hardwired human biology affects modern economics. READ MORE about the book

National Capital Area Skeptics, Arlington, VA (January 12th, 2008)

LISTEN to part 1 (audio podcast)
LISTEN to part 2 (audio podcast)

Would you rather earn $50,000 a year while other people make $25,000, or would you rather earn $100,000 a year while other people get $250,000? Assume for the moment that prices of goods and services will stay the same.

Surprisingly — stunningly, in fact — research shows that the majority of people select the first option; they would rather make twice as much as others even if that meant earning half as much as they could otherwise have. How irrational is that?

This result is one among thousands of experiments in behavioral economics, neuroeconomics and evolutionary economics conclusively demonstrating that we are every bit as irrational when it comes to money as we are in most other aspects of our lives. In this case, relative social ranking trumps absolute financial status. Here’s a related thought experiment. Would you rather be A or B? (continue reading…)