Monopoly Money
How did we enter financial freefall? Here's one contribution. People cheat more when they aren't dealing with real money. Abstractions—whether it's a poker chip or a stock option—make people more comfortable with fudging the rules. Start trading fancy derivatives and your morals just might come unmoored.
Financial Mirages
When people feel at the mercy of a volatile market, they're more likely to see false trends in financial data. Lacking control causes the mind to spot patterns in order to regain a sense of agency. When the patterns are illusions, bad trades can result.
Of Bulls, Bears, Elephants, and Donkeys
How the stock market performs alters collective temperament and thus how we vote for president. When the mood is bad, voters opt to boot the incumbent party. One analysis found that financial markets predict election results better than the other way around.
Mea Culpa
Corporations that take responsibility in their annual reports for negative events like profit declines have higher stock prices one year later than firms that blame outside circumstances. Fessing up signals that a company is in control of its destiny.
