Merle van den Akker is a behavioral science PhD candidate at Warwick Business School. She runs the Money on the Mind blog and co-hosts the Questioning Behavior podcast. She can also be found on Twitter.
In this interview we discussed her research on contactless payments and other technology-based means of removing friction and a sense of loss from the paying process. This is a fundamental issue for those practicing personal financial self care, who wish to maximize the proportion of their income that is invested rather than lost during unnoticeable spending events.
The interview also covered research on poverty and the feeing of time as someone struggling to survive. We discovered that hyperbolic discounting rates modulate depending on one’s level of financial distress. A key study she cited is On the Psychology of Poverty. This lead us to a discussion of structures in society that stop people lifting themselves out of poverty, a key challenge to our assumption that the compounding sheet discussed throughout this series shall be sufficient to take care of people’s financial prosperity.
Similar to our S1E9 interview with Leigh Caldwell, she pointed out that business ventures are a major differentiating factor in finding financial success. It appears then that not only good financial compounding behavior but also starting a business shall need to be a focus of this podcast going forward, to answer the question why almost no one is seriously on a path to accumulating a billion dollars within 3 generations.
Finally, as a PhD candidate, Merle was an excellent source of information on conferences:
This one happened June 10-11, and is from a working group.
Their own site.
https://waset.org/behavioral-finance-and-markets-conference-in-october-2021-in-paris
This one has already been, but it’s good to stay up to date with NBER.
This index might be useful.
Might be useful: https://www.aobf.org/
Boulder has just been, but make sure to check out the one for next year.
This one has also just been, but check for next year.
SPUDM will happen soon at Warwick.
Events from UK finance.
CEPR does a lot on household finance.
WHAT WE DO
We solve the mathematical problem of causing an enormous increase in one's bank account balance through human effort. The podcast therefore has two themes, mathematics and human behaviour. Together, behavioural investing. We take a first principles approach by summarising scientific studies and interviewing psychology and mathematics researchers. This will show us the first principles. We will then reason from these first principles to the best strategy to cause optimal human investing behaviour.
S3E2 ✔️ Merle van den Akker: Compounding Investments, Alone, Won’t Fix Poverty.