REALITYWIPE

RESEARCHERS

The Science of Money Fear: Why Not Looking Feels Safer — and What the Data Shows

3 the researchers behind it — The inner script says: 'Don't open the banking app. Don't look at the statement. If I don't see the number, it can't hurt me.' Twenty years of researc

Carnegie Mellon University

George Loewenstein

Known for:Behavioral-economics research on information avoidance, including formalizing and measuring the ostrich effect

Key findings

  1. 2009

    With Karlsson and Seppi, modeled information avoidance hedonically: people monitor information more after good preliminary news and 'put their heads in the sand' after bad — with supporting evidence from Swedish and American investors checking portfolios less in down markets. ↗

  2. 2016

    With Sicherman, Seppi and Utkus, used daily login data from retirement accounts to show attention itself responds to news: logins fell 9.5% after market declines and were lower when volatility (VIX) was high. ↗

Harvard University (at the time of the key publications)

Sendhil Mullainathan

Known for:The scarcity research program: how having too little — money or time — changes attention and decision-making

Key findings

  1. 2012

    With Shah and Shafir, showed in Science that scarcity changes how attention is allocated: it produces deeper engagement with the pressing problem while neglecting other ones — attentional shifts that help explain behaviors like overborrowing. ↗

  2. 2013

    With Mani, Shafir and Zhao, showed that poverty itself taxes cognition: evoking a costly hypothetical financial problem lowered lower-income participants' performance on unrelated reasoning tasks, while an inexpensive version of the same problem did not. ↗

Princeton University

Eldar Shafir

Known for:Behavioral-science research on decision-making under scarcity, co-developing the scarcity-mindset account with Sendhil Mullainathan

Key findings

  1. 2012

    With Shah and Mullainathan, demonstrated experimentally that scarcity-induced focus comes with neglect: participants under resource scarcity engaged intensely with immediate demands while overlooking useful information and future costs, including borrowing at steep effective rates. ↗

  2. 2013

    With Mani, Mullainathan and Zhao, showed in a field study that the same Indian sugarcane farmers performed worse on cognitive tests before harvest (when money was tight) than after — the scarcity of the situation, not stable traits, tracked the impairment. ↗

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