As promised yesterday, here is the announcement for the giveaway of another fascinating new book. But before we get there, here is a quick brain teaser (excerpted from the book, reprinted with permission). Answer these questions based on what you already know (i.e, this is not a general knowledge quiz, so don't bother to go googling).
1. Driving due south from Detroit, what is the first country you will come to when you leave the U.S.?
Now think for a moment about how certain you are that your answer is right. Are you 100% sure? 95% sure? 90%? Or less?
2. Which country derives more than 75% of its energy from nuclear power?
a. United States
d. None of the above
Again, take a moment to think about how certain you are that your answer is right. Are you 100% sure? 95% sure? 90%? Or less?
3. Approximately how many microbes live in the typical person’s gastrointestinal tract?
a. 100 trillion
b. 100 billion
c. 100 million
Once more, think about how certain you are that your answer is right. Are you 100% sure? 95% sure? 90%? Or less?
Did you answer Mexico for the first one? And how sure were you? 90%? 100%? Well, like most people who responded similarly in the original survey, you would be wrong. The correct answer would be Canada (the city of Windsor, Ontario). Don’t believe me? Check it out for yourself!
If you are like most people who participated in the original study, your answer for the second question was probably “None of the above” with around 70% accuracy. Again, you would be wrong, since France relies heavily on nuclear power to meet its energy needs.
Finally, for the third question among the people surveyed people most of them answered 100 million with 50% confidence in their answer. The correct answer is 100 trillion (best reference I could get).
The point of this exercise was not to ask you some trick questions and prove you are wrong, but to point out that it is human nature to feel confident about what we *think* we know. The very fact that I called it a "brain teaser" must have tipped you off that these are trick questions - yet, what was the percentage of confidence you had in your answers? This human psychology of thinking "I Know" plays a huge role in our financial decision. Unlike this trivial exercise, in real life the ignorance of our ignorance can result in severe financial misjudgment – be it investing decisions, retirement planning, estate planning etc. The book "Your Money and Your Brain: How the new science of Neuroeconomics can help make you rich", the subject of this month’s giveaway, does a great job of illustrating the concepts of psychology and brain activity in relationship to the way we handle money. It is an easy-read book (contrary to the image conjured up by the title!) chock full of such exercises, examples, surveys and study results which help realize some of our behavioral quirks and the silly mistakes we make which can cost us a lot of money in the long run. So, go ahead, leave a comment below and enter into the contest to win on of the three copies of the book being given away. And just for kicks (for our own informal survey) in the comment please jot down your answers to the above questions. And please be honest.
I'll go first. Here were my answers when I first read the questions -
1. c. Mexico (100% confidence - "what kind of a question is that – everyone knows that the answer is Mexico!")
2. d. None of the above (~80% confidence- "well if some country generated so much nuclear power, I would have surely heard about it?" )
3. b. 100 billion (25% - basically a 4-sided coin toss)
So stereotypical, I know!!! Yuck.
This should be fun :) The comment form will stay open from now through the end of October and I have three copies of the book to give away. Feel free to mention the giveaway to your friends as well and have them enter too so if you don’t win but they do, you can at least borrow the book from them :) And any help in spreading the word about the giveaway is much appreciated - it won’t affect the odds of winning, but hey, you never know when that good karma will come in for rescue :)
And like the earlier giveaway, a couple of quick reminders. I use blogger which does not require you to enter an email address when you leave a comment. So please either leave a link to your blog or your email address in the comment so I will have a way to inform you if you are a winner. Note that some of the blogger profiles are not public – so if you are linking to your blogger profile, make sure it is shared and I can view it and there is some contact information there. Note: You do not need to have a blog to participate. If you don’t have a blog and are not comfortable leaving your email address in the comments, please email me at ispfmail at gmail dot com and please copy the entire comment into the mail (but please make this the last option). In the previous giveaway I had several participants who signed off as "anonymous" and one of them actually won and it was lucky he left an email address in the comment – otherwise it would be a nightmare trying to contact him! Also, the books will be shipped only to US addresses. If you win and are outside the US, you will have to arrange for someone here in the US to collect the book on your behalf and ship it to you (sorry).
Good Luck, y'all.