by Ignacio Mas & Kim Wilson, CEME Senior Fellows
Money is a complex human convention with deep cultural derivations and an elaborate social etiquette. It is part of the fabric of bonds within family and community. It is also mired in psychological biases and mental heuristics through which we personally come to terms with the barrage of decisions we need to make on a frequent basis.
Given this contextual cocktail, it is not surprising that behaviors around money often appear irrational on first analysis. However, there is always some hidden logic that explains, without necessarily justifying, most observed behaviors. (Critical distinction here: you can explain why a thief took something, but that doesn´t necessarily justify it.) These behavioral idiosyncrasies operate in the background and we easily identify them in others, but we rarely confront them in our own lives.
In our courses on digital money and financial inclusion, we find that getting students to think about their own idiosyncrasies around money is the best antidote against developing excessively judgmental attitudes in interpreting how others, and especially poor people, manage their money. In the Fletcher School´s Leadership Program for Financial Inclusion aimed at financial regulators and the DFI-Fletcher Certificate in Digital Money aimed at emerging market fintech professionals, we ask our students to tell us an interesting story from their own lives or those close to them that has to do with money, which made them look at money in a special or different light. We thought we’d show you the kind of stories that come up.