Nudge

Today on Nudge, the $2.9m NFT that sold for 0.0097% of its original price, why so many footballers go bankrupt, and how you can beat the stock market.

I’m joined again by Alex Edmans, professor of finance at London Business School and award-winning author.

He explains that the rich and famous aren’t as smart as you think they are.

---

Read my past newsletters: https://nudge.kit.com/profile

Alex’s website: https://alexedmans.com/

Alex’s book: https://alexedmans.com/madness/

Alex’s LinkedIn: https://www.linkedin.com/in/aedmans

Unlock the Nudge Vaults: https://www.nudgepodcast.com/vaults

Subscribe to my newsletter: https://www.nudgepodcast.com/mailing-list

Connect on LinkedIn: https://www.linkedin.com/in/phill-agnew/

---

Today’s sources:

Chatterjee, Arijit and Donald C. Hambrick, ‘It’s all about me: narcissistic chief executive officers and their effects on company strategy and performance’, Administrative Science Quarterly 52 (2007), 351–86.

Ham, Charles, Mark Lang, and Nicholas Seybert, ‘CFO narcissism and financial reporting quality’, Journal of Accounting Research 55 (2017), 1089–135.

Li, Yuanzhi and David Yermack, ‘Evasive shareholder meetings’, Journal of Corporate Finance 38 (2016), 318–34.

Yermack, David, ‘Flights of fancy: corporate jets, CEO perquisites, and inferior shareholder returns’, Journal of Financial Economics 80 (2006), 211–42.

It’s never been easier to scam someone online.

Now, AI-generated “pity scams” use fake injured veterans to sell cheap mass-produced products.

They leverage three powerful psychological biases to persuade the masses.

On today’s Nudge, I explain how and why it’s so hard to stop the scammers.

---

BBC’s fake veteran reporting: https://www.bbc.co.uk/news/articles/cvgy0lz08keo

BBC’s Jean Philanthrope reporting: https://www.bbc.co.uk/news/videos/c60qkdjvx70ko

Unlock the Nudge Vaults: https://www.nudgepodcast.com/vaults

Subscribe to my newsletter: https://www.nudgepodcast.com/mailing-list

Connect on LinkedIn: https://www.linkedin.com/in/phill-agnew/

---

Today’s sources:

Bickman, L. (1974). The social power of a uniform. Journal of Applied Social Psychology, 4(1), 47–61.

Buell, R. W., Kim, T., & Tsay, C.-J. (2016). Creating reciprocal value through operational transparency. Management Science, 62(6), 1–23.

Office for Veterans' Affairs. (2023). Perceptions of UK armed forces ex-service personnel. GOV.UK. https://www.gov.uk/government/publications/perceptions-of-uk-armed-forces-ex-service-personnel

Xygalatas, D., Mitkidis, P., Fischer, R., Reddish, P., Skewes, J., Geertz, A. W., Roepstorff, A., & Bulbulia, J. (2013). Extreme rituals promote prosociality. Psychological Science, 24(8), 1602–1605.

When Greece beat France in Euro 2004, the stock market shifted. When Allbirds rebranded as an AI company, its stock rose 600%. When British radio plays happy music, the FTSE improves.

So, is the stock market just vibes? Does national mood actually move the market?

That’s what today’s guest on Nudge, Alex Edmans, is here to answer.

Alex is a professor of finance at London Business School and an award-winning author.

On today's show he explains why smart investors make crazy decisions (and how to exploit them).

---

Read my past newsletters: https://nudge.kit.com/profile

Alex’s website: https://alexedmans.com/

Alex’s book: https://alexedmans.com/madness/

Alex’s LinkedIn: https://www.linkedin.com/in/aedmans

Unlock the Nudge Vaults: https://www.nudgepodcast.com/vaults

Subscribe to my newsletter: https://www.nudgepodcast.com/mailing-list

Connect on LinkedIn: https://www.linkedin.com/in/phill-agnew/

---

Today’s sources:

De Bondt, Werner F. M. and Richard Thaler, ‘Does the stock market overreact?’, Journal of Finance 40 (1985), 793–805.

Edmans, Alex, ‘Does the stock market fully value intangibles? Employee satisfaction and equity prices’, Journal of Financial Economics 101 (2011), 621–40.

Edmans, Alex, ‘The link between job satisfaction and firm value, with implications for corporate social responsibility’, Academy of Management Perspectives 26 (2012), 1–19.

Edmans, Alex, Adrian Fernandez-Perez, Alexandre Garel, and Ivan Indriawan, ‘Music sentiment and stock returns around the world’, Journal of Financial Economics 145 (2022), 234–54.

Edmans, Alex, Diego García, and Øyvind Norli, ‘Sports sentiment and stock returns’, Journal of Finance 62 (2007), 1967–98.

Kahneman, Daniel and Amos Tversky, ‘Judgment under uncertainty: heuristics and biases’, Science 185 (1974), 1124–31.

I think Sam Altman of OpenAI has deliberately tried to build his fame.

While other CEOs keep a low profile, he spends 95% of his time evangelising.

In this episode of Nudge, I explain why.

---

Unlock the Nudge Vaults: https://www.nudgepodcast.com/vaults

Subscribe to my newsletter: https://www.nudgepodcast.com/mailing-list

Connect on LinkedIn: https://www.linkedin.com/in/phill-agnew/

---

Today’s sources:

Smith, R. K., & Newman, G. E. (2014). When multiple creators are worse than one: The bias toward single authors in the evaluation of art. Psychology of Aesthetics, Creativity, and the Arts, 8(3).

Wiebe Wakker spent three years driving from the Netherlands to Australia.

Today on Nudge, we learn why.

And we study the psychology of dedication.

Listen to the bonus episode: https://nudge.kit.com/7ec0a99ab3

Warning, today’s episode contains explicit language.

---

Listen to the bonus episode: https://nudge.kit.com/7ec0a99ab3

Wiebe’s website: https://wiebewakker.com/en/

Unlock the Nudge Vaults: https://www.nudgepodcast.com/vaults

Subscribe to my newsletter: https://www.nudgepodcast.com/mailing-list

Connect on LinkedIn: https://www.linkedin.com/in/phill-agnew/

---

Today’s sources:

Kruger, J., Wirtz, D., Van Boven, L., & Altermatt, T. W. (2004). The effort heuristic. Journal of Experimental Social Psychology, 40(1), 91–98.

Söderlund, M.Söderlund, M., & Sagfossen, S. (2017). The consumer experience: The impact of supplier effort and consumer effort on customer satisfaction. Journal of Retailing and Consumer Services, 39, 219–229.