1.02BM Your Brain and Money

Instructions

Student Activity Packet
Dollar Auction Game
Learning Objectives
Students will be able to:
Explain what a cognitive bias is and how it can cause someone to make irrational decisions, particularly around money
Explore and experience a variety of cognitive biases
National Standards for Personal Financial Education
Investing
9a: Identify several behavioral biases that can result in poor investment decisions (e.g. loss aversion, mental accounting)
9b: Brainstorm methods for avoiding negative consequences from behavioral biases

QUESTION OF THE DAY: What percentage of people make purchases due to FOMO? 
5 min
Answer the question on the first slide in the space below. Then, compare your answer to the answer on the second slide. Finally, follow your teacher’s directions on how to answer the follow-up questions on the last slide.

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What percentage of people make purchases due to FOMO?_______ 

VIDEO: FOMO: Our Relationship with Social Media 5 min
The previous Question of the Day showed the power of FOMO, or the fear of missing out, and how it can influence our decisions around money. Watch this video to learn more about how FOMO can show up when we use social media, and what we can do to curb its impact on our choices. Then, answer the questions.

3

Describe a time FOMO has influenced a financial decision of yours. _______ Were you happy with the decision? _______ Explain._______ 

2

Sam regularly uses social media and posts to his accounts multiple times a day. He realized he experiences a lot of FOMO while scrolling through his feeds and wants to try quitting social media overnight. What advice would you give to Sam? _______ Explain._______ 

REFERENCE: What is Cognitive Bias?
LIST: List of Cognitive Biases 
6 min
So far, we’ve learned a lot about FOMO, which is a cognitive bias. So what exactly IS a cognitive bias? Review these slides to find out and skim through the list of biases to see just how many there are. Finally, answer the questions.
Link to Pic Below: 

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Use the definition on the slide to explain what makes FOMO a cognitive bias.

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VIDEO: 5 Ways People Are Dumb with Money 
11 min
Now that you’ve learned about - and experienced - a few cognitive biases, let’s explore how these biases can impact our decisions specifically around money. Watch this video and then answer the questions.

2

How do behavioral economists view people differently than traditional economists?

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How might businesses use cognitive biases to their advantage?

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Behavioral economics…

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Cognitive bias is…

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1.02BM Your Brain and Money

Student Activity Packet

Dollar Auction Game

Learning Objectives

Student Activity Packet

Dollar Auction Game

Learning Objectives

QUESTION OF THE DAY: What percentage of people make purchases due to FOMO?

5 min

REFERENCE: What is Cognitive Bias?

LIST: List of Cognitive Biases

6 min

So far, we’ve learned a lot about FOMO, which is a cognitive bias. So what exactly IS a cognitive bias? Review these slides to find out and skim through the list of biases to see just how many there are. Finally, answer the questions.

Link to Pic Below:

Use the definition on the slide to explain what makes FOMO a cognitive bias.

How do behavioral economists view people differently than traditional economists?

How might businesses use cognitive biases to their advantage?

Behavioral economics…

Cognitive bias is…

You go to a restaurant and order a big meal. Even though you’re full, you keep eating because it was expensive. This is an example of...

Student Activity Packet

Dollar Auction Game

Learning Objectives

Student Activity Packet

Dollar Auction Game

Learning Objectives

QUESTION OF THE DAY: What percentage of people make purchases due to FOMO?

5 min

REFERENCE: What is Cognitive Bias?

LIST: List of Cognitive Biases

6 min

So far, we’ve learned a lot about FOMO, which is a cognitive bias. So what exactly IS a cognitive bias? Review these slides to find out and skim through the list of biases to see just how many there are. Finally, answer the questions.

Link to Pic Below:

Use the definition on the slide to explain what makes FOMO a cognitive bias.

If cognitive biases can cause us to make irrational decisions, why do they exist?

What do you think about cognitive bias and spending money?

How do behavioral economists view people differently than traditional economists?

How might businesses use cognitive biases to their advantage?

How do you think being aware of the various biases we have can empower us to make better decisions around money?

Behavioral economics…

Cognitive bias is…

You go to a restaurant and order a big meal. Even though you’re full, you keep eating because it was expensive. This is an example of...

What do you think about cognitive bias and spending money?