Nudge

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.

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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

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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).

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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

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

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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.

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

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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.

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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/

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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.

Are men who are insecure about their manhood more likely to buy sports cars?

Do memes work for government communication?

Does brand colour change the products we buy?

And will an AI ever replace a police interrogator?

These are some of the questions Jo Evershed, a psychological scientist and CEO, helps me answer on today’s episode of Nudge.

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Start using Riverside for free: https://bit.ly/PhilAgnew

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Learn more about Gorilla: https://gorilla.sc/

Connect with Jo on LinkedIn: https://www.linkedin.com/in/jo-evershed-36bba9/

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

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Today’s sources:

CX Lab. (n.d.). CX Lab case study [Blog post]. Gorilla Experiment Builder. https://gorilla.sc/blog/cx-lab-case-study

Shang, J., Reed, A., & Croson, R. (2008). Identity congruency effects on donations. Journal of Marketing Research, 45(3), 351–361.

Tasnim, A., Kwan, C., Chahboub, M., Liu, A., & Humairah, A. (n.d.). Saving trees one meme at a time: An investigation into how meme-style posts influence behavioural intentions to water street trees [Unpublished manuscript]. University College London.