3 Simple Questions Show Why Most People Are Irrational Debt-Gobbling Fools

behavioural economist Steve Keen has a set of questions that explains America’s debt problem (via @credittrader).

What would you pick? Answers below the fold…













Most people pick A, A and B. They should pick B, B and B, for average gains of +$70,000, +$2,500 and +$2,500.

People behave irrationally on the first two questions because they hate the idea of debt.

But when they’re already in debt — the third question — they show an increased willingness to take risks. It’s as if negative money isn’t even real.

Now read Jeff Gundlach’s complete guide to the inevitable American debt default >

NOW WATCH: Briefing videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.