Thursday, April 23, 2009

Money Changes People

I was talking to Dan about how money changes people. Say you get a windfall of several million dollars. Your behavior will definitely change. But is it because you have changed as a person? I contend that the answer is no.

Basically, I say that your budget constraint has changed but your underlying preferences (utility function, if you will) hasn't changed. The things you start doing are things that you would have done before if you could have.

I realize that tons of $$$ can change the way people treat you and likewise the way you treat them back. However, I don't think that the thing changing is your core being. It's just that now you can do bigger things than you ever used to.
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