"If you need to negotiate anything . . . from a pay increase to buying or selling a house-this book covers all the bases. [Bazerman] has taught, tested, and proven his theories with thousands of executives and MBA students."-Donald P. Jacobs, Dean, J. L. Kellogg Graduate School of Management, Northwestern University
"Max Bazerman provides a fascinating, easy-to-understand look at how we make money decisions and offers sound advice that will help you increase your net worth."-Roger E. Stricker, PhD, Vice President, Intellectual Property, Lucent Technologies
"By holding a mirror up to our faces, Max Bazerman allows us to see all those dumb money mistakes each of us had no idea we were making."-Bill Bresnan, Financial Talk Show Host/Author
When it comes to money matters, even the smartest of us make some pretty dumb decisions. This groundbreaking book gives you the necessary tools to think through financial issues practically and avoid costly blunders.
A renowned expert in the field of decision-making and negotiation, Max Bazerman illustrates both how and why we make the decisions we do. He provides the essential understanding you need to identify your own approach to finances, recognize any inherent problems in your reasoning, and determine ways to overcome them. Packed with sound advice and expert recommendations, Smart Money Decisions is essential reading for anyone who has made the same mistake twice.
Before you read the first chapter of Smart Money Decisions, kick yourself. Hard. Then do it again, just for good measure. Because no matter how hard you're able to pummel yourself, it won't match the impact you'll feel when you realize how much you overpaid for your house and your car, how badly you bungled your last job change, how you were suckered into buying an extended warranty because of a fearful scenario that a veteran salesperson planted in your head.
Max H. Bazerman is a professor of negotiation at Northwestern University. Unlike many of today's investment gurus, he's applied statistical models to numerous situations in which the price of a purchase was in flux. And he has concluded, beyond any doubt, that certain tactics will almost certainly save you money, while others put the power in someone else's corner, dooming you to pay a higher price than you might have otherwise. Now, you may already know that there's a mere 10 percent chance you'll use an extended warranty, and thus pass it up; about 60 percent of purchasers are able to resist. But you may not know that you should never let a real estate agent know the highest price you are willing to pay for a property. In fact, you're best off if the agent knows only how low the seller is willing to go. With a knowledge only of the floor and no idea what the ceiling is, guess where the price winds up? Right: hovering just over the carpet. There's more to this book than negotiation, though. One chapter persuades you to keep the value of your time in mind when making a purchase. For example, if you research and shop for 20 hours in order to save $120 on a purchase, you've set the value of your time at $6 an hour. (Would you like fries with that big-screen TV?)
Like the best investment books, Smart Money Decisions should have a permanent place on your shelves. You may need it only a few times a year, but you're virtually guaranteed to have more money at the end of the year. --Lou Schuler--This text refers to an out of print or unavailable edition of this title.
Contemporary guides to financial planning and money management are now apparently obliged to consider the psychological aspects of personal fiscal behavior. The frequent result, however, often consists of New Age mantras or confusing psychobabble. Bazerman, on the other hand, grounds his guide in the behavioral aspects of decision making. He is a professor at Northwestern's Kellogg School of Management and author of Judgment in Managerial Decision-Making (1998) and Negotiating Rationally (1992). He begins here with a fascinating illustration of how otherwise sensible individuals can make foolish decisions. Students in Bazerman's class are offered the opportunity to bid on a $20 bill; but given his unusual ground rules, they end up paying anywhere from $20 to $70 for it. He explains this behavior and goes on to identify the "top ten money mistakes." He shows them at work in decisions to buy a home, a car, insurance, and mutual funds, and in deciding whether to accept a job offer and how to manage one's time. Bazerman's unique perspectives make this an exceptional book. David Rouse--This text refers to an out of print or unavailable edition of this title.
Max H. Bazerman Jesse Isidor Straus Professor of Business Administration www.people.hbs.edu/mbazerman
In addition to being the Straus Professor at the Harvard Business School, Max is formally affiliated with the Kennedy School of Government, the Psychology Department, and the Program on Negotiation.
Max's research focuses on decision making in negotiation, and improving decision making in organizations, nations, and society. He is the author, co-author, or co-editor of eighteen books (including Negotiation Genius [with Deepak Malhotra], Bantam Books, September 2007) and over 200 research articles and chapters. He is a member of the editorial boards of the American Behavioral Scientist, Journal of Management and Governance, Mind and Society, Negotiations and Conflict Management Research, and The Journal of Behavioral Finance. Also, he is a member of the international advisory board of the Negotiation Journal.
From 2002-2008, Max was consistently named one of the top 40 authors, speakers, and teachers of management by Executive Excellence. He was 'Teacher of the Year' by the Executive Masters Program of the Kellogg School. In 2003, Max received the Everett Mendelsohn Excellence in Mentoring Award from Harvard University's Graduate School of Arts and Sciences. In 2006, Max received an honorary doctorate from the University of London (London Business School), the Kulp-Wright Book Award from the American Risk and Insurance Association for Predictable Surprises (with Michael Watkins), and the Life Achievement Award from the Aspen Institute's Business and Society Program. In 2008, Max was named as Ethisphere's 100 Most Influential in Business Ethics, was named one of Daily Kos' Heroes from the Bush Era for going public about how the Bush Administration corrupted the RICO Tobacco trial, received the International Institute of Conflict Prevention and Resolution (CPR) Outstanding Book Award, and received the Distinguished Educator Award from the Academy of Management. His former doctoral students have accepted positions at leading business schools throughout the United States, including the Kellogg School at Northwestern, the Fuqua School at Duke, the Johnson School at Cornell, Carnegie-Mellon University, Stanford University, the University of Chicago, Notre Dame, Columbia, and the Harvard Business School.
His professional activities include projects with Abbott, Aetna, Alcar, Alcoa, Allstate, Ameritech, Amgen, Apax Partners, Asian Development Bank, AstraZeneca, AT&T, Aventis, BASF, Bayer, Becton Dickenson, Biogen, Boston Scientific, BP, Bristol-Myers Squibb, Business Week, Celtic Insurance, Chevron, Chicago Tribune, City of Chicago, Deloitte and Touche, Dial, Ernst and Young, First Chicago, Gemini Consulting, General Motors, Harris Bank, Home Depot, Hyatt Hotels, IBM, John Hancock, Johnson & Johnson, Kohler, KPMG, Lucent, The May Company, McKinsey, Medtronics, Merrill Lynch, Monitor, Motorola, National Association of Broadcasters, Nordstjernen, Pfizer, PriceWaterhouseCoopers, R. P. Scherer, Sara Lee, Siemens, Sprint, Sulzermedica, Synergen, The Nature Conservancy, Unicredito, Union Bank of Switzerland, Wilson Sporting Goods, Xerox, Young Presidents Organization, World Bank and Zurich Insurance.
Max's consulting, teaching, and lecturing includes work in Argentina, Australia, Austria, Barbados, Belgium, Brazil, Canada, Chile, Costa Rica, Ecuador, France, India, Ireland, Israel, Italy, Malaysia, the Netherlands, Peru, the Philippines, Puerto Rico, Singapore, South Africa, South Korea, Sweden, Switzerland, Thailand, and the UK.
I have read lots of books about behavioral decision-making and behavioral finance. When I bought the book I initally expected it being similar like many other books covering this subject. But while I was reading I just could not stop, though I found many examples I knew already. But the style of Bazerman's writing attracted me (though English is not my mother language) so much, that I studied the book from the first to the last page. The examples of bounded rationality of many human decisions and its 'sub-optimal' if not sometimes costly results are very well explained. The solutions to improve the decision-making processes are presented very clearly at the end of each chapter.
For those who work in the area of behavioral decsion-making or behavioral finance the book is an excellent comprehension and an 'add-on' to the basics that are partially covered in other publications. For beginners the contents is easy to understand: The examples deal with important decision problems everyone of us is confronted with at least once in her/his lifetime. If people try to follow Bazerman's advices, they probably will not only imrpove reasoning, but might save some money at the next purchase of a new car or at other occasions. Most important for me was the description about the value of time.
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This book has the effect of sitting down to a heart to heart talk with an admired family friend who knows you well enough to appreciate your strengths, forgive your shortcomings and believe in your capacity to change.
After the first chapter, even an unregenerate spendthrift like me will be thinking about patterns we didn't recognize as obstacles, especially in the realm of money management. And that is the key, says Prof. Bazerman. The very idea of money mistakes may be daunting, but what this book does very clearly -- painlessly and with good humor -- is prescribe ways to prepare for, circumvent and correct them.
Every chapter takes examples with which it is easy to identify, from buying a car or a house to negotiating a new job, and explores alternative strategies to show how they actually do affect the outcome. And recapping key pointers at the end of each chapter reminds us (for instance) that not just cold cash but time is money, and a critical element we might not recognize in many of our decisions.
What I like best about Smart Money Decisions is it gets right down to business without condescending or pandering to late-blooming readers like me, who will really benefit by being honest with ourselves about what we need to do to change our fiscal ways. Read it and reap!
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It starts with interesting but simplistic common sense advice about buying houses and cars, then falls flat. The author never seems to be settled on whether he wants to help consumers or large companies. And much of the advice is weak.
In the fourth chapter, for instance, after making a hopelessly simplistic but somewhat credible case against buying title insurance when buying a house, he forgets to include the vital fact that the seller pays for title insurance in almost all cases. Later in the book he gets lost in his own story about budweiser without making any point at all.
Like so many books about finance, this book has two flaws. It does not have enough content to warrant a full book, even a skinny one like this. When it does start to wade into deeper water, one senses the heavy hand of an editorial assistant, too weak in the comprehension of numbers, trimming and constricting the story to the point that the reader can't find the significance of its message.
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