RHETORIC: Ancient Art of Discourse

Posted on March 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Wikipedia suggests that Rhetoric is the art of persuasion . It is one of the three ancient arts of discourse (trivium) along with grammar and logic/dialectic.

As an academic discipline within the humanities, rhetoric aims to study the techniques that speakers or writers use to inform, persuade, and motivate their audiences.

And, according to Professor Mackenzie Hope Marcinko PhD, rhetoric also provides heuristics for understanding, discovering, and developing arguments for particular situations.

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PROSPECT THEORY: Physician-Client Empowerment for Financial Decision Making

Posted on March 13, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

BEHAVIORAL ECONOMICS

By Staff Reporters

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Prospect theory is a psychological and behavioral economics theory developed by Daniel Kahneman and Amos Tversky in 1979. It explains how people make decisions when faced with alternatives involving risk, probability, and uncertainty. According to this theory, decisions are influenced by perceived losses or gains.

Example:

Amanda, a DO client, was just informed by her financial advisor that she needed to re-launch her 403-b retirement plan. Since she was leery about investing, she quietly wondered why she couldn’t DIY. Little does her FA know that she doesn’t intend to follow his advice, anyway! So, what went wrong?

The answer may be that her advisor didn’t deploy a behavioral economics framework to support her decision-making. One such framework is the “prospect theory” model that boils client decision-making into a “three step heuristic.”
 
Prospect theory makes the unspoken biases that we all have more explicit. By identifying all the background assumptions and preferences that clients [patients] bring to the office, decision-making can be crafted so that everyone [family, doctor and patient] or [FA, client and spouse] is on the same page. Briefly, the three steps are:

1. Simplify choices by focusing on the key differences between investment [treatment] options such as stock, bonds, cash, and index funds. 

2. Understanding that clients [patients] prefer greater certainty when it comes to pursuing financial [health] gains and are willing to accept uncertainty when trying to avoid a loss [illness].

3. Cognitive processes lead clients and patients to overestimate the value of their choices thanks to survivor bias, cognitive dissonance, appeals to authority and hindsight biases.

Assessment

Much like healthcare today, the current mass-customized approaches to the financial services industry falls short of recognizing more personalized advisory approaches like prospect theory and assisted client-centered investment decision-making.

 Jaan E. Sidorov MD [Harrisburg, PA]   

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“FREE STUFF”: Powerfully Irrational

Posted on December 2, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

BEWARE THE PSYCHOLOGY OF HOLIDAY SHOPPING!

[Online -OR- Onground]

By Staff Reporters

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Power of Free

Who doesn’t love free stuff? The word “free” is like a magic spell that makes our rational minds go on vacation.

According to colleague Dan Ariely PhD, the power of free compels us to grab things we don’t need and make questionable choices. Why buy one and get one free when you can get two for the price of one? It’s the same deal, but free feels better.

IOW: Like other heuristics, the Power of Free is a mental shortcut that allows us to bypass rational thought and save effort to make quick decisions. Studies of the Power of Free have shown it to be closely linked to the Affect Heuristic. Specifically, it is linked to emotional and social thinking rather than transactional thinking. People become influenced by emotion and obligated to socially acceptable behaviors.

CITE: https://www.r2library.com/Resource/Title/0826102549

For example, say, a yoga studio charges extra to use their mats. This leads more people to pay the fee and use their mats for convenience. Then, say, the same yoga studio removed the extra fee more people would bring their mats from home instead of feeling guilty about borrowing one for class.

Removing a dollar value increases its inherent value and makes it more desirable. The type of product matters too. People are more likely to opt for a free product that is fun rather than functional. This is because emotion is more powerful than rational thinking under the influence of the Power of Free.

In another example, people are more likely to say “yes” to a free piece of cake or sample size of perfume than furniture polish or a bag of white flour.

So, next time you find yourself going to a free financial planning or retirement seminar with free dinner, or a free medical screening test, or free stock market portfolio review, just blame it on the irresistible and irrational power of free.

SPONSOR [not free]: http://www.MarcinkoAssociates.com

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