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Hello and welcome to more or less on the BBC World Service.

I'm Tim Harford and we're your weekly guide to the numbers all around us and this week the numbers

all around the psychology of money.

We'll talk to a guest whose work we followed and enjoyed for many years.

My name is Dan O'Reilly, I'm the James B. Duke, professor of psychology

and behavioral economics. I wrote a few books. Most of them I like. The most recent one is called

Small Change. And it's a book that is trying to help us understand how we

miss think about money and money is kind of amazing because we use money a lot

and because we use it a lot we think we're experts it, but when you take a step back and you think,

do we actually make the right decisions, you realize that there are many cases where we don't make the right decisions,

and recognizing it is the first step in trying to figure out what to do better.

As part of the book, Dan talks about how we decide what to buy.

What crucial idea here is opportunity cost.

If you spend $10 on a book, that's $10 you can't spend on a CD or a pizza.

When you spend money, time, or attention, you should be mindful of what you're not doing as a result. But as Dan Arielli says, we don't always find it easy to think that way.

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