PsyBlog published a nice article about the psychology of money.

Obviously money is a great way to trade stuff and services. Imagine how difficult it’ll get if you’re trying to trade food by offering your experiences as a web designer or politician. But there’s more going on with money than just its practical use and the article lists some interesting psychological effects.

Children, for example, actually perceive money to be physically larger than other objects that are actually the same size.

Hop over to read the rest.

WIRED features an interesting interview with psychologist Philip Zimbardo who conducted the famous Stanford Prison Experiment. He links his research to actual events like Abu Ghraib or jewish wardens in nazi concentration camps.

Read "How Good People Turn Evil, From Stanford to Abu Ghraib" over at WIRED.

The Stanford prison experiment was a psychological study of human responses to captivity and its behavioral effects on both authorities and inmates in prison. [...]
Undergraduate volunteers played the roles of both guards and prisoners living in a mock prison in the basement of the Stanford psychology building.

Prisoners and guards rapidly adapted to their roles, stepping beyond the boundaries of what had been predicted and leading to dangerous and psychologically damaging situations. One-third of the guards were judged to have exhibited "genuine" sadistic tendencies, while many prisoners were emotionally traumatized and two had to be removed from the experiment early.

Finally, Zimbardo, alarmed at the increasingly abusive anti-social behavior from his subjects, terminated the entire experiment early. from wikipedia

I once attended a course "Funktionsstörungen/Dysfunctions" at Aachen University, that dealt with disorders of several functions of the brain and insights that can be concluded therefrom. A recent TED talk by Vilayanur Ramachandran picked-up that topic and is definitely worth watching.

In the first lesson of the course I was afraid that it's just about memorizing a bunch of diseases and its indications. It was, however, an illuminating course about how different brain areas and their function can be identified by looking at very rare neurological diseases. Contrary to most empirical sciences – where an offbeat data item is usually treated as an "error" – these individual cases are of great value in understanding how our brain works.

An interesting example is prosopagnosia. People suffering from prosopagnosia cannot identify people by their faces, despite having normal vision and being capable of identifying objects other than faces. As they can also recognize people via different modalities (e.g. via voice), this leads to the conclusion that there is a separate brain area for identifying faces visually.

Mr. Ramachandran talks about the Capgras delusion, witch is somewhat similar to prosopagnosia, synesthesia (when people hear color or smell sounds), and a possible cure to phantom limb pain.

Watch his talk.

He uses statistics as a drunken man uses lampposts — for support rather than illumination. Andrew Lang

Peter Norvig wrote an excellent article on how to conduct empirical studies and how to interpret the resulting data.

He starts with common mistakes like a lacking or wrong control group, too few subjects for your experiment, or the lack of a theory. He continues with common mistakes in data interpretation. Mixing up conditional probabilities P(A|B) with P(B|A), or confusing causality with correlation.

Norvig is well known to almost every computer scientist as he published the leading book "A Modern Approach To Artificial Intelligence".

If you're too lazy to read Novigs article or found interest in this topic, you may also like to watch Peter Donnelly's talk at TED 2005. He talks about common misconceptions in statistics and presents many comprehensible examples.

When you have to deal with cognitive psychology it is absolutely necessary to know how our brain works and which different brain areas interact with each other. Luckily I've recently found a nice tutorial video on youtube about this.

Have fun.