George Bailey Effect


DEFINITION of 'George Bailey Effect'

A feeling of increased gratefulness for what one has upon considering how much worse off one might be if a critical event or events had not occurred. The George Bailey Effect is a reference to the experience of protagonist, George Bailey, in the movie "A Wonderful Life." In the movie, Bailey considers suicide before a supernatural experience shows him that his community would be much worse off if he had not lived.

BREAKING DOWN 'George Bailey Effect'

In economics, Daniel Kahneman has observed that there is an "aspiration treadmill" in that people who achieve increased wealth do not report increased happiness versus those who have less. This is apparently because humans adjust their expectations upward at each level of wealth or success. By imagining an alternate scenario and practicing gratitude, however, some psychologists theorize that it may be possible to maintain a high level of satisfaction and partially avoid the treadmill of increasing expectations.

  1. Anti-Fragility

    A postulated antithesis to fragility where high-impact events ...
  2. Daniel Kahneman

    A professor emeritus of psychology and public affairs at Princeton ...
  3. Rational Behavior

    A decision-making process that is based on making choices that ...
  4. Behavioral Finance

    A field of finance that proposes psychology-based theories to ...
  5. Market Psychology

    The overall sentiment or feeling that the market is experiencing ...
  6. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s ...
Related Articles
  1. Active Trading Fundamentals

    Why Rational Ignorance About Your Investments Might Really Be OK

    It's impossible to know everything about the markets. Find out how ignorance affects your investments.
  2. Retirement

    This Is Your Brain On Stocks

    Find out how the human mind can hurt investors' portfolios.
  3. Active Trading Fundamentals

    An Introduction To Behavioral Finance

    Curious about how emotions and biases affect the market? Find some useful insight here.
  4. Trading Strategies

    How To Avoid Emotional Investing

    Most investors buy high and sell low, but you can avoid this trap by using some simple strategies.
  5. Options & Futures

    Market Problems? Blame Investors

    Investors are only human, and their irrational behavior can often move the market.
  6. Economics

    The Difference Between Finance And Economics

    Finance and economics are often taught as separate subjects, but they are interrelated disciplines that influence one another in many ways.
  7. Economics

    Understanding Tragedy of the Commons

    The tragedy of the commons describes an economic problem in which individuals try to reap the greatest benefits from a given resource.
  8. Markets

    Can Deflation Be Good?

    General economic theory consensus rules that deflation is bad for the economy. But the Swiss economy, which is growing despite a drop in prices for the last four years, is proving otherwise. ...
  9. Options & Futures

    Terrorism's Effects on Wall Street

    Terrorist activity tends to have a negative impact on the markets, but just how much? Find out how to take cover.
  10. Savings

    3 Steps for Retirement Saving and Investing Habits

    We take a look at the choices we make today that our future selves would prefer not to be making, often faced by investors when saving for the future.
  1. Is Nigeria a developed country?

    Nigeria is not a developed country by any reasonable standard. The country's per capita gross domestic product (GDP) is much ... Read Full Answer >>
  2. How do mutual funds split?

    Mutual funds split in the same way that individual stocks split, but less often. Like a stock split, mutual fund splits do ... Read Full Answer >>
  3. Is Colombia an emerging market economy?

    Colombia meets the criteria of an emerging market economy. The South American country has a much lower gross domestic product, ... Read Full Answer >>
  4. Is Mexico an emerging market economy?

    Mexico meets all the criteria of an emerging market economy. The country's gross domestic product, or GDP, per capita beats ... Read Full Answer >>
  5. Is Argentina a developed country?

    Argentina is not a developed country. It has one of the strongest economies in South America or Central America and ranks ... Read Full Answer >>
  6. Is Brazil a developed country?

    Brazil is not a developed country. Though it has the largest economy in South America or Central America, Brazil is still ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  2. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  3. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  4. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  5. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  6. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
Trading Center