By Gibs, 3rd August 2018
Pizza! Most of us love it. Some love themselves a traditional Margherita, while others prefer a fully loaded Chicago deep-dish. So what does pizza have anything to do with the psychology of investing?
Irvin Levin, a Psychology professor, conducted an interesting experiment where participants had to either build their own pizza by adding toppings to an empty pizza base, or remove toppings from a fully-loaded one. The experiment wanted to find out which action, either adding or subtracting, would result in a fuller and more expensive pizza. Wanna warrant a guess?
The results were largely consistent across participants from different countries, and it was the subtracting method that resulted in a much more expensive pizza with more toppings. This could be due to the participants being less willing to lose than to gain. This is an example
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