It would be easy to end this ramble through the slightly dodgy outer limits of our inner lives with a summary of the main ideas and research, but I'd like to do something a little more ambitious. I want to try to identify some of the outcomes of the research, rather than just replaying it. For instance, do you know why you invest? If you think it's solely to make more money you're probably wrong.
In fact, the findings of behavioral psychology can illuminate all sorts of interesting areas of our psyches, and can help us dispel a whole range of silly myths that actually get in the way of us becoming better investors. For instance, here's an extraordinary finding. If you want a favorable decision from a judge do everything you can to get a hearing early in the day or straight after lunch.
As it turns out, justice may be blind but she also gets hungry. Researchers Shai Danziger, Jonathan Levav, and Liora Avnaim-Pesso showed that the percentage of favorable hearings in a parole session drops from 65 percent to nearly zero as the morning unfolds, but jumps back to 65 percent straight after lunch.1 The issue is known as ego depletion, but it really comes down to the fact that there's a cost to self-control in terms of our internal resources.
The psychologists have named this issue resource depletion and Anastasiya Pocheptsova, On Amir, Ravi Dhar, and Roy F. Baumeister's research suggests that it increases our tendency to use anchors and triggers our loss aversion ...