The Little Book of Behavioral Investing: How not to be your own worst enemy

Conclusion

The Road to Hell Is Paved with Good Intentions

Why Promising to Be Good Just Isn’t Enough

 

 

 

 

 

 

IT IS CONFESSION TIME. As anyone who knows me can attest, I am overweight (although I prefer to think of myself as simply too short for my weight). In fact, according to the body mass index which compares height to weight (designed by size fascists, I’m sure) I am on the borderline between overweight and obese.

I know how to correct this problem. I should simply eat less. However, I find this incredibly hard to actually do. So despite that fact I know how to change, I don ’t change, so my knowledge doesn’t translate into better behavior. Rather I file the information in the category of “things I know and choose to ignore.”

Brian Wansink has written a brilliant book about the psychology of food entitled Mindless Eating. He and his fellow researchers have found that many of the same biases I have discussed in previous chapters show up in our eating and shopping habits (evidence for the universal nature of these biases). For instance, the ease of availability influences how much we eat. When chocolates are visible and convenient, people will eat nearly three times more than when they have to walk two meters to collect one! Think about this in terms of information and the problems with information overload that we discussed in Chapter 7.

Similarly, Wansink has found evidence of anchoring effects when it comes to shopping. He presented consumers with a limit in terms of the quantity ...