Meditations and Learnings

Meditations and Learnings

Investment Bias - The Psychology of Fanboys

Back in 1968, two researchers (Knox & Inkster) surveyed bettors at a horse race. All bettors either had already put down a $2.00 bet, or were about to put down a $2.00 bet. On a 7-point scale, both groups of bettors were asked to rate their confidence of their chosen horses’ chances of winning. The average estimate of those who hadn’t yet bet their money was 3.48. And the average estimate of those who already had bet? 4.81.