The House Money Effect


 The house money effect is a cognitive bias where investors take higher risks on reinvested capital than they would on an initial investment.

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What Is The House Money Effect fourweekmba.com


I can see varied corollaries of this concept. 

Someone gave me a fancy store gift card, so I am going on a shopping spree and buying stuff that is obviously overpriced that I wouldn't have purchased with my own money. 

I returned that unnecessary purchase, and now I am going to use the refund credit for an equally useless product. 

Work pays for a society membership, and I will keep renewing annually even though I have no use for it. 

I am knowingly overpaying with travel miles in my account for the same ticket as I would have paid with cash.