Wealth and money are curious things. It can come in droves and disappear just as quickly. Cash can grow itself into a fortune over the years, or become one overnight. Maybe that’s why most people don’t pretend to understand everything about it.

However, scientists (not just economists) are hot on the trail to define why humans believe such weird things about money. It turns out our irrational behavior towards cash comes from a genetic disposition. Consider this scenario:

You’re going to a movie and as you approach the counter, your position in line wins you $100. Not bad right? But what if the guy in front of you won $1,000 and you pocketed $150. This may sound like some random ticket office lottery, but which of those two situations would you rather be in?

Strangely enough, most people would choose to be the first person: take $100 as the sole winner and leave $50 on the table. Why? Well it has to do with behavioral economics. Basically, some people would rather give up 50 bucks to not feel like a loser. Even though they left with more money than when they came, folks don’t like to feel regret for not winning the bigger prize of $1,000.

This is called loss aversion, and we all do it. The original article describes the trait like this: Humans need to feel like “the potential gain is twice what the possible loss might be because a loss feels twice as bad as a gain feels good.”

It’s a fascinating science. So what would you choose?

[Image: Newsweek]

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