By Justin May, Portfolio Manager

I entered college as an economics major, expecting to draw graphs and do calculus. On my first day, I was instead handed the book “Mindless Eating: Why We Eat More Than We Think”, a pop-science dieting book about our unconscious eating habits, written by a Cornell marketing professor¹. Oprah claims on the cover that this book might change my life. At the time it felt like an odd choice for an incoming economics student, but in hindsight it makes sense. Our innate behaviors under conditions of scarcity are on display clearly at the dinner table. And economics is, after all, the study of human behavior under conditions of scarcity. Here are a couple of examples from the book that have stuck with me through the years. They are relevant to your finances.

Bottomless Soup Bowls

Participants in this study were seated in front of bowls of soup for lunch. Some of the diners received regular bowls of soup, while others received soup bowls connected to hoses ensuring the bowls never emptied. Those who ate from never-emptying bowls consumed almost double the soup compared to those who received regular bowls. When asked to estimate how much they ate and describe how full they felt afterwards, both groups responded identically.

The lesson for dieters

When the “stop signal” of the soup bowl emptying is removed, people tend to eat much more than they otherwise would. Though scientifically we should focus on calories, we’re hardwired to rely on our eyes to tell us when to stop feeling hungry. Changing the size and shape of your dishes at home may help you eat less, as will adding high-volume, low-calorie items to your diet.

The economics lesson

In both spending and investing, the absence of a clear “stop signal” can mask consequences until it’s too late. Credit cards and automated payments remove the natural cue of seeing money leave your account, making it easy to spend more than intended.

Whether it’s one segment of their portfolio like the current S&P 500, or a single booming stock like NVIDIA, investors tend to ignore their risk profile and hold onto winners longer than they should. A lucky series of draws often leaves investors questioning why they own anything else than what’s booming, ignoring the potential for loss. It’s easy for investments to become little more than numbers on a page when markets are favorable, but in a crash the loss suddenly becomes tangible.

North Dakota Wine

Participants in this study were offered a free glass of wine with their dinner at a restaurant. The wine was actually “Two Buck Chuck”, but it was presented to half of the participants as wine from a new California winery, and to the other half as wine from a new North Dakota winery. Those presented with “North Dakota” wine rated both the wine and meal much lower. The diners presented with “California” wine ate significantly more than those who received “North Dakota” wine, though both groups were served the exact same meal.

The lesson for dieters

Perception and environment are important. When we anticipate something being higher quality or more enjoyable, we tend to consume more without realizing it.

The economics lesson

This is an example of “anchoring”, where we tend to fixate on one reference point and let it shape our decisions. Think about retail pricing: whether you like it or not, you’re much more likely to buy a $50 item if it’s “50% off of $100” than at the full $50 price.

Investors face the same bias. For instance, an investor might anchor to the peak value of their portfolio and view any drop as unacceptable, even if their allocation is still aligned with long-term goals. This can lead to unnecessary behavior, either by buying high-risk assets to “get back to even”, or overly conservative behavior, such as halting withdrawals because the portfolio hasn’t returned to its previous high. By fixating on a single number, investors ignore the portfolio’s design and purpose. A well-designed financial plan expects market crashes; a well-designed portfolio means that even during a crash it’s business as usual for the investor.

The experiments above show just how powerful unconscious cues can be—not only at the dinner table, but in how we handle money and investing. The takeaway for your finances is simple: structure your environment and your decisions to account for these biases. Set clear rules for spending, saving, and investing, so you’re not relying on intuition alone. Stick to the plan, and don’t anchor to past highs or arbitrary reference points when making decisions. By creating disciplined habits and a framework for your financial choices, you can avoid the subtle traps that lead to overconsumption, overconfidence, or unnecessary risk.

1. Former Cornell marketing professor Brian Wansink. In 2018 (after I graduated), Cornell determined that Wansink repeatedly committed scientific misconduct and many of his papers were redacted. The famous “soup bowl” study has been replicated successfully, though data in the paper was found to be misleading. All the studies I’ve mentioned above remain valid, I believe.