THe house money effect The theory of investors in taking higher risks with profit from a good investment has become norm in the new trading world.This has resulted in the trade getting a name the house market effect.House money effect is a robust phenomenon but few scholars explain the mechanism of it well. So is it really a real syndrome or its a myth.
The behavioural pattern of a pattern is mainly described by the way they want to limit the loss effect either literally or a s mental effect on humans. Most decision making processes are made with the loss effect in mind, People do not like to lose money so they take less risks with their money.
The underlying effect of the house money effect is underlined by how much an organisation can invest with capital they have obtained from the directors rather than the profit recognised received from successful investment project.
Most economic investment risks are taken with assessment of the forecast of organisation principalities so that’s taking the risks and we see the element of wanting to risk more on investments returns thereby the effect of the house money effect.