Animal Foraging and Investors’ Portfolios: Why the Decision Similarity?

Abstract

This article identifies striking similarities between animal foraging and investment behaviors of educated investors. For example, animals and investors are loss averse, have poorly diversified food or investment portfolios, and imitate the selection behavior of others. Building upon well developed research indicating that humans use a dual decision process, the argument is made that the parallel between these behaviors arises because of the similar complexity of the decision types and an evolutionary inclination in such circumstances to rely on intuitive, affective, and imitative choice procedures.