I am having a bit of FOMO at the moment, but it isn't over getting in on the latest crypto bandwagon, it is over a house. My wife and I went back to the scene of the potential crime today, armed with a couple knowledgeable friends and my father-in-law as second opinions. I really like the place, but I am trying not to let my hopes get away from me as I know that the chance of getting a successful bid in at our price point is slim - but not impossible.
When my wife and I were discussing our opening offer, she chose a nice round number and one that is low-balling them, but considering the work that needs to be performed, not impossible if they are in a rush to get out. However, I suggest upping the offer a little bit so that it is off the round number. 
Then you get something like this where the round number has sells put on it and then other sellers will try to front run to get bought up just under the whole number. I have missed many buys and sells from setting them to close to whole units for as you can see, the 6,500 at 2100 sats won't sell until the 60,000 at 2098 sats goes through. And then some others are trying to sell before they have to face the wall above. Not sure if that is a good example, but you get the idea.
When it comes to buying things, we also tend to favor the "just under" amount, and shy away from the click over to the next unit. This is why there are so many things that are on sale at $1.99 instead of an even 2 dollars. As even though there is only a 0.5% difference, the head sees the first number change from a 1 to a 2 and suddenly it looks a great deal more expensive, or a bargain at $1.99, even though it might not be worth anything near that.
I often see unit bias appear in corporate project planning, where at the start of an undertaking with very limited information, a time frame is given, one month, six months, 1 year and so on. These times are chosen arbitrarily without any kind of knowledge or much foresight and they become the end goal or milestones to adhere to, that make projects early or late without ever considering the reality of the situation. In general, a project takes the time it takes and under perfect information and actions, it is very unlikely to fall on an unit of 6 months or 1 year.
Of course, it is easier for us to mentally handle round numbers, which is why we lean toward them so heavily. 11% of 100 is easier to calculate and visualize than 11% of 106. While there are obviously variations between individuals, we aren't overly suited to doing mental arithmetic and once compounded interest rates and annuities start to come into play, we lose track very fast, which is why so many people fall into loans that they can't afford.
There are so many cognitive biases that surround numbers that those who design the system can set traps all over the place, including the general sense that we will be in a better position next month - the credit card trap. Most people who use credit cards think it is a one off and that next month they will pay it back, without factoring that they had to use it this month already, so next month they will have to have their normal costs, plus pay the additional back. Many slip up and then slowly fall more and more in to debt. The debt cycle.
And then there is FOMO.
Not only are there the debt traps to contend with, our own desires to have our wants fulfilled will push us into a kind of intoxicated state where we do not think clearly and are more open to jumping in, even if the deal is not as sweet. What we are pretty confident on is that the renovations that we would do would increase the value enough that we would have put significant sweat equity into the place if we did have to sell in the future. Is this just FOMO talking and I am overestimating my own ability to work?
Maybe.
But at least thinking out loud lets me reflect on my thoughts and perhaps discover if I am biased by the fear of missing out or, biased by the fear of change. This would be a change for my family and is a big commitment in time, money and effort - but I think that the potential and eventual result will be worth it and after seeing the place again, my wife is much more keen than she was earlier to take the risk.
As I have said before, I have a pretty good imagination for seeing what could become of what might look like junk and the same process takes a bit longer for my wife to visualize. Once it had stewed for the week and on the second showing, she saw things from a different perspective. She is in the throws of FOMO too now it seems and I guess we will put in an offer :)
I am pretty excited
...Damn FOMO...
Taraz
[ a Steem original ]
