GameStop bull Keith Gill – better known as Roaring Kitty on YouTube – lost more than $13 million (€10.7 million) last Tuesday. His consolation, said Bloomberg's Joe Wiesenthal, was that he had already taken over $13 million off the table so he was "playing with house money".

A similar comment was passed by Jordan Belfort, the Wolf of Wall Street, who said anyone who has profited should pull their original GameStop investment out "and play with the house's money".

Really? Nobel economist Richard Thaler calls this the house money effect. Just as gamblers are more willing to take risks on unexpected winnings, Thaler found investors are more willing to take risks when they're reinvesting profits. It's a natural human tendency, but a dangerous one.

Inheritance

This kind of mental accounting explains why people can be conservative in their regular spending yet throw away birthday money, or gambling winnings, or an inheritance. Similarly, it explains why people will travel to save €5 on a €15 purchase, but not for a €125 purchase.

Money is money: €5 is €5, $13 million is $13 million. It’s not house money – it’s your money, or it was.