Why students buy food they will never eat

A behavioural science professor from Warwick Business School (WBS), has revealed that there is a scientific reason behind our excessive food purchases.

Professor Daniel Read featured on The Human Zoo on BBC Radio 4 to talk about ‘diversification bias’, an effect that causes us to buy things that we are not likely to consume.

He explained the diversification bias by saying: “We believe that variety is a pretty good thing. But the reality is that when we are actually consuming things, we tend to like less variety than we think or imagine that we will like.”

The diversification bias could be one reason that we waste so much food. Warwickshire residents threw away over £26 million worth of food products last year alone, and students are no exception to this trend.

Second-year French and German student Andrew Stephenson told the Boar: “I do have a bit of a routine when it comes to food, and when I buy new things, I tend to freeze them.

“But when I make something from scratch, sometimes ingredients are left over in the cupboard and they have to get thrown out.”

Pr Read explained that the same principle applies in other areas of life, such as when we shop for books.

This type of decision-making also has an economic impact, as investors will often spread their investments over a wide range of options, sometimes making unwise decisions.

Pr Read said: “If private investors have a number of investment possibilities they tend to spread their investments but not in the way a finance professor would say you should do.

“Quite often it is simply that they want to have a different number of things in their portfolio,” he added.

The show also looked at an effect known as the ‘winner’s curse’, which Professor Nick Chater of WBS demonstrated by getting students to bid on a jar of money.

He stated: “If I get lots of people to estimate something they will have a wide range of bids, they will spread either side of the truth, some people estimate too low and some people too large.

“That means that the true value will be less than the highest bid, so the winner is almost certain to pay too much.”

Although the jar contained just £6.13, the winner ended up paying £9 for it. Pr Chater explained that the winner’s curse is a real danger for businesses who may end up buying something for more than it is worth.

Second-year WBS student Daniel Barnett said: “The winners curse was demonstrated with the Facebook Initial Public Offering, as investors wanted to own shares in Facebook at any price.

“The problem was that lots of people overstated its value and so shares plummeted in a matter of days.

“The experiment by the professors of WBS replicates this and is therefore a warning to everyone about the dangers of the winners curse.”

Students can get involved with The Human Zoo by taking part in their weekly experiments [here](http://www.weblab.wbs.ac.uk/experiment/3). The show is aired every Tuesday at 3pm on BBC Radio 4.